Best Buy’s shopping experience is the worst

Just yesterday I was reminded — once again — that Best Buy is one of the most flawed stores in the retail market. Not to mention, one of my least favorite.

Which is a terrible shame because I am about the biggest tech geek around and, if the shopping experience wasn’t so annoying, I would frequent it much more. As it is, Best Buy just doesn’t understand what its customers want — to explore and not to be constantly “sold to.”

Best Buy
Best Buy is one annoying store.

It would be nice if, for once, I could visit the only electronic store in my hometown and not be haggled to join the Rewards Program or to get insurance on an item that cost $20. Really, is that too much to ask?

In fact, you can’t even check out from the registers without being ensnared in some type of Best Buy hoopla.

Best Buy tricks you.

On my way home from work yesterday, I stopped by Best Buy for a new phone case. I found one I liked and, what’s more, I managed to avoid three or four floor workers wanting to help me. One of my few wins at the store.

But that all tanked when I went to pay for my case. The gent in front of me took about five minutes to check out. What’s more, he complained to the cashier about needing to fill out his e-mail address and that he just wanted to get his “batteries”and go.

Next was my turn to pay. Immediately I understood why the guy in front of me was annoyed. There was screen after screen displayed on the credit card reader. Options were pre-selected for me, which I rushed through because there was a line of people behind me. I left with my case, which should have made me happy, but I was dissatisfied with my shopping experience and felt duped by the system.

I am not alone in thinking that Best Buy has very annoying practices. So annoying that it has turned me off as a customer.

The process has overtaken the experience at Best Buy. Until that gets fixed, it’s lost this gear hound for good.

How To Beat Wal-Mart Without Going Broke

Beat WalMart Everyday

By Tom Dougherty

break out and beat WalmartThe Holy Grail in retailing is, of course, how to take market share from the biggest retailer of them all: Wal-Mart. Hundreds of billions of dollars in yearly revenue, more than five times as much as the nearest retailer. Continued growth in both revenue and earnings. Wal-Mart is king.

Meanwhile, retailers like Home Depot, Lowes, Sears, Macy’s and J.C. Penney continue to bleed money, and even direct competitors such as Target continue to lag behind.

How do you beat that? How do you beat the Market Leader?

The first thing all retailers should do is stop copying Wal-Mart. If you copy Wal-Mart, that only helps Wal-Mart. If you market on price, you will lose. Wal-Mart wins that every time.

beat WalmartMany retailers are doing just that, though, which is one reason why Kmart, once a formidable competitor, is practically a non-entity right now.

That doesn’t even take into account Wal-Mart doing a better job of marketing price than everybody else. It has a new, brighter and more sophisticated look with a theme (“Save Money. Live Better.”) that allows those of us who once thumbed our noses at Wal-Mart to go there. “Living better” is a very attractive outlook these days, and it shows that I’m smart for choosing them.

What Some Say

So when Kmart says, “There’s smart, and there’s Kmart smart,” it attempts to hold the same position as Wal-Mart – and not as well. What seems smarter to you? To “Live better” or be “Kmart smart”?

beat WalmartKmart, of course, is an easy target. (No pun intended.) Target is Wal-Mart’s nearest direct competitor. However, despite holding that position since the mid-80s, it has yet to make much of a dent in Wal-Mart’s fast-driving engine.

Target’s revenue has basically flattened and no wonder. It often fights on price. “Great electronics at surprisingly great prices” said one recent spot. So it’s no wonder that many news outlets reported that Wal-Mart took a lion’s share of the flat-screen television purchases over Christmas, stealing Target customers in the process. So, how effective was “at surprisingly great prices”?

Target promises “Expect More. Pay less.”, a theme eerily similar to Wal-Mart’s promise. The “Expect More,” and the sophisticated and trendy nature of Target’s advertising, suggest that you will get a better in-store experience at Target.

Target Does Not Have The Answer in beating Wal-Mart so don’t Copy Target

But have you been in a Target store lately? They seem stale and bizarrely empty now, less important compared to the bustling, almost overstuffed, nature of Wal-Mart. Target has even tried to copy Wal-Mart right down to sporting grocery departments: Tiny, little grocery departments with practically the same goods as Wal-Mart, but not nearly the range of selection.

beat WalmartIf you don’t copy Wal-Mart, then what should you do? Are there inherent weaknesses in being a market leader? For one thing, you must uncover what is most important to your target audience. That means understanding more than just what goods and merchandise they want to buy. It means understanding what drives them so they can see themselves in the brand and covet being a part of it. (Hello, Apple Store!) It means finding the most intense emotion in the market and owning it.

A Lost History of a Weakness in a Market Leader

There are retailers, for example, that had that kind of emotional preference but lost it by copying Wal-Mart. (See Rule #1.) Sears was once a giant, owning its own position as a man’s place for appliances and other equipment. Now, its theme, “Life Well Spent,” is a carbon copy of Wal-Mart’s winner.

beat Walmart

Sears or any other retail brand that has lost its once-proud luster (RadioShack, Foot Locker, Gap) would regain their position if they’d embrace change and dig deeper into today’s consumer than simply understanding usage and attitudes.

It’s time for retailers to start embracing change and think about transforming its model because, right now, everyone looks and feels and acts the same from the perspective of the consumer. (Read our blog on discounting.) In department stores, for examples, the differences between Macy’s, Dillard’s, Kohl’s, JC Penney and Belk are paper-thin. How can a consumer choose among them?

Even the specialties copy each other. Office Depot vs. Office Max vs. Staples. The same. Family Dollar vs. Dollar Store vs. Dollar Tree. The same. Advance Auto Parts vs. AutoZone. The same. Petsmart vs. PETCO. The same.

It’s insane.

Wake Up. You Can Win. You Can Beat WalMart

Retailers are expecting to win by being exactly the same and those chasing Wal-Mart are trying to duplicate its model and messaging without the buying muscle.

The lesson is that if you want to beat Wal-Mart, stop trying to be Wal-Mart. If you want to beat the leader in your category, stop trying to be them.

It’s no wonder that the ones gobbling up market share – GameStop or Wegmans, for example – are the ones most different from their competition, both in model and messaging. That’s living better.

(Read our market study of the retail category here)

Supermarkets are in Trouble

Why Don’t Supermarkets Have Brands?

By Tom Dougherty

A maze. Branding a supermarketIt may come as a surprise to the category of supermarket chains to learn that almost to a fault, none of them owns a brand. They think they do, but they do not. The proof, as they say, is in the pudding. That is why we have so much consolidation in the supermarket category. Branding a supermarket must be difficult business as so few get it right.

The only reason to invest in the building and maintaining of a brand is to increase your preference or increase your margins. Against that acid test, supermarket chains come up sucking hind teat. There are a few major exceptions, and we will disclose them as we proceed, but the battle for supremacy in the supermarket gambit has come down to location, location, location.

Look around at your own neighborhoods and you will quickly see the reality of the situation. Supermarkets, like their poor stepsisters the pharmacy chains, are in a rush to build more and more stores. They realize that in order to dominate a local market, they need to be the closest purveyor to the shopper’s home. That is not exactly the pure definition of a brand is it?

The Supermarket Business Model Tells the Story

They recognize this fact in their bones which is why their business model has them scampering to build new stores as close as possible to developing residential areas. Yet, they pretend to themselves (and their stockholders) that they have a brand. To Harris Teeter, Kroger (which just acquired Harris Teeter as supermarket consolidation continues), ACME Markets, Lowes Foods, A&P, Pathmark, PUBLIX, GIANT, Win-Dixie and the Piggly Wigglies of the word I have a short and pointed warning… Watch Out! Wegmans is coming!

harris teeter Branding a supermarketHarris Teeter (recently ought by Kroger), for example, believes they have a brand. They believe they are “the upscale choice” but deep down they recognize the fallacy in that claim as they build more and more stores in more and more neighborhoods. They realize that their brand is not a destination, and that aside from the “brand” of habit, shoppers will not ride by a competitor’s store on a regular basis to shop at a Harris Teeter. They know that their store does not represent a “destination” — there is no sense of arrival, no sense of specialness and therefore no REAL brand.

Wegmans is a Juggernaut

Branding a supermarket is what Wegmans doesWhat makes Wegmans so formidable? They learned their brand lessons well and when branding a supermarket are playing brand hardball. Borrowing on the specialty marketers like Whole Foods, Fresh Market and Bread & Circus, and the upscale brands of Four Seasons and Ritz Carleton, they recognized that brands that differentiated the customer enabled these brands to become destinations.

Branding a supermarket as an experience and entertainmentThey became a magnet for those seeking specialness, specialty, high quality foods, and experience — within a geographic area. When the shopper believed they were a more discriminating shopper (what we call a Brand face), these shoppers were willing to inconvenience themselves by traveling a greater distance to satiate that self-identifying need.

They would also be willing to pay higher costs for that same self-identification. Remember that brand, the kind of brand that makes a category player a destination, is not a description of the store, it is the self-description of the customer — who they believe they are. The greater the store’s ability to satiate that self-description, the more powerful the brand. Does the Harris Teeter or Publix shopper believe they “have arrived” when they shop?

Do they see themselves as smarter, mores discerning and erudite? Not according to Harris Teeter or they would not need to build a new market every 1.8 miles! Wegmans HAS a supermarket brand.

Look More Closely

Wegmans took the lessons from Fresh Market and Starbucks and recognized that the modern grocery shopper wanted to have an experience when they shopped. They believed that shoppers wanted to have access to and be surrounded by “the world of fine choices” even when they were simply shopping for Campbell’s Soup.

Whole foods has an idea when Branding a supermarketThe baby boomers, Gen-x and Gen-y customers believe the shopping experience should be as entertaining as utilitarian and that the yearning for discovery was woven into the fabric of their being. Does it cost more to create a Wegmans than it does a Lowes Foods? You bet it does. It requires an investment in brand, brand management, architecture, interior design, customer anthropology, and world-class buyers.

However, these costs are dwarfed by the short-term solution of the escalating construction costs of duplicating sores in repeated markets within saturated residential areas.

The Supermarket Category’s Problem

Why then, is the supermarket category so stale and delinquent in its own space? It is not because they lack talented people or smart planners. It is because they have bought into an old and stale idea of brand. They have come to believe that they can differentiate themselves from the competitive set by restating generic category descriptions like fresh, quality, selection and fair prices. They think they can OWN a position that is the providence of the entire category… like, “the beef people.”

Where is the Future?

What does this mean for the future of the category? It means the stakes are being raised because the category is demanding more. The real problem for the major players can be found in the existing store space. The sooner they invest in their brands, the better for their shareholders because an investment in today will ultimately cost less than a forced investment tomorrow. Experience and discovery has as its table stakes; larger more open square footage, broader specialty departments, and an understanding of the preceptive fabric of the target audience.

Supermarket brand desertThis means existing store locations may be inadequate in the future. Bigger is not necessarily better, it is only better when bigger incorporates entertainment, discovery and experience. These are the hallmark of the busy and demanding shopper of today, as well as the shopper of tomorrow. Will a Starbucks coffee bar differentiate your brand? Not on your life.

Instead of adding a Starbucks coffee bar to your offering, ask yourself why the customer wants such an addition? Who that shopper believes they are and what other offerings might satisfy those beliefs. The answer to these questions might lead the chains to build Wegmans copies.

However, without the brand knowledge and management of a Wegmans, they will simply seem like artifice and be nothing more than pretenders to the throne. Wegmans has brand permission and that permission should spell fear in the souls of other chains and even the specialty retailers like Dean & DeLuca, Whole Foods, and Fresh Market.

Read about the retail space here

Read about Pharmacies here

Verizon’s new store design gets it right

Verizon Wireless has unveiled a new store at the Mall of Americas in Minneapolis that intrigues me – especially as retailers remain in a funk in terms of store design.

As reported by Chain Store Age, the more than 9,000-square foot space features interactive areas organized by process, such as active sports, gaming, home monitoring, music and business.

VERIZON WIRELESS MALL OF AMERICAThe reason I like this layout is because it is about how the customer uses the technology, not by the technology itself. And, as most of you know, the first rule of brand is that it is all about the self-identification of the customer, not the identification of the brand.

Just about every retailer categorizes its store areas by a collection of same products. Even the Apple Store does that. But, even if you are in a grocery store you frequent, it can still create confusion. (Why, oh why, are the nuts next to juices in my local supermarket?) Mainly, it creates little to no interaction with the brand. It’s like looking into a pantry, trying to find the hamburger buns. (“Honey, they’re right behind the cereal.”)

Interactivity is the catchphrase of store design these days and most get it wrong. That’s because the design is all about the store, not the way a consumer would use it. It’s no reflection of us.

Verizon is understanding that what makes it relevant and, for some, preferred is not the technology itself. It’s what need the technology fulfills. That will enable Verizon to offer a whole host of technologies, without falling into a trap the Radio Shacks of the world are in. If a technology, for example, fits into a business lifestyle, Verizon can offer it. If it fits into an active lifestyle, Verizon can offer it. And so on.

Nice.