Small Details Are a Big Deal

By
Paul Reuter, Chairman emeritus and contributing editor

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Gilliam & Co. is an independent research and advisory firm that specializes in retail and selected consumer products. Several months ago the company’s president, Margaret A. Gilliam, wrote an article that caught my attention. It was titled, “Why Smaller Stores Are Going to Rule.” You can see it on the company’s website at gilliamco.com.

Gilliam said in the article, “We’ve been through an era of ever bigger stores, which tend to be more efficient to operate. But big stores create neighborhood voids for smaller ones, and smaller stores can collectively obtain a competitive advantage with their convenience to the customer. With reluctant sales growth in recent years, retailers have been looking at productivity and investing in new software. They have found that more targeted inventory by location and merchandise lifecycle management can enable higher sales and lower markdowns, often with less inventory.”

The era of the big box is not over— on the contrary. But small is becoming the big opportunity, especially in densely populated areas.

Take, for example, Wal-Mart Corp.’s Walmart Express prototype. The concept is the smallest store format in the chain’s portfolio. As we’ve reported in our CSP Daily News, Walmart Express is reportedly less than 30,000 square feet; some estimate it will be only 10,000 to 15,000 square feet. The stores are said to focus on a broad assortment of brands and include grocery, a pharmacy and limited generalmerchandise items. This concept represents the closest Wal-Mart has come to directly competing against convenience stores.

Of course, competition is not the only thing we have to worry about. In recent weeks, headlines are all about the lack of job creation, the ever-declining housing market, high food costs and, of course, the big hurt: prices at the pump. All of those are unlikely to change anytime soon.

So the name of the game, then, is about how to maximize the store offering. It’s about perceived value, game-changing customer service, great promotions and advertising, and having the right assortment of the right products for the customer that result in your much-needed ROI.

So let me offer a suggestion along the lines of the latter. Samantha Oller, our senior editor and special projects coordinator, spent three months of this year putting together CSP’s annual Category Management Handbook. It contains nearly two-dozen data sources, hundreds of charts and sales data that examines the health of instore categories on SKU and brand levels, manufacturer and distributor shipment levels, and highlights of consumer research.

We are proud to let you know that each annual issue is an evolution and that its reputation has earned the most recent edition the endorsement of the Category Management Association. According to a guest column the association produced for this year’s CMH, “Overall, compared to just a few years ago, category management receives far more attention and credit for driving company success. More leading manufacturers than ever are going to market with a complete focus on category management—not brand strategy— and this focus accurately reflects the mantra that if you are giving shoppers what they want, then the shelf is set perfectly for maximum sales of every brand (including private label).”

Dick Meyer often writes about the need to “sell the right stuff.” So if Margaret is right, then we are in the right place and time. The key opportunity will be focusing on the products and services that address our stressed-out customers. To that end I highly recommend you dig into Sam’s fine Category Management Handbook work. She’s put together some “great stuff.” 

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