02.21.2007

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One-Stop Shopping And The "Busy," Conflicted Consumer

The Future Is Lifestyle Relevance

Consumers say they want convenience. They describe busy lives, and a need to simplify for the sake of managing stress. One would imagine that one-stop shopping would be an ideal way for those consumers to get everything they need quickly and easily. But for many consumers, that just isn't happening. In fact, even stores that set up to be "everything" (the Mass channel, in particular) are often used by shoppers for very narrow slices of their total product offerings. For example: "I go to (Mass channel retailer) to buy toilet paper, toothpaste, deodorant and some cheap everyday shampoo, but that's about it. I might buy a box of cereal but I really don't buy food there." Or, as is often the flip side: "I go to (Grocery channel retailer) for food, and not much else. I might buy some garbage bags if I'm really desperate, but usually, just food."

In the midst of this, retailers, applying an analogue of "brand extensions," push expansion of in-store products and services. Mass retailers are becoming more massive and Grocery channel retailers play with offerings outside of the core competence that consumers recognize, like selling patio furniture, and offering quasi-clinical health services. This profusion flies directly in the face of very robust consumer trends, and one wonders if the real solution to today's highly competitive market is to offer more of what you aren't good at. (Perhaps Microsoft should start making hockey sticks, fruit smoothies, and suntan oil? Probably not.) Some retailers, though, like Trader Joe's, simply stick to what they are good at and known for, avoiding carrying a "full line" of products and (over) saturating every category. This latter approach would seem to be the best one.

What do consumers really want?

Consumers themselves are often somewhat contradictory in their opinions and ideas about one-stop vs. multi-channel shopping. The same consumer will tell us that she prefers one-stop stores and multi-channel shopping trips almost in the same breath: "I love going to (Mass channel retailer) because I can get everything I need in one stop... (fourteen seconds later) I like to go to (Grocery channel retailer) because the meat is kind of nasty at the (same Mass channel retailer)."

Are these consumers just confused? Are they rationalizing, not as nearly "busy" as they claim to be, and able to cross-shop extensively? What's going on? What's really driving the multi-channel shopper? What does it mean to retailers, and where should retailers focus their efforts on attracting these shoppers?

From a consumer standpoint, it becomes a question, more, of what they want rather than what they need. Once consumers begin to qualify their descriptions of their retail habits with phrases like "well I will go to (conventional grocery or mass retailer) and buy it in a pinch, but I usually get it at (specialty store)," it's obvious that they've gone beyond simple "need" (and it's also likely that they are becoming less sensitive about price). They do want convenience, only they want the right products, and lifestyle-relevant experiences, even more.

Ultimately, in a behavioral sense, consumers are making choices on a category-by-category basis, shifting from an emphasis on commodity (where price and convenience are often the most important dimensions) to an emphasis on distinction (understanding the fine-grained differences between products, their attributes, and overall quality) in categories with lifestyle relevance. Some categories are more resistant to lifestyle relevance than others. Who, for example, nit-picks about aluminum foil? Perhaps a few people do ("I can't believe you got me the thin, cheap stuff!"), but relatively speaking, aluminum foil is likely to persist as commodity for some time. But fewer and fewer products and categories are and will be resistant, as all but the most trend-lagging consumers continue to shift toward richer engagement with their goods. It is no longer "Do you have salt" but "What kind of salt do you have? Red Hawaiian?" It's not about stocking moisturizer, but in having the right varieties of non-perfumed, botanical moisturizer. For most this isn't news at all - we're all aware of the rise of specialty channel retailers in providing new, interesting and fancy products that fascinate many shoppers. Much of the retail world, especially where CPGs have a heavy presence, however, has yet to project that awareness into retail space. So, again, what to do about it?

What can retailers do?

Focus on relevance. Pay attention to your consumer and get to know them better. Answer questions such as...

• What are their lifestyle interests? Are they budding foodies? Are they becoming more interested in health and wellness?
• Are they also shopping elsewhere to meet those lifestyle interests?
• What categories are important to them?
• What are the larger cultural (lifestyle) meanings of products in those categories?
• How do they shop those categories?
• How can categories be used to pique customer interest (particularly with respect to the themes of authenticity and knowledge)?

Focus on using the answers to the above questions - complete answers, not just results from a half-baked survey written by someone certain they already know those answers - to plan for a richer retail experience for consumers in relevant categories.

Don't venture into categories and/or product and service offerings where you can't cultivate a believable competency or where there is low lifestyle relevance to consumers. Stick to what you are (or could be) good at.

Understand and cultivate your existing key competencies - and get help developing that understanding, as often times internal interpretations of competencies are quite distinct from consumer interpretations of the same.

• Accentuate any synergies between those competencies and key consumer lifestyle categories.
• Don't distract consumers by reaching too far outside those competencies, to areas that will be interpreted as "just marketing" and less-than-authentic in your particular retail context.

Forget about variety and selection where they do not matter.

• Emphasize variety and selection in lifestyle-important categories, but not in peripheral, non-relevant categories - avoid diluting the retail experience with too many SKUs in less relevant categories (e.g., how many varieties of instant white rice will your customers peruse, or will all those boxes just become a big distraction?)

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