June 28, 2007
Convenience isn't just an event for consumers, it's a state of mind.
Analysis of:
Big Boxes Aim to Speed Up Shopping | online.wsj.com
This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Implications: Retailers talk about convenience, but many of their plans work to do just the opposite. For instance:
Analysis: Unfortunately, many of the elements that lead to a convenient shopping experience are the very things that are sacrificed when discounters focus on low price. For instance, adequate staffing and reasonable training could help Wal-Mart simplify the customer's shopping experience. However, Wal-Mart's coverage has deteriorated over the last 5 years as has the level of associate training.
Consistent adjacencies both in terms of product placement with in departments, as well as, improved lateral adjacencies for complimentary products would also simplify shopping. But Wal-Mart is notorious for moving skus to different locations and putting the oddest categories together.
Space is an issue in the mega stores. It takes a lot of time to get from one department to another. It is also hardship for older shoppers. Unfortunately, the additional space isn't used as much to offer product variety as it is to store backup stock. Really, just how many bottles of ketchup needs to be displayed. Its safe to say, the company could substantially reduce the size of its mega-stores and reduce shopping time too, if they kept excess backup stock off the sales floor.
Notwithstanding their goal of making the checkout experience quicker, Wal-Mart continues to process more diverse, transactions through product checkout lanes. This has added time to the checkout process. Add to that the additional time it takes for poorly trained cashiers to enter new transaction types and you have impatient and frustrated customers looking for new places to shop like Tesco. Now with Wal-Mart adding banking services, the checkout process could get even longer.
Convenience isn't just about less in-store time, it is also about entire lifestyles. Tesco's smaller stores are a threat to big box retailers in part because they are easier to shop and have better trained sales associates, but also because many of their products will be more convenient for buyers to use. For example, Tesco will emphasize healthy, precooked foods and meals that requires less preparation time. Food concepts they have developed over the last half century, but relatively new to US competitors.
With fewer customers willing to buy, prepare, cook, and clean up after meals anymore, Tesco may well come closer than most retailers in integrating the ideas of convenience shopping and convenient products into one offer; illustrating the point that convenience is no longer just an event for consumers, but a state of mind.
Analysis: Unfortunately, many of the elements that lead to a convenient shopping experience are the very things that are sacrificed when discounters focus on low price. For instance, adequate staffing and reasonable training could help Wal-Mart simplify the customer's shopping experience. However, Wal-Mart's coverage has deteriorated over the last 5 years as has the level of associate training.
Consistent adjacencies both in terms of product placement with in departments, as well as, improved lateral adjacencies for complimentary products would also simplify shopping. But Wal-Mart is notorious for moving skus to different locations and putting the oddest categories together.
Space is an issue in the mega stores. It takes a lot of time to get from one department to another. It is also hardship for older shoppers. Unfortunately, the additional space isn't used as much to offer product variety as it is to store backup stock. Really, just how many bottles of ketchup needs to be displayed. Its safe to say, the company could substantially reduce the size of its mega-stores and reduce shopping time too, if they kept excess backup stock off the sales floor.
Notwithstanding their goal of making the checkout experience quicker, Wal-Mart continues to process more diverse, transactions through product checkout lanes. This has added time to the checkout process. Add to that the additional time it takes for poorly trained cashiers to enter new transaction types and you have impatient and frustrated customers looking for new places to shop like Tesco. Now with Wal-Mart adding banking services, the checkout process could get even longer.
Convenience isn't just about less in-store time, it is also about entire lifestyles. Tesco's smaller stores are a threat to big box retailers in part because they are easier to shop and have better trained sales associates, but also because many of their products will be more convenient for buyers to use. For example, Tesco will emphasize healthy, precooked foods and meals that requires less preparation time. Food concepts they have developed over the last half century, but relatively new to US competitors.
With fewer customers willing to buy, prepare, cook, and clean up after meals anymore, Tesco may well come closer than most retailers in integrating the ideas of convenience shopping and convenient products into one offer; illustrating the point that convenience is no longer just an event for consumers, but a state of mind.
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