The Question of Place

The Question of Place

Written for IGA Worldwide 2016

What role does the physical grocery store play in your retail organization? Or the more important question is: What role does the physical grocery store play in consumers' lives today? This question of the purpose, and really relevancy, of the physical grocery store is not only on the minds of retail executives, but as well on the minds of moms, empty nesters and emerging consumer groups—the latter of which grew up with mobile devices filled with billions of retail options that can easily be purchased at the click of a button.

We definitely live in different times and the old ways of "going to market" won't necessarily work as well in the future. In order to stay relevant, grocery stores have to seriously re-think the role, purpose and, ultimately, "pay off" for why consumers should shop at the physical store. The cliché claim of "build it, and they will come" is no longer a wise or prudent way to think about retail strategy. And touting the standard features of "price, variety, convenience, quality and service" is not compelling enough these days to motivate consumers to choose your physical store over all the other retail options and channels out there. In fact, if you are still competing on just these features alone, you are more than likely being undercut, out-marketed, out-serviced and out-maneuvered by the aggressive new breed of online retailers that directly go after these traditional claims.

The key for brick and motar retailers today is to offer something the others can't.

But what are those other features and benefits that you can offer? The more progressive food retailers today are getting out of the commodity game of just selling rows and rows of inventoried products and getting more into the market of selling solutions and experiences. While it's true that humans have a primal need and quest to acquire material items at the cheapest price possible, we also have a need and desire to seek out experiences that stimulate us and make our lives better or more meaningful. As proof of this, just think about how consumers select restaurants: Some meals are utilitarian and more like a re-fueling exercise, whereas other meals—the more profitable ones usually—are driven more by factors like the food philosophy, social experience or simply, joy.

By no means are we recommending getting rid of the standard variables of price, variety and convenience, but we can't advise that you go to market alone with these factors. In order to survive and thrive, we believe grocery stores have to add something more to the equation. More now than ever, grocery stores have an incredible opportunity to take people on a food adventure to learn about new foods, ethnic foods and fashionable foods that offer consumers a sense of discovery and enlightenment. Grocery stores also have one of the better opportunities to help consumers find and embrace a food philosophy that fits their specific lifestyle needs, interests and habits. And lastly, grocery stores have a wonderful opportunity to be more hospitable places that offer a social gathering around food. Already you are seeing many instances of grocery stores building out restaurants, pubs and mini-food experiences that allow seeming strangers to connect around food.

The future viability of the physical grocery store will not be won on commodity features, but will instead be lead by that of experience. Retailers need to be thinking about their store of the future prototypes in ways that not only solve problems for consumers, but provide human experiences that cannot be matched elsewhere.


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