Keepin' it real: Whole Foods and Trader Joe's videos

People love their Whole Foods and Trader Joe's even though (or maybe because) they're not perfect. These fantastic consumer-made videos show the love even as they share the frustrations of the shopping experience

1) Whole Foods Parking Lot

Frustrations: Too few parking spaces, high prices ("$80 for six items"), annoying fellow shoppers who block the aisle while they are on their phone, "fools with clipboards" (people taking surveys outside the store), little shopping carts, out-of-stock items (Humboldt Fog Cheese), discontinued items (Kombucha), slow lanes.
Key quote: "This buster’s on his iPhone talkin to his friends/ Pickin up some cayenne pepper for his master cleanse./ “You’re the most annoying dude I’ve ever seen, brah./ Could you please move? You’re right in front of the quinoa.”

2) If I Made a Commercial for Trader Joe's


Frustrations: Too few parking spaces in the parking lot, discontinued items, poor sample rotation, organic sugar that won't pour, small coffee cups, the electronic field that locks up shopping carts, ripping paper sacks, people using the express lane with too many items, empty shelves at dinner time
Key quote: "It's aloe chunk juice, whatever that is..."

Anyone shopping at either of these stores (at any location) shares at least some of these frustrations yet we all come back for more. Yes, of course, the pluses outweigh the minuses but I think there's more to it than that. These frustrations actually make the stores more endearing. Why is that and what does that mean for customer experience design?

Does Whole Foods run any risk at all of testing a bar concept at its stores?

Mercado de San Miguel, Madrid

Short answer: No. USA Today reported earlier this week that Whole Foods is opening bars that will serve craft beer and local wine at its stores in a test before a wider roll-out. 

It seems to me like a perfect fit and something that will only help to build up the ambience of the store and its reputation as a friendly place to shop and a good place to buy wine and beer. In fact, I think there's still some way to go along this path. Last year, I visited the Mercado de San Miguel in Madrid and there you have a place that's selling and serving a whole variety of food and beverages to the point where it's difficult to even classify what kind of place it even is.

Not to say that this new concept might not run into some localized difficulties. It appears, for example, that there could be challenges with local liquor laws in some locations. Maybe it won't work in Utah? But, longer answer, no real issues and, in fact, a plus for the brand.

In contrast, I do see some risk for Starbucks which is also testing serving wine and beer in some of its Seattle locations. Perhaps this is just lack of imagination on my part but I think that this is a much higher level of difficulty and that the Starbuck's experience would be significantly changed, and not for the better, by adding alcohol to the menu.

Thoughts?

Sears selling Craftsman tools at Ace stores: How screwed up is that?

Photo: Craftsman Tools by tedmurphy (Flickr)

A couple of years ago, Edward Lampert, Chairman of Sears Holdings, signaled his intention to sell Sears' proprietary brands such as Diehard, Craftsman and Kenmore through other retail outlets. Now Sears has announced a series of deals bringing his plan to life:

• DieHard: Accessories will be sold by retailers in the United States, Puerto Rico and Mexico. (Batteries not included!)
  
• Sears Auto Centers: Will be offered as a franchise opportunity to car dealers
  
• Craftsman tools: 10% of the tools will be sold through Ace Hardware in all 4,500 stores beginning this June

Back when this idea first surfaced, I offered a very balanced list of "pros" and "cons." Let me be unbalanced this time round. This is a bad idea that will hasten the demise of Sears retail stores. At a time when most other retailers are investing in their Private Label brands to create unique customer experiences to help differentiate themselves, Sears is trading away its strongest brand assets. While zagging while everyone else is zigging can sometimes be the right thing to do, this is not one of those times.

In an interview with Marketing News Exclusives, Guenther Trieb, the Sears SVP in charge of this initiative is quoted as saying:

“The fact is, unfortunately, not 100% of Americans shop at Sears. We want to reach those customers who do not come to our stores, who prefer to shop elsewhere. … Once we grow the customer base, there’s a much better chance some of those customers will go find [a greater] selection at Sears of Craftsman and Diehard [products].”

Alternative interpretation: Customers who've been schlepping to Sears because that's the only place to get Craftsman tools, DieHard batteries, Kenmore appliances etc won't have to go there anymore.

There is one scenario where this strategy makes sense: If the company's planning to shutter most/all of its stores. Then it would clearly be important to give these brands the opportunity to thrive elsewhere. Is that where this is headed?

Can you love the Shack? RadioShack tries a makeover.

Photo: Landor

I'm rooting for RadioShack if for no other reason that it sports an identity that Landor developed back in the 90s. It's also encouraging to see that, after years of cost-cutting and in spite of the tough economic environment, RadioShack is tweaking its business model and investing in a new marketing campaign to reinvent itself. Unfortunately, it seems to me that the new approach has some serious flaws:

1) Business model/customer experience: RadioShacks are not big stores. That's part of the business challenge. Where Best Buy can make money selling big TVs with big margins, RadioShack has to find something else, something smaller. Mobile phones fit the bill and are already driving 1/3 of sales and that's before a new deal with T-Mobile. The challenge I see with this expanded role for phones is that it will crowd out the rest of the business, especially the traditional business of accessories and replacement parts. It's already hit-and-miss whether you actually find the part you are looking for when you go to a store and, with less space, there'll be less chance. And who, going into a store to find a cable stupidly left in a hotel room or some part for something that you should really be getting rid of anyway, wants to be power-sold a new and unwanted phone? Perhaps the plan is to get out of this traditional business or, move that business completely online?

2) Call us "The Shack": The part of the brand reinvention that has generated the most interest and comment is the plan by RadioShack to refer to itself as "The Shack" in marketing promotions. The logic behind the idea is that Radio sounds old-fashioned and that "The Shack' is more friendly. But brands need to be careful going down this path. There's a contrived familiarity about The Shack that is similar and just as bad as "The Hut" (a shortened version of Pizza Hut). It's we the customer that get to decide whether we want to give a brand a nickname. Can you imagine sending an email to all your contacts on Facebook and LinkedIn saying: "Hi there! Just wanted to let you know that, from now on, I'd like you to know me as (insert over-friendly nickname here)?"

3) That doesn't matter. Call us "The Shack" anyway: There's another problem with using "The Shack." "The Shack" already has meaning to people and none of these various meanings are particularly helpful to the cause or consistent with the message. What does it mean to you? Shaquille O'Neal? The Love Shack (B52s)? An actual wooden shack? The Shack is just not a particularly classy, quality kind of word. Focusing on it just reminds people of that.

So, overall, I'd say I'm not particularly optimistic that the new campaign is going to work. What do you think or are you all-Shacked-out already? I think I've said all I can on this issue what with this and, last week, two press interviews on the subject. Thanks to both journalists for calling me and selecting quotes that made some sort of sense:

1) RadioShack Plans Reinvention: Douglas MacMillan, Businessweek
2) RadioShack would like you to call it 'The Shack': Theresa Howard, USA Today

Safeway's to pitch its O Organics brand to competitors

Sitting in front of surly buyers trying to persuade them, sometimes plead with them, to put our shiny new, great top-two box scoring products into distribution was not the favorite part of my job as a brand manager.

The worst such experience--four of us sitting cramped in the Wal-Mart sales cell block (those that have been there will know I'm not exaggerating) waiting for a buyer who stormed in late demanding immediately: "Whattya got?"

I don't remember a later trip to Pleasanton pitching something at the Safeway headquarters being that much better. So what I would give to be a fly on the wall at the upcoming pitches that Safeway itself will be making to other retailers trying to get them to take on its O Organics line. James White who is leading this initiative must be made of some strong stuff to be attempting such an extraordinary, high level of difficulty initiative.

It's not entirely without precedent. As the comments to this Retail Wire article point out, Loblaw's had some success with President's Choice, and A&M succeeded with Eight O'Clock coffee. But these days, retailers are generally trying to build up their exclusive brands rather than peddle them to others.

Links:
1) Competitors to sell Safeway brands: Retail Wire

Whole Foods: Your new discount store?

Back in June, I reported on how we were reshuffling our mix of shopping trips to manage through the steep increase in food prices this year. I mentioned that Whole Foods was the biggest loser in this shuffle, replaced by more trips to Trader Joe's and Safeway.

Well it looks like we weren't the only ones deserting Whole Foods and now the store is on a mission to try and get some of us back. According to the New York Times, Whole Foods has launched a campaign to change its Whole Paycheck reputation and try and show its cheaper side. The company is offering more discounts, more lower-priced store brand products and even inviting customers on budget-focused "Value Tours." Sign up now!

Frankly, it's going to be a tough sell. But kudos to them for getting started.

Links:
1) Whole Foods losing in the supermarket shuffle: Brand Mix
2) Whole Foods Looks for a Fresh Image in Lean Times: New York Times

The Day You've Been Waiting For...

Some might say that the timing is a little off what with Starbucks announcing the closure of 600 stores last week. But hope springs eternal and now there's a new coffee shop just down the road for me to visit. Good luck to you intrepid entrepreneurs!

P.S. Don't you hate that when you run out of space when you're writing down an important message on a Pepsi poster

Tesco U.S. Refresh

Six months into its U.S. launch, Tesco is making some adjustments to its Fresh & Easy store concept.

After a fast and furious start, store openings were halted back in March and, after reports that the company was going to lose $200 million in its first year in the U.S., people started to wonder if the venture was starting to crumble. But now it looks like it was just a calculated time out and new stores are opening again with a few tweaks.

In an interview with the Financial Times, Tesco's U.S. chief, Tim Mason said that the main changes would be increased focus on price, more discounts and more promotional marketing. In other words, they are going to move closer to the traditional supermarket model recognizing that certain category rules can't easily be broken. However, they are going to continue to focus and grow their ready meals--this will continue to be a potential important point of differentiation.

Links:
1) Fresh & Easy: Brand Mix
2) Tesco: Fresh & Easy to lose $200 million this year: MarketWatch
3) Tesco To Ease Fresh & Easy Concerns With New Opening: CNNMoney.com
4) Tesco's US chief eyes further Fresh & Easy expansion: FT.com

Gap goes back to basics

Ah! The ebb and flow of brand extension. Right now, retail is ebbing.

As Lisa Everitt says in a BNET article: "Has the retail industry fallen out of love with the spin-off? Looks that way. Pier One Kids, Talbots Kids and Mens, and Bombay Kids are now history. All were launched in the early 2000s with talk of 'expanding customer loyalty to the brand' and all were buried this year with words like 'dilution of our core business.'"

Now Gap has announced that it's closing some GapKids, babyGap and GapBody stores and consolidating them into larger Gap stores. But wait there's more. It's also combining its major brands (Old Navy, Banana Republic and Gap) online so shoppers can buy from all of them all at once. Hopfully this ebb will stop before we see the equivalent of those National/Alamo green/blue buses or the KFC/Taco Bell restaurants.

Links:
1) Pick the Next Dead Retail Spin-Off: BNET

Whole Foods losing in the supermarket shuffle?

If the changing shopping habits from one family living in Marin, CA were, in any way representative of families in general, Whole Foods would have cause to worry.

This table shows our response to the steep rise in grocery prices. Back in those happy and cheap 2006 days, half of our grocery trips were to either Whole Foods or an upscale grocer (Andronico's). Now, those two retailers account for just one of every ten trips--Whole Foods hanging on by a thread because, according to my wife, it has the best fish.

The winners are: Safeway and Trader Joe's--Safeway being the best option for staples (but see note below) and Trader Joe's providing the variety and food adventure that we used to get from Whole Foods but providing it much less expensively.

Over in the UK, grocers are starting to respond to rising prices by highlighting ways to shop affordably. Both Sainsbury's and M&S have launched signposting campaigns ("Feed your family for a fiver" and "Dine in for two for £10") to help customers stretch their budget.


This particular campaign wouldn't work for Whole Foods and it's never going to be the cheap choice. But if it wants to stay on the list of grocery destinations, it may have to figure pretty quick its own variation on this theme.

Note: Being in the far reaches of the Wal-Mart empire, our nearest store is over 30 miles away and not a viable option (especially with the price of gas). If it were closer, it would probably have taken some if not most of the Safeway visits.

Links:
1) The tide turns. Wal-Mart rises: Brand Mix
2) Why oil and shopping don't mix: The Store Blog