Editors Note: Karaoke Retailing

By  Joe Skorupa, Group Editor-in-Chief — July 27, 2006

Retailers are good mimics. If a new store is taking off like a rocket, you can bet copycats are hard at work determining the cheapest and easiest way to rip it off. Uh, I mean, they have begun a sophisticated reverse engineering effort to give it a fresh, new spin.

Office Depot and Office MaxDollar Store and Dollar GeneralWal-Mart and Kmart. Examples like this are endless. And, if you scratch the surface, youll find the copying impulse extends to store concepts, assortment schemes, product lines, pricing, promotions and just about every successful business process and store procedure in retailing.

No segment of retailing is guiltier of this impulse than grocery, where national chains have homogenized stores to the point of commoditization. Dr. Kjell Nordstrom, a business consultant who spoke at the recent Marketechnics show, called this trend karaoke capitalism. Since RIS is focused on one specific industry, Ill call it karaoke retailing.

The problem with this approach is that it misses the point of what makes a breakthrough retailing concept work in the first place consumer-driven response (analyzing shopper signals) combined with outstanding multi-channel execution. Essentially, this means delighting customers by giving them what they want while exceeding expectations in the shopping experience.

How can grocers, the most distressed segment in retailing, accomplish this without being copycats? Whole Foods and Trader Joes have figured it out, as have regional supermarkets from HEB to Wegmans to Andronicos and others. Its not impossible, its just difficult, and the temptation is strong to take the easy way out through karaoke retailing.

Its important to realize that customer-driven retailing does not simply create a successful store, it creates something far more valuable a profitable, long-term business model that cant easily be copied.

Consider the Apple iPod by way of a parallel example. There were many MP3 players on the market before it arrived and many have appeared since it was introduced. If it were just a product, copycats would have stolen its market share long ago. But the Apple iPod is more than a product. It is a business model that has sold 40 million units since it was introduced, 500 million iTune downloads since July 2005, and one million QuickTime video downloads in just 19 days in October 2005.

Merchants should focus energies on creating their own iPod concept. Karaoke is for happy hour, not retailing.


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