The Lastword


The Goliaths are Coming, the Goliaths are Coming


a ‘‘


So, the share war battles among the goliaths are now going to spread like guerilla warfare into the small towns and burbs across the country. Well, not so fast big guys!


’’


fter two years of declining domestic same store sales, Walmart is finally getting it. However, it might be too late. What they finally “got” is a small-store strategy, that they now understand they must accelerate. But, it isn’t just about smallness.


The really big idea is what I rail about constantly. It’s really about preemptive distribution: If a retailer wants to win a consumer away from


a competitor, it’s imperative that they provide the consumer with convenient and instantaneous access (including the physical store). They must get to the consumer first, faster and more often than the hundreds of equally compelling competitors.


But the big question for Walmart: Are they too late? Is bigness too ingrained in their strategic mind to be able to execute a small strategy? More impor- tantly, do they really understand the necessity of a preemptive distribution strategy, which, along with small neighborhood stores, also includes a superior integration of all online and offline distribution platforms as well as the use of information and logistics technologies to ‘localize’ product mix (which is a must for small store success)?


Anyway, Walmart better put the pedal to the metal on its small store and preemptive distribution initiatives. If not, they risk preemption (no pun intended) by more of their competitors who are also getting it.


But Walmart is not the only big guy thinking small. Other big box retailers who have been in the pursuit of small: Home Depot launched its “lite” urban store in the 90’s; Best Buy is opening 150 small Best Buy Mobile stores, focusing on smartphones; Staples is planning on accelerating the rollout of a 4,000-square-foot model; Target has a small suburban and urban neighborhood model; Office Depot is re-positioning itself with a 5,000-square-foot store and touting itself as a convenience retailer; and, of course CVS and Walgreen’s are now fighting for every corner of every block in America.


Also, as predicted in my co-authored book with Michael Dart, “The New Rules of Retail,” the major department stores will also launch small, off-mall, neighborhood stores, such as J.C. Penney did a few years ago and will likely accelerate as the recovery continues. Further, we predict the department stores will eventually roll out branded specialty chains such as INC, Arizona, Stafford and so forth.


Finally – and another Walmart nightmare – we believe Amazon will develop and launch small neighborhood shops as showrooms, featuring localized merchandise based on consumer preferences in finitely defined neighborhoods, as mined from their Pentagon-sized consumer data base. In fact, this scenario was declared as one of Walmart’s greatest fears by one of their former top executives.


So, the share war battles among the goliaths are now going to spread like guerilla warfare into the small towns and burbs across the country. Well, not so fast big guys! You think with your smaller units you can march into these neighborhoods and summarily dismiss all of the independent or small chain specialists who have, over the years, won the hearts and minds of their neighboring customers? Remember David slaying Goliath?


Here are the advantages small independents have, why they own their turf, and why they will not easily be dislodged (again, right out of our book):


• Small independents are a solid brand, an intimate boutique or small shop with a persona that over time has an emotional connection with their neighbors.


• Small independents carry all of the things their friends love, which they learned over time through friendly chats in the store and cheering with them for local sports teams.


• The word service means nothing in a happy family. Do you treat a member of your family with good service? No. You treat them with love.


• The shopping experience, including the family feeling, will have been created just as product selection evolved (through living with their customer), all of it neurologically connecting with their neighbor.


• And, finally, small independents have total control over their business and its value chain, without which they could not have achieved all of the above.


So, the final most important lesson for the big boxers is that simply developing preemptive distribution strategies, making your big box small, and moving it into a neighborhood, will not win. If you don’t strategize how to do all of the above, or at least a modicum of it, the Davids out there will slay you.


Robin Lewis is a consultant, co-author of “The New Rules of Retail” and publisher of The Robin Report.


Robin Lewis


30 specialtyinsider.com


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32