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08.09.2002

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NATURAL SENSIBILITY

Wellness Myth #1: Retailers Already Know and Understand the Wellness Market

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Store Within A Store: Segregation, Integration, Gentrification And Beyond - Part One

While shopping at my neighborhood Publix last week, I was surprised to find my Annie's Pasta (Mild Cheddar) missing. After looking carefully in the usual section (a haggard set of fixtures hidden next to the "Kosher" products), as well as several other aisles, I grabbed a manager who quickly explained:

"We've phased the Annie's products into our new Greenwise section located toward the front-right area of the store. You should check it out because if you like the Annie's pasta you'll probably find a lot of other products to your liking there...It's our new natural area."

And yes, the manager was correct. There at the front-right of the store - located conspicuously between the bank, the pharmacy and the restrooms - was a small section comprised of four half-aisles stocked with "all things natural." At several points above each aisle hung signs (replete with green and brown lettering) proclaiming this "Greenwise." And to close the deal, there were even a few fake plants adorning the endcaps, their green leaves bursting forth with greenness.

Initially curious to see what new products, services or features might have been added to the fray, I quickly realized the disappointing truth - there wasn't really anything new here at all. Indeed, the powers that be had merely rounded up a variety of existing products from different points throughout the store - "organics" from produce, granolas from cereals, nutrition books from the book section, yogurt from dairy, etc. - and "relocated" them to a centralized location, presumably for my convenience. In reality, the new "Greenwise" section, with it's implicit promise to better serve the needs of "wellness" consumers (Hartman Group research shows that this population in some stage of involvement includes almost everyone - awfully small section for such a large group of people), had succeeded only in making me relearn the location of this somewhat arbitrary collection of products.

Shifting now to the analyst's perspective, what we're really seeing here is yet one more iterative answer to the perennial question plaguing retailers who seek to expand into the natural products and/or wellness arena. Simply put, should we segregate or integrate our natural/wellness products?

Not so long ago, most retailers simply corralled (i.e., segregated) their so-called "natural" products into a tiny, out of the way ghetto, typically located near the "Kosher" or "Diabetic" sections (go figure?). Working on the assumption that consumers desiring such products were an "esoteric, marginalized lot," retailers devoted little effort to product selection, merchandising or location, figuring that anyone interested in such oddities as organic juice and herbal supplements would take the extra time necessary to track down this small, utilitarian section. And not so surprisingly, sales in this category lagged accordingly.

Yet as we all know, things have changed over the past 20 years. Natural products became "mainstream," and "wellness" became a household word. In an attempt to keep up with these changes, many retailers began experimenting with the idea of integration by trying, wherever possible to incorporate so-called "natural" products next to their "conventional" kin throughout the store layout: "Place the Annie's next to the Kraft Mac & Cheese," "...drop the soymilk down in the dairy counter," "put the carob cookies back where they belong, next to the Oreos," rang the popular refrains. And yet while seemingly more promising than the old-fashioned segregation models, this approach, too, leaves much to be desired. There is just something about the sight of a few random cartons of soymilk hiding in the back of a smelly, crowded dairy counter that challenges the basic notion of a wellness experience.

Aware of the generalized shortcomings outlined in both of the above scenarios, grocery retailers are, as we speak, moving forth with yet a third attempt at solving this puzzle. In this iteration, major retailers (e.g., Publix) are offering cleaner, updated versions of the "segregation" proposition with their much touted "store within a store" concept. As in the example detailed above, natural products are (once again) being rounded up and segregated back into a single section. The main difference this time is the "old ghetto" is a little larger, a little brighter, a little cleaner, and a little more centrally located - in short, gentrified. Interestingly, it's not necessarily that much of a stretch to suggest that the history of natural products retailing among mainstream grocers nicely mirrors the evolution of America's inner cities over the past 40 years. They've moved from "segregated ghettos" toward weak, half-hearted attempts at integration, before moving back toward "segregated ghettos," only this time in the more palatable form know as gentrification.

Yet most ironically, what remains missing in all of these reorganizations and redirected attempts at "solving the problem" - is the single thing that matters most here: namely, the consumer. Case in point, it is only by focusing such careful attention on these three supposed "solutions" to the segregation/integration challenge, that the real problem becomes apparent: all three are operational solutions to what is, at the heart, a consumer problem. Segregation, integration and the now ubiquitous "store within a store" may prove logical, intuitive and easy to implement from an operational perspective, yet they fail to address the lingering consumer need for more targeted, authentic wellness experiences.

Taking a cue from the now well-documented failure of bureaucratic, state-driven attempts to address urban policy in the 70s and 80s, we suggest it might be wise to pause and consider letting the consumer direct the next iteration of store-level changes designed to promote wellness/natural products. And if past experiences are any indication, what we can expect is not a one-stop, operational fix but a complete reformulation from the ground up - a thorough recasting of wellness and all things natural throughout the store in such a manner as to meet the lifestyle needs of today's consumers.

Stay tuned for Part Two of "Store Within a Store," next Friday for the consumer-driven solution...

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