Photo: Publix
Publix decides the time is right for an experiential, two-story concept
Popular regional grocer Publix has been expanding its footprint northward for a number of years. With its new pilot store, management is indicating plans to expand its individual stores vertically, as well.
Publix has opened a two-story test concept store in Tampa, according to Progressive Grocer. The store features 48,000 square feet dedicated to grocery, a deli island and a cooking school kiosk. No self-serve food bars are present, but Publix designed an area showcasing hot and cold prepared foods.
The front of the store features a permanent staging area for online orders, and there is a dining area upstairs on the second floor. Outside, the store features two areas for online order pickup and a drive-thru pharmacy.
The much larger store marks a change from the grocer’s recent strategy, which has consisted of experimenting with sub-30,000 square foot store locations.
Multi-floor grocery stores with restaurants, bars, extensive food and salad bars and other experiential elements grew popular in the last decade, with higher-end grocers like Whole Foods developing a reputation for store experiences that combined grocery shopping and entertainment. The popularity of such concepts has, however, diminished due to the novel coronavirus pandemic.
Publix has continued to post a high customer satisfaction rating during the pandemic. In October’s American Customer Service Index (ACSI) Special COVID-19 Retail Study, Publix ranked alongside Costco with a score of 83 in customer satisfaction, below only Wegmans and Trader Joe’s.
Despite concerns over contagion keeping customers from interacting fully with experiential grocery stores the way they did in pre-pandemic times, Publix is not the only grocer to look at launching larger concepts during the pandemic.
Discount grocer Aldi in early December opened a 25,000 square-foot store in Philadelphia, much larger than the typical 16,400 square-foot location.
Nor has the pandemic discouraged some grocers from looking toward an experiential future. In May, Mariano’s founder Bob Mariano announced plans to open a “next-gen” grocery store in March 2021. The store, prospectively named Dom’s Market & Kitchen, will feature open food prep areas, wine tasting classes and areas for both take-out and in-store dining.
- EXCLUSIVE: Publix Debuts New Prototype in Tampa – Progressive Grocer
- Amazon Falters During COVID-19, While Costco, Etsy, and Nordstrom Take the Internet Retail Crown, ACSI Data Show – American Customer Satisfaction Index
- Is a new store concept the start of something bigger for Aldi? – RetailWire
- Grand Opening – Aldi
- Bob Mariano has plans to create a next-gen grocery store – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Will experiential grocery store concepts make a strong comeback in the years ahead? Does Publix’s test concept appear to have made the necessary adjustments to account for increased online buying, pick-up and other COVID-influenced behaviors?
Poll
BrainTrust
I believe these formats with elements of theater will come back post-pandemic. Wegmans made the decision to close some restaurants in some stores, which was the right move. In regards to the Publix test, most of the large chains — Kroger, H-E-B, and the like — had already started making changes in store model and design to accommodate BOPIS, curbside and delivery, and other chains are also beginning to follow those steps. Much of this has been done during the pandemic and a quick pivot will be necessary for those stores to re-visit the quick makeover to ensure that there is truly enough space, labor and technology to support something that has become permanent – earlier than most thought it would before the pandemic.
Grocery, food tasting, and live cooking demonstrations all are highly synergistic. These in-person experiences will be a competitive differentiator for retailers to combat the online grocery delivery companies. Publix’s strategy makes a lot of sense. Others will want to emulate it, but it comes down to the ability to invest.
Building up rather than out cuts real estate costs. At the same time, the extra space gives Publix flexibility for staging for online orders, for increasing warehouse space, and for adding experiences (like cooking classes) for consumers. This is definitely another interesting experiment to increase adaptability.
For me experiential often boils down to “how to.” And I also now think in terms of “Explore + Experiment = Experience.” So an experiential grocery store that will teach me how to expand my universe of what and how I cook for myself zooms to the top of the list. That would be worth a couple extra minutes in the car.
Best-in-class retailers are already making changes to their store layouts. Everyone has come up against the issue of scaling curbside and delivery. They know that to make this profitable they need to think of their stores in some capacity, more like a fulfillment center than a store. Best Buy is a great example of a retailer moving quick to adapt. One constant in retail is change. New store prototypes and experimenting with formats is the visible way for a retailer to stay fresh and current in their customers’ minds.
This is awesome. There has been talk of “experience retail” for some time now so I am glad to see it being used in grocery. It is clear that once the pandemic is over people will crave company and this could drive customers to stores – which stores will depend on the overall experience. Stores have to evolve and become multi-purpose – it is great to see Publix realizing this and investing.
Fortunately, the pandemic’s influence on shopper behaviors should diminish as we move through 2021. Influenced by the phrase “innovate or die,” Publix and others recognize now is the time to refresh and upgrade their offerings. Perhaps the king of innovation is Amazon, with seven different retail stores across different retail categories. In the grocery space it offers the following: Amazon Go Grocery, Amazon Go cashierless convenience store, Amazon Fresh Pickup, Whole Foods and Amazon-branded grocery stores.
The retail innovation of Publix, Amazon and others during the so-called retail apocalypse, with U.S. stores closing by the thousands, underscores their commitment to the future. It also cements their leadership positions with shopping paradigm shifts. When a paradigm shifts, everyone goes back to zero and will be forced to copy the innovations of these visionaries.
Kudos to Publix for planning for retail’s big bounceback. Once the vaccines take hold and we begin to re-open, I expect a rush of people back to the stores, and engaging experiences will once again matter. Going up seems like a brilliant move to add the square footage, and it sounds like they have considered new buying/pickup models as well. Although I do expect a sharp decline in online grocery once we reopen. I honestly can’t wait to wander the aisles looking for inspiration — and to pinch some produce again. And I don’t think I am alone!
Publix is smart. They know their numbers and they know their customers. Experimenting with the larger store will give customers more space for “social distancing.” Long-term, Publix can utilize the space for other uses, such as for pick-up and delivery staging, cooking schools, etc.
Of course Publix is innovating around COVID-19, and of course the focus is on the customer experience. I’d expect nothing less. It will be exciting to see what this chain and others do to get consumers excited about retail again.
Retailers – especially supermarkets – are all rushing to get back to pre-pandemic normal. Improving the shopping experience is one tactic, but whether customers will find these changes compelling remains to be seen. Online shopping is mainstream now, and that’s not likely to change. Whatever the new normal is, it won’t be the old normal. Plan accordingly.
The description of the Publix experiment is almost the exact layout of my local Whole Foods here in the city. Ground floor is grocery, bakery, prepared foods, butcher, fresh fish and deli. The second floor has everything you would find in a drug store without the pharmacy. Shampoo and soap, supplements, OTC drugs, beauty care. Additionally there is a coffee/juice bar and a dining area. Since COVID-19, they have added a staging area for deliveries.
Outside there is a separate entrance to the street where the cavalry waits to grab the deliveries and get them to the shoppers within two hours.
From a business model POV, the second floor is always less expensive. It is a great way to expand to amenities that don’t directly generate the same ROI that is needed on the ground floor and offer those enticing alternatives to just plain grocery shopping.
First of all I believe all (good) stores are – and have always been – “experiential.” In fact, supermarkets began as purely experiential retailing, only moving away from that a bit in the 1970s, and making a gradual return for the past 30 years or so. If by “experiential” you mean things like sit-down dining, demonstrations, cooking schools, etc. the answer is a guarded yes, assuming we ever get past COVID-19. Publix is, and has always been, an excellent retailer. I see no reason to assume they haven’t thought the new format out as completely as possible.
Several of our Lunds&Byerly’s markets here in the Twin Cities have been doing this successfully since the 1970s, and the cumulative experiences of shoppers has served to ingrain the chain into our city’s food culture — and blunt the entrance of Whole Foods. Of course, Lunds drew upon the wisdom of Red Owl who’d been using this strategy from the 1930s. If you want visionary ideas for your grocery chain, just visit us in Minnesota where we worked it all out nearly a century ago!
I believe it’s always a smart business planning to improve Customer Experience. After all, what else is going to drive customers into a physical store? Many grocery locations have gone dark during the pandemic to keep up with online orders. However, once the pandemic ends, they will need to catch up with their in-store appeal.
Also, now would be a great time to invest in upgrades while labour is available. Once the virus finally leaves us, I feel there will be a high demand for construction services.
I’ve been to many two-level grocery stores. Instead of just going to pick up some staples, you tend to end up spending much more time in-store and leaving with much more as well, both in your stomach and in your cart!
Great insight, Publix! I think your timing is perfect.
Retailers have to embrace experimentation, consumers like to see new and different, and today’s winning formula will be tomorrow’s footnote. Failing is part of this process, which is hard for some to accept. To quote Edison: Never get discouraged if you fail. Learn from it, keep trying.
Too many retailers think innovation is to focus on just squeezing cost and efficiencies out of existing processes and methods, vs. finding what’s next.
Wow! This flies in the face of the typical trend that we’re overstored in the US with too many stores and too much square footage per store. As a concept store, this is a great move by Publix to begin looking at the dining experience and far more than just the typical shopping. Other grocers like Wegmans have been expanding store space for some time now.
The question I have is this, is this an about-face for retail, specifically groceries in catering to customers? The new space lends itself well to expanding shopping space in the store and making environments safer for at least 6-9 months while US shoppers are vaccinated, plus making it easier to navigate the store. The front staging area for online is perfect for pickup and the Instacart shoppers buying on others behalf. These are all smart moves by Publix. Can’t wait to see how it turns out.
The “old norm” supermarket has been solidified for decades, but in the past three years profound changes in the marketplace have begun to accelerate. Publix, the epitome of the conventional store, has recognized this, and has put together some ideas to effect change in accordance with market shifts. Deli island, no self-serve, drive-thru pharmacy, and most importantly front-of-store online staging area and outside online order pickup area are all ideas that will help Publix stay relevant.
I was a bit taken back by the poll takers’ (seeming) enthusiasm, but I guess the issue is what is meant by “move on.” Planning? Certainly. Building? Probably. (Actually) opening? Uhmmmm….
Longer term, I’m leaning more toward the “only as flagship” option. It’s no mystery that grocery has long been moving toward fewer but larger stores, but I think only a few areas will be able to go that extra step to “dining area(s) upstairs” and whatever other bells and whistles one might envision. The planning for expanded online servicing — whether space for curbside or “assembly areas” for orders — will probably be provided for stores of all sizes, but the amount of space required is unclear (no, I’m still unconvinced it’s going to be a large share for this industry … at least in my lifetime).
I applaud the two-story concept by Publix. It may be the vanguard of the New Normal in store design in the post-COVID era. I have toured a few two-story supermarkets in Europe and the division of departments seems to work well. Shoppers take an escalator down and up.
If Whole Foods can have 2-stories then why can’t Publix? If Kroger can have a restaurant then why can’t Publix have a dinning area? What else can be done with a product assortment and customer satisfaction as celebrated as Publix? Despite the novel fanfare around making shopping entertaining, Publix customers practically invented this convergence between grocery shopping and entertainment with their well know date-nights at Publix. Finally, a fancier store with a dining area will just make official what Publix customers have been doing all along. Great way to build on customer insights.
Publix already had a multi story store in mid-Pinellas County. This was in place long before COVID. I personally do not like the concept at all. It is built in the middle of a small shopping strip block. All parking is in the back and competes with customers of other stores. Taking carts up and down elevators is awkward and a time waster. If you are actually shopping for groceries and have any cold or frozen items purchased they aren’t going to be by the time you get checked out, wait your turn for an elevator, get down to your car, load it , navigate the minuscule parking lot (full of carts no one wanted to return) without getting your car dinged or damaged and get back out onto the heavily traveled road that fronts the store (with inadequate traffic signals).
I will continue to use the small community Publix with a dedicated parking lot and staff that is helpful, recognizes me and I don’t have to use an elevator to visit.
Publix was just ranked #3 in the nation for “best workplaces in retail,” and they often rank #1 in customer service. Ehen “people power” is in your DNA, it seems natural and logical that deli hospitality is part of your customer’s in store experience. It matters that your organization has extraordinary “people skills.”