The biggest threat to supermarkets today is not wholesale clubs, category killers or factory outlets. It's video dial tone. Retailers should quake at the idea that armchair shoppers could order anything from arugula to zirconia by pushing a few buttons on a TV remote control. Once interactive technologies turn the average American family room into a couch-based shopping mall, American Express might as well change its slogan to "Don't Stay Home Without It."
If grocery retailers are to compete with television for shoppers, they need to learn a thing or two about show business. It is curious, then, that the most celebrated trends in food retailing today are everyday low pricing and Efficient Consumer Response, which have all the entertainment value of the Weather Channel.
Only a few grocery retailers are pointed in the right direction. Among the most famous are the wildly successful (though now tarnished) Stew Leonard's supermarkets in Connecticut, where grocery shopping is like a trip to the farm. Now in business for more than 20 years, the most amazing thing about Stew Leonard's is that no one has copied the concept in a big way. Stew Leonard's itself runs just two stores.
Supermarket retailers might also study FAO Schwarz, the toy chain, which has always done a magnificent job creating a vibrant shopping experience. Of course, not much imagination is required to make shopping for toys a magical journey. The toy retailer has Curious George, the storybook monkey, greeting customers at the door. A food retailer might have the Pillsbury Doughboy. FAO may not be peaking in profitability at the moment, but that is for reasons other than its entertainment-based merchandising. The line out the retailer's door speaks for itself.
Meanwhile, Russell's Shoe Carnival, a 39-store Indiana-based chain, sends in carnival barkers, balloons and 1950s rock 'n' roll to make shoe shopping something more than pedestrian. Shoppers with the longest toes win cash prizes in "Big Toe" contests. Purchases are free if the checkout clerk isn't smiling. The chain's owner, David Russell, has been known to pass out dollar bills to shoppers waiting in long lines. Most shoppers probably would prefer shorter lines. But sales per square foot at Russell's top $270, about 64% more than the U.S. shoe store average. If a shoe store can be made exciting (not to mention profitable), so can a supermarket.
Supermarkets, so far, are a medium without a message.
A message can be determined with a thorough analysis of prevailing lifestyle trends in the supermarket's trading area. A strategy is best developed with the assistance of brand marketers, who can do for the supermarket what they did as TV sponsors all those years ago. Packaged goods companies essentially could "program" supermarkets to match the demographics, psychographics and purchasing patterns of local shoppers. A 1960s theme for baby boomers, for example. Elements of situation comedies, game shows, soap operas, cop shows and murder mysteries might be adapted to in-store entertainment.
Such entertainment-based merchandising can readily be executed as concept shops, or "stores within a store." Self-contained merchandising environments have been used with great success in department stores. Why not in supermarkets? Even general displays, or an abundance of free samples, can add excitement and give consumers something to do other than race each other to the checkout lines.
In-store shopping is inherently more fun than pressing buttons on a remote control back home. Once retailers and marketers recognize how much fun and excitement is generated when stores are developed creatively as communications media, they can reconnect with consumers and re-engage the business of building stores -- and brands.
Douglas Leeds is president of Thomson-Leeds Co., a New York-based point-of-purchase advertising agency.
