Why Don't Supermarkets Have Brands?
It may come as a surprise to the type of supermarket chains to learn that almost to a fault, none of them owns a brand. They think they do, but they do not. The proof, as they say, is in the pudding. The only imagine to invest in the construction and maintaining of a brand is to growth your preference or growth your margins. Against that acid test, supermarket chains come up sucking hind teat.
LOWES
There are a few major exceptions, and we will disclose them as we proceed, but the battle for supremacy in the supermarket gambit has come down to location, location, location. Look around at your own neighborhoods and you will fast see the reality of the situation. Supermarkets, like their poor stepsisters the pharmacy chains, are in a rush to build more and more stores. They perceive that in order to dominate a local market, they need to be the closest purveyor to the shopper's home. That is not exactly the pure definition of a brand is it?
The firm Model Tells the Story
They identify this fact in their bones which is why their firm model has them scampering to build new shop as close as potential to developing residential areas. Yet, they pretend to themselves (and their stockholders) that they have a brand. To Harris Teeter, Acme Markets, Lowes Foods, A&P, Pathmark, Publix, Giant, Win-Dixie and the Piggly Wigglies of the word I have a short and pointed warning... Watch Out! Wegmans is coming!
Harris Teeter, for example, believes they have a brand. They believe they are "the upscale choice" but deep down they identify the fallacy in that claim as they build more and more shop in more and more neighborhoods. They perceive that their brand is not a destination, and that aside from the "brand" of habit, shoppers will not ride by a competitor's store on a regular basis to shop at a Harris Teeter. They know that their store does not laid out a "destination" -- there is no sense of arrival, no sense of specialness and therefore no Real brand.
Wegmans is a Juggernaut
What makes Wegmans so formidable? They learned their brand lessons well and are playing brand hardball. Borrowing on the specialty marketers like Whole Foods, Fresh store and Bread & Circus, and the upscale brands of Four Seasons and Ritz Carleton, they recognized that brands that differentiated the customer enabled these brands to become destinations. They became a magnet for those seeking specialness, specialty, high potential foods, and caress -- within a geographic area. When the shopper believed they were a more discriminating shopper(what we call a Brandface),these shoppers were willing to inconvenience themselves by traveling a greater distance to satiate that self-identifying need. They would also be willing to pay higher costs for that same self-identification.
Remember that brand, the kind of brand that makes a type player a destination, is not a record of the store, it is the self-description of the buyer -- who they believe they are. The greater the store's potential to satiate that self-description, the more remarkable the brand. Does the Harris Teeter or Publix shopper believe they "have arrived" when they shop? Do they see themselves as smarter, mores discerning and erudite? Not according to Harris Teeter or they would not need to build a new store every 1.8 miles!
Think Differently
Wegmans took the lessons from Fresh store and Starbucks and recognized that the contemporary grocery shopper wanted to have an caress when they shopped. They believed that shoppers wanted to have entrance to and be surrounded by "the world of fine choices" even when they were simply shopping for Campbell's Soup. The baby boomers, Gen-x and Gen-y customers believe the shopping caress should be as keen as utilitarian and that the yearning fordiscovery was woven into the fabric of their being.
Does it cost more to originate a Wegmans than it does a Lowes Foods? You bet it does. It requires an investment in brand, brand management, architecture, interior design, buyer anthropology, and world-class buyers. However, these costs are dwarfed by the short term explication of the escalating construction costs of duplicating sores in repeated markets within saturated residential areas.
The Category's Problem
Why then, is the supermarket type so stale and delinquent in its own space? It is not because they lack talented habitancy or smart planners. It is because they have bought into an old and stale idea of brand. They have come to believe that they can differentiate themselves from the contentious set by restating generic type descriptions like fresh, quality, choice and fair prices. They think they can Own a position that is the providence of the whole category... Like, "the beef people."
Where is the Future?
What does this mean for the time to come of the category? It means the stakes are being raised because the type is demanding more. The real problem for the major players can be found in the existing store space. The sooner they invest in their brands, the best for their shareholders because an investment in today will ultimately cost less than a forced investment tomorrow. caress and discovery has as its table stakes; larger more open square footage, broader specialty departments, and an comprehension of the preceptive fabric of the target audience. This means existing store locations may be inadequate in the future.
Bigger is not necessarily better, it is only best when bigger incorporates entertainment, discovery and experience. These are the hallmark of the busy and demanding shopper of today, as well as the shopper of tomorrow. Will a Starbucks coffee bar differentiate your brand? Not on your life. Instead of adding a Starbucks coffee bar to your &
Supermarket Brands Are In Real issue LOWES
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