Local approach works for Whole Foods
Through a special arrangement, what follows is a summary of an article from Retail Paradox, RSR Research’s weekly analysis on emerging issues facing retailers, presented here for discussion.
Recently, in a casual dinner conversation, a "know it all" but well-informed friend of mine asserted that Whole Foods was doomed to fail. The reason: Store managers are allowed to significantly impact what merchandise gets put in each individual store.
I asked him, "How could you possibly see store managers affecting their mix in a personalized, localized way as a bad thing?"
Mike told us that he’s friends with a Whole Foods store manager where he lives who’s constantly overwhelmed trying to figure out what to order and when to order it. He went on to insist that part of what makes a national chain powerful is its ability to standardize its product mix.
While certainly entitled to his opinion, Mike bases his opinions off both tradition and his own industry (online automotive parts and sales). In auto parts, it would be foolish to have a part available in one store and not in another. Or would it?
That’s when we started talking about differences in consumer demographics — how a mall-based apparel retailer in New York would most certainly not want to have the same selection as one in Miami, even if both were in largely Hispanic-American communities and even during the summer months. Enabling a store manager more input — even with some added stress — would indeed help make the store "feel" more like it should: stocked with the items that people there want to buy. Even in auto parts, he agreed Montana drivers have different vehicles and needs than LA drivers.
To drive the point home, the next day we visited the Whole Foods nearby in midtown Detroit. The store had a bunch of products neither one of us had ever heard of (a local bakery provided baked goods, a local salsa company provided chips and unbelievably delicious salsa), and it made the place seem just a little more like it belonged. So did the Detroit-style graffiti over the dairy department and the classic Motown vinyl 45s serving as checkout lane markers.
But here’s the thing: It’s not just people like Mike who still cling to the notion of "standardized equals professional." In our most recent Merchandising Report, only Retail Winners had any real grasp on the value of localized assortments (55 percent considered it "Very Important" for Retail Success) — and that’s certainly not a windfall. Apparently, when it comes to the value of making stores feel more like the communities they represent, change may come one conversation at a time.
- Whole Foods And Localized Merchandise: One Conversation At A Time – Retail Paradox
- Modern Merchandising: Managing Complexity with New Tools and Techniques – RSR Research
Are stores only paying lip service to localization efforts while still relying on standardization? Are localization efforts paying off in most cases? Can chains rely on local managers to manage the efforts?