Traditional Retailers Struggle with “Innovative Inertia”
Kevin Coupe, the proprietor and caretaker of “The Morning Newsbeat”, a daily on-line recap of the salient happenings in food retailing is one of my favorite people. While I don’t always agree with his analysis, he is a gifted writer and for someone that has never managed a supermarket or unloaded a grocery truck at three in the morning, has developed an keen affinity with retailers by listening and observing.
When recently reporting on the news that Tops and Bi-lo Supermarkets were likely to be the next traditional retailers to file for bankruptcy, Kevin referred to one of the key factors of these failures as “Innovative Inertia”. That term struck me solidly between the eyes as I think back on some of my recent discussions with traditional retailers. While these folks are very smart and accomplished people, to some degree they remain oblivious to the speed of how their shoppers and their businesses are changing.
To be fair, they understand that on-line and in-store pick up are services that are of growing importance to their shoppers. Others are beginning to recognize that the size and layout of their stores is becoming antiquated given the plethora of new, more efficient competition. Some are even testing new technologies and new methods of communicating to their shoppers, both inside and outside their stores.
With all of that acknowledged, walk in to most any supermarket today and you will see a remarkable resemblance to the same store you shopped at twenty or thirty years ago. I am talking about the basic tenets of the supermarket such as checkouts, fresh and refrigerated items chiefly on the perimeter of the store and long, tunnel-like aisles that house tens of thousands of items.
Most of these traditional retailers are not seriously considering changing any of that. In their defense, business is still pretty good using the tried and true traditional format. Further, many have initially experienced negative reaction from the shoppers when they have tried to “dramatically” change the format of the store or the locations of departments and categories. Familiarity of product locations is one of the reasons their shoppers still walk through their doors.
Consequently, ‘Innovative Inertia” wins the day. No reason to change until someone flat out proves to the traditional retailers that changing their approach are making significant gains with those changes.
While I understand the need for immediate impact, traditional retailers, if they are going to avoid becoming the next Tops or Bi-lo, must expand their strategic thinking beyond their love affair with long aisles and end caps and begin to test, develop and nurture new ways to engage shoppers in a way that is ultimately best for the shopper.
The journey will not be easy. It will demand embracing new merchandising and operational paradigms, leaving comfort zones behind. Positive results will not likely happen overnight, but given a vision and a cogent strategy, traditional retailers will find success from being non-traditional, in other words, innovative.