RANCHO MIRAGE, Calif. -- To survive and thrive, independent operators need to differentiate themselves by finding a niche and targeting specific customer segments, two food marketing professors from St. Joseph's University, Philadelphia, told IGA's Global Summit here last week.
"You can beat Wal-Mart," Richard J. George said, "but not if you try to go up against their strength, which is price."
"You don't want to compete on terms on which your competitor is stronger," John L. Stanton added. "Target marketing is about figuring out who your customer is and how to compete most effectively by making your store perfect for that customer.
"It's a matter of thinking about customers, not products. You don't make money on Coca-Cola or Ralston Purina -- you make money from the customer who comes in to buy those products."
There are a variety of niches a retailer can focus on, Stanton said, including health- or weight-conscious customers, ethnic groups, older Americans, teenagers, college students, upscale or inner-city shoppers, singles or families with children.
"You've got to stand for something," he noted. "The most difficult task may be admitting to yourself that you can't be perfect for everyone. But being perfect for one group doesn't mean you exclude others -- it just means you focus differently.
"The assortment of products may be no more than 10% different between a targeted store and stores geared to appeal to everyone," he added.
Stanton suggested retailers appoint a target market manager. "Don't leave the development of these programs to amateurs or to store managers who are overworked already," he said.
With Albertsons testing a program where one manager will oversee two stores, "you have the opportunity to really drill down and find ways to delight people," Stanton said.
The professors offered several suggestions for making stores perfect for particular niches:
- For singles, focus on stocking bulk items and smaller, more convenient sizes while maintaining merchandise variety, "but look for higher margins on the smaller sizes," George said; offer preparation tips "and let your store be their sous chef," Stanton said; create a night for in-store dinners; expand the gift and floral sections, "since singles give more gifts," Stanton said.
- For college students, "who are price-conscious and whose lives run on a different clock," George said, extend your hours during final exams and offer coffee, salads, doughnuts and pizzas to pick up business that otherwise might go to a Domino's; place coupons in college welcome kits or newspapers; offer specials for tailgating or other college events; sponsor contests for fraternities and sororities.
"Going after college students can be a real opportunity for independents," Stanton said, recalling a visit to a Publix Super Markets store near the University of Florida, Gainesville, "whose manager said the company wouldn't allow it to promote to the college crowd because it didn't have enough stores near other campuses to promote that way."
- For families with small children, "make it easy for mothers by offering play centers for kids, with monitors all over the store so they can see their kids while they're shopping," Stanton said; let parents pre-order bulky baby care items like diapers and distribute them at the checkstand so they have room in their shopping carts for other merchandise; provide manufacturer samples for kids "to make shopping an event," George said; offer private-label products in the rest rooms for customers to try; set aside special areas in the parking lot near the entrance for mothers with kids, "and even if there are not enough spaces available, everyone will know you care about them," Stanton said.
- For older people, make parking spaces wider to make it easier to get in and out, or offer places to sit down and have coffee to make shopping a social occasion.
- For teenagers, offer your parking lot to a high school marching band to bring people to the store.