Localization, not standardization, the new winning retail strategy

Wall Street Journal: With consumer confidence eroding and retailers seeing sharp declines in sales, Edeka is one of several Western European grocers taking advantage of the strategy of "localization." The capability to cater to local preferences in a cost-effective way may help position these companies to weather the economic downturn better than their competitors. Western Europe's top-performing grocers grew at twice the industry's compound annual growth rate between 2000 and 2006. One practice that set them apart: The winners are more adept at localizing their offerings.

Standardization initially helped retailers to expand efficiently. But localization has enabled a number of leading retailers to stand out from the crowd and gain market share. Just as too much standardization leads to stagnation, too much localization can cause costs to spike. Many of the leaders in the grocery business have learned to strike the right balance.

Click to continue