While You Were Sleeping ...

Don't let a highly functional format get in the way of change and innovation.

By  Kevin Ervin Kelley, Principal

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If you are a lawyer, at some point you probably get used to the hun­dreds of jokes out there about the legal profession. (How many lawyers does it take to change a light bulb? How many can you afford?)

Or if you are a banker today, you are increasingly keen to the sharp-tongued and mean-spirited jokes people now have about the banking industry. (Why don’t sharks attack bankers? Professional courtesy.)

Convenience stores, deservedly or not, also suffer certain stereotypes that are long-held truths, such as stale coffee. (Where do construction workers go if they run out of mortar? A c-store for coffee.)

What makes these jokes so funny? Well, certainly there may be a little bit of truth and retaliation in the jokes. They are one way to put some of these guys in their place and maybe knock them off their pedestals.

But the other side of the joke is that most of us have formed a deep impression about these professions or places and their predictable patterns of behavior—stereo­types that admittedly are hard to shake.

Well, I am an architect. And yes, I am aware of a few stereotypes my profession has garnered. Fortunately, we are gener­ally not hated by the public. But people do sometimes think of us as effervescent characters who drive pink Mercedes while wearing funky watches, basket-weave shoes, bow ties and perhaps even a cape. (Get out of the way—an architect is coming!)

But after working in the design field for more than 25 years, I have to admit that some of the architect jokes are prob­ably well deserved. Many of my design colleagues are less concerned about the bottom line than about straight lines. And we are sometimes rightly perceived as a bit lofty, esoteric, unrealistic and “out there.” Because of these perceptions, designers are generally not taken as seriously in the busi­ness world as they should. That’s unfor­tunate because, in my experience, one valuable thing architects can contribute is reading the tea leaves of society. Architects tend to see what’s going on in society and anticipate trends long before most people do, mostly because they have trained their eyes to observe and imagine things that most people don’t.

While this skill of reading society is valuable, designers admittedly run the risk of sometimes being too far ahead of the curve for the business world. Conversely, retailers are often too far behind the times and entrenched in their well-worn formu­las. Many retailers out there lack the right apparatus, antennae, cultural curiosity and observational systems necessary to sense the subtle yet pivotal movements of society. They often overlook, dismiss or just plain miss the critical signs that point to where things are headed.

Grocery Stores and Change

I have spent my entire design career working in retail, particularly food retail. Some of my oldest clients have been the major regional grocery chains through­out the United States.

I remember distinctly back in the 1990s when my grocery store clients were all dismissing, and in some cases even laughing about, newfangled concepts such as Whole Foods Market, Trader Joe’s, Costco and yes, if you can believe it, Walmart. Even though their focus group reports kept coming back with repeated mentions about the interest and appeal of these stores, my clients would often tell me—with the confidence of a reign­ing champ—that nobody cares about formats such as that of Trader Joe’s (“It’s for Volvo-driving professors”) or Whole Foods (“a bunch of bean-stringing, bark-eating liberals”). In their minds, these concepts were just too far left of center or on the radical fringe to be taken seriously as a threat. Walmart and Costco seemed like shrewd operators, but that style of shopping “would never catch on” with their loyal customers, at least not anytime soon. “Not to worry,” they said. “Let’s just keep our eye on the ball, and you help us do the same thing we’ve done for genera­tions, but just make it better.”

Revenues and profits for the tradi­tional grocery store channel were strong back then, and some chains were making money hand over fist. You didn’t neces­sarily have to be cutting edge, on trend or even particularly innovative to succeed. According to the “reigning champs,” it was a pretty simple formula: clean stores, lots of wide aisles, ample shelving, good quality lighting, the standard stock of popular CPG brands and a high level of friendly customer service. That is what the customer wants, or so went conven­tional wisdom.

We as retail designers sensed some­thing happening in the food world. Something new was emerging in consumer culture—value—and the “extreme” players were onto it. While varied in approach, these retailers focused on a core audience and provided them a value they could not find elsewhere.

Meanwhile, sad to say, the tradi­tional grocery store is in trouble today. As shocking as it may seem to some, the conventional grocery-store format seems to be on the verge of becoming an endan­gered species, a relic of the past that is increasingly approaching irrelevance for the contemporary shopper.

Most forecasters and industry analysts predict that the dollar share of traditional supermarkets will continue to shrink over the next several years. Nobody at grocery is laughing anymore about the non-traditional, formerly fringe formats such as Whole Foods, Trader Joe’s, Costco or Walmart. In fact, most grocery store chains are now trying desperately to figure out how they can replicate the success of one or more of those brands (or, better yet, get their resume over to the right people there). But trying to copy the new industry lead­ers doesn’t really work, despite repeated attempts, for a number of reasons.

The Adaptation Formula

If there is anything I have learned in my career, it is that nothing ever stays the same in retail or food. New consumer trends emerge every day, and the way we live keeps evolving. The pace of this social change is only accelerating. At the same time, new retailers and retail approaches are emerg­ing with near equal speed (just look at the latest Target or Walgreens for examples).

Traditionally excellent retailers are extraordinarily talented at identifying, supplementing, upgrading and imple­menting operational systems that benefit financial bottom lines. They are experts at turning routine processes into exceed­ingly efficient procedures, eking every penny out of a supply chain to increase profits, for instance.

Where traditionally excellent retailers are often quite vulnerable is in the rela­tionship between their internal operation formulas and their external approaches to understanding consumer behavior, trends and the overall customer experience.

Consumers are not static. They are constantly on the move and constantly changing their mind. This fluidity creates problems for organizations too heavily focused on internal, efficiency-driven formulas. At the same time, these con­sumer shifts create opportunities for retailers who recognize them and then design experiences and offer products or services to best respond.

Companies such as Apple, Whole Foods, Costco, Trader Joe’s and Starbucks are not only masters at operations—the internal formula is the foundation for retail success, after all—but they have also created their own proprietary adaptation formulas to respond to the consumer. The adaptation formula is a process, but not a static operational process. By constantly reading and adapting to the consumer and competitive environment, these brands stay relevant and keep shift­ing away from their potential stereotype niches. They joke about themselves before they can become the butt of any jokes!

As retailers, the key point to remem­ber is that while you are sleeping, things keep changing out there—both among consumers and competition. This is simply the nature of retail markets and consumer demand.

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