Article

Opinion: Retailers, take back your shelves

A retail marketing expert argues for more differentiation, and less advertising, in the aisles.

February 25, 2010

This commentary was written by Jeff Weidauer, vice president of marketing for Vestcom International Inc., a provider of technological retail solutions based in Little Rock, Ark.

For the first time in nearly two years, something other than the economy has recently dominated the news: the weather. Snow fell in places that almost never see it, and records were set in many cities for low temps. Weather ultimately is a cyclical phenomenon, though. You may believe in global warming or not, but the planet undergoes weather cycles that may be years or decades or centuries long. In fact, virtually everything in life is cyclical.

Business is no different. Though we are currently deep into one of the worst recessions in modern times, we also know the pendulum will ultimately swing back to better times. We’re already seeing signs of improvement, and while things aren’t snapping back quickly enough, we know—just like we know spring is on the way—that the economy will get better.

Of all types of business, retail is perhaps one of the most cyclical. Annual plans are often focused on seasonal offerings driven by holidays and lifestyles. There are larger changes driven by customers as well. In short: people change, consumers change, and finally shoppers change. Needs and expectations change with lifestyle, age, technology and so on. The Baby Boomer generation is giving up its broad influence to the Millennials, who have different needs and habits, and are driving change of their own.

Over the past generation, stores lost their individuality, becoming homogenous and undifferentiated in their product assortment, price, and promotional offers. Virtually nothing was left to define one retailer from its competitor across the street; it was said that you could drop a customer into virtually any major supermarket and she wouldn’t be able to tell which one she was in. Even more telling was the fact that it probably wouldn’t matter to the shopper, because it all looked and felt the same.

A major factor in this lack of personality came when stores began selling space for advertising. It didn’t take long before more than the products on the shelf looked identical; there were identical ads on the shelves, carts, floors—you name it—across competing stores nationally as major CPGs saw a more efficient method to advertise.

The minimal differentiation between stores was eliminated by the ever-increasing blight of signs, banners, posters and giant television screens in every available space. But the hook was set: retailers were making millions of dollars from advertising, and they were now dependent on this revenue as sales through the front door declined.

One day we woke up to find ourselves overstored and making all our money through the wrong door. Restaurants were taking people away from home to eat, superstores owned price, and grocers watched as both their market share and share of wallet fell. Then the economy imploded.

The good news is, much like spring, change is on the way. Retailers are taking back their stores, and their shelves, and learning to sell again. Shoppers are returning, wanting to learn how to shop as well as how to cook, wanting more from their stores. "Neighborhood, local, and relevant" are the new watchwords. Shoppers are looking for authenticity, not just in the products, but in the seller of those products. Differentiation is coming back, with better branding, and a growing commitment to the shopper above all.

Taking back your shelves need not be expensive, and any loss in "wrong door revenue" can be overcome. Consider these aspects as you begin to take back your shelves:

Be relevant—do more than offer price; offer information or guidance to build trust between you and your shoppers.

Be consistent—make the shelf edge yours, and make it work for you by letting the shopper know that you support what she sees there. For example, one way food retailers can differentiate and engage shoppers and foster longer-lasting consumer relationships is by offering nutritional information at the shelf, based on the retailer’s health and wellness strategy.

Be accessible—put your message where you know the shopper is looking; the shelf edge is a great place to start.

At long last the cycle is coming around to focus once again on the needs of the shopper. But preparation is critical, or you may find yourself a casualty of the "other" storm of 2010.

Photo by sashafatcat