Can we learn anything from Kroger?

June 24, 2009

Is there a lesson for the furniture industry in the recent gains grocery store chains are enjoying, thanks to their back-to-basics strategy?

The Wall Street Journal reports that Kroger, Publix and other grocery stores are seeing added profits in the so-called center aisles — where they sell things like canned vegetables, cereal, pasta and flour — gaining back ground they previously ceded to companies such as Wal-Mart and Costco. (You can read the WSJ story here with an online subscription).

This basic-offerings approach, driven by the recession and the consumer’s shift to more home-cooked meals, is “upending a multiyear strategy of using coffee bars, fancy bakeries and exotic product to attract shoppers,” the story said.

While I’m pretty sure furniture is not edible, I wonder if there may be a lesson for furniture stores somewhere in all of this.

Just as grocery chains once moved to the periphery to keep customers coming into their stores with everything from floral shops to coffee bars, many furniture stores have done the same thing with fresh-baked cookies and cafes to keep their visitors happy.

The Wall Street Journal article also notes the success Kroger and others are having with their value-oriented store brands as consumers look for ways to save. In our industry it seems store brands are too often used more as a way to keep the customer from comparison shopping. Where’s the value in that?

Maybe what the furniture-shopping consumer wants even more than a fresh cookie these days is a good deal and a great value on some the most important furniture for the home — the sofa, the television consoles and cabinets, bedroom groups and mattresses.

Maybe they want to know that the store is going to be around tomorrow and that the salesperson is knowledgeable and understands that everyone today is worried about losing a job or getting the next one. Can that salesperson point the way to most appropriate furniture for a tight budget or clearly explain why dropping a few more dollars will be worth it in the long run, without coming across like a shark eager to beef up a ticket?

Everything else may be like the extras that appear to have companies like Whole Foods underperforming companies like Kroger. Are all those extras keeping you from offering the best deal on what you really sell?

I love the smell of fresh-baked cookies and fresh-brewed coffee as much as the next guy, but how much for the sofa?

Posted by Clint Engel on June 24, 2009 | Comments (2)

Industries: Furniture Retailing

June 29, 2009

In response to: Can we learn anything from Kroger?
Clint commented:

Thanks, Mary. All great points. I hope retailers are doing all these things ... and thinking about how this economy may be changing their customers' appetites.

June 25, 2009

In response to: Can we learn anything from Kroger?
Mary Frye commented:

Clint, I enjoyed your observations about grocery stores and furniture stores. There is a big difference between selling consumeable goods and durable goods. A challenge for most furniture stores is that people don't come into them very often unless we are able to create a memorable experience they want to repeat. If we wait for furniture to have to be replaced because it doesn't work anymore before we expect to see a customer, we wait a long time. If we put out information describing all the new functionality furniture can offer, we may have a chance of more visits. If we offer refreshments while customers are in the store, that surely can't hurt. What a retailer needs to do is whatever their customers will place value on and it varies from store to store. And retail editors and Association execs can't tell a retailer what that should be. Only a retailer's customers can answer that question. So, retailers add things that they think will make the experience of being in their store more enjoyable and then ask how people like them. They talk about their motivation for doing something and ask for their customers' opinions. They take credit for wanting to make their customers more comfortable. They make changes when what they tried doesn't work. They think about what they like about a situation when they are the customer and then they try to build those things into their customer's experience. They remove obstacles for doing business with their store, like parking, store hours, product selection, pricing, delivery service, sales people, store policies that serve the store and not the customer, etc. Retail has never been harder and customers have never been harder to impress or please. But they are still our target and retail doesn't happen if there are no customers.