Target in the US is, as in Australia and New Zealand, a mass merchant, or discount department store by description. Personally, I believe that Lorna Inman’s Target in Oz is now a more focussed, innovative and tightly run “value” department store than its very successful US equivalent, which is saying a lot.
Kroger on the other hand is a major US grocery chain, similar to Coles, Woolworths and New World in Australia and New Zealand. Kroger is famous for its in-store theatre in the fresh section, where the lights dim, strobe lights flash, water sprinklers rain onto the fresh produce, as a thunderclap is heard through the PA system.
Apparently it recreates the conditions that fresh produce experience during a storm and that keeps the produce fresher. I am not sure if it does, but I have to say the first time you experience it you know that you want to come back to the store again just for the show.
In recent weeks both Target and Kroger have begun testing new concept stores with broader ranges of items to offer their shoppers, each moving its range of categories offered closer to the other.
Target has opened a new store and introduced fresh meat, fresh produce, baked goods and dairy to augment its traditional health and beauty, clothing, hard goods, home entertainment and electrical appliances categories.
At Kroger, a new format “marketplace” has added furniture, jewellery and home accessories to its traditional grocery offering of dry and fresh produce and health and beauty. The new store has also added home and kitchen accessories. Oh, and to add to the category creep into Target’s area, it has a “Little Clinic” in-store staffed by nurses to treat common illnesses, minor injuries and dispense advice on better living – thus taking it into drug store giant Walgreen’s space.
So what’s behind these initiatives? Well, let’s recap on why this category creep, a process accelerated by the GFC, (which by the way is still very real outside of our very blessed antipodean paradise!) has come about.
We as shoppers are very loyal and habitual creatures. We forgive high prices and out-of-stocks in stores, so long as the service is okay, the store staff are polite and importantly, the shopping experience is convenient. It doesn’t take up too much of one of only three finite resources in our lives – time. The other two finite resources are family and money… not always in that order.
So long as our basic shopper needs are looked after we tend not to vary our journey and we tend not to stop shopping at these stores. However, we don’t spend as long as we could or as much as we would if these stores gave us, to quote Paco Underhill, “good aisle” – a great shopper experience. When we have a great shopper experience we stay longer and spend more in these stores.
So before and during the GFC, shopper behaviour changed and we as shoppers asked our favourite stores to help us drive less, which meant spend less time in our car and, as pleasant consequence, less money on fuel. The retailers heard us and delivered both these savings by allowing us to buy more items during our single trip to their store.
In pharmacies the offering expanded into food, beer and wine. In groceries we saw more hardware goods, and in hardware we saw confectionery and snacking items introduced to tempt the time poor and hungry.
Now we have seen two strong retail brands, both with a strong and loyal shopper base, offer their shoppers even more. The move by Target and Krogers will lead to higher sales per store and increased basket size. As shoppers we won’t even consciously notice this shift in range, we’ll just buy the item in this store and save on the journey to the next.
As a shopper it’s great news, because its saves us time and money. As a supplier it opens up new opportunities to widen the number of places to offer products to shoppers, “Blue Ocean” in business parlance. And for retailers it allows their shoppers to be better looked after with a more convenient shopping experience.
And finally it helps our environment too. Why? Well, just think how many car journeys would be saved if each of us just lowered our number of visits to stores by one visit per week. Sobering thought isn’t it?
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In his role as CEO of CROSSMARK, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this insightful blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia, NZ, the US and Europe. His international career in sales and marketing has seen him responsible for business in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands. CROSSMARK Asia Pacific is Australasia’s largest provider of retail marketing services, consulting to and servicing some of Australasia’s biggest retailers and manufacturers.
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