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November 2007 - Strategy Magazine
Forum

The entrepreneur and the academic
Retail wisdom: why is it almost an oxymoron?

by Tony Chapman and Ken Wong
page 92

From: Tony Chapman

[tchapman@capitalc.ca]

To: Ken Wong

cc: Mary Maddever

Subject: Who owns retail?

We have heard all the stats - 70% of purchases are made on impulse; mass advertising recall is at its lowest level ever. If both hold true, why is retail, which should be the last three feet of a marketing plan, often disregarded as a place to build brands?

From: Ken Wong

[kwong@business.queens.ca]

To: Tony Chapman

Great point. I suspect it is the same reason why people struggle with new media. We know it matters, but there's precious little research on how to do it right or even on how consumers act at the point of purchase. I tell people, "Park yourself in the aisle and watch people buy your category." Those who take the advice come back and say, "Wow...did you know...?" Those who don't will usually respond, "That's hokey," or "That's not what marketers do." Silly me...I thought marketers looked for consumer insight.

From: Tony

To: Ken

LMAO. Too many marketers use trends as insights, and beautiful research decks as their justification. The only way you can hope to uncover a killer insight - one that provides your brand with white space - is to roll up your sleeves. To get to know how your consumer thinks, feels and behaves means observing them in store.

Sunsilk's "Wig Out" viral is a great example of using an insight - the extreme emotional reaction that woman have to a bad hair day. To determine whether this insight has any market power, you need to spend time in the shampoo aisle observing how women continuously shop this category, looking for the miracle hair product. That spells opportunity.

From: Ken

To: Tony

And the opportunity doesn't stop with the consumer. Every retailer wants to max out their sales per square foot and every supplier wants to find some way of cementing relations with retailers. But you can't do that by simply fighting with other reps to see whose computer-driven planogram is used. This is especially vital in an era when even the big-box stores recognize the need to be neighbourhood- and often ethnically focused. Do Asians shop differently than Europeans? I'm not sure, but I'd really want to know depending on my retailer's store location.

From: Tony

To: Ken

I couldn't agree more. Commodification is rampant in the marketplace, and the middle ground has collapsed, leaving the consumer to trade down to price or trade up to super premium. This consumer behaviour isn't just affecting brands, it's killing retailers - the dollar store is the fastest-growing category in North America.

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