Retail's Ecosystem

The store, as a medium, represents a complex environment - an ecosystem, if you will, laced with competition, cooperation and evolution. And like many ecosystems, the store is evolving rapidly.

Taking an ecological approach to the store as a medium is extremely useful. Consider: there are thousands of elements - i.e., products, navigational signage, format, layout, departments, aisles, shelf organization, displays, digital signage, interactive kiosks, etc. - all sharing the same habitat. In short, there are hundreds of communications vying for the shopper's attention.

The Shopper = The Audience

The shopper is the audience for the retail medium. And she (or he), prompted by the recession, has been altering her behavior lately - consolidating shopping trips, more carefully planning stock-up trips, and shifting to value retailers. Moreover, research from TNS Retail Forward's ShopperScape Panel suggests, for example, that Wal-Mart has been experiencing growth in upper-income shoppers. So both the shopping dynamics and shopper composition are changing for many retailers.



The shopper's goals, her role, and the kinds of information she is likely to be receptive to, vary greatly by the type of shopping trip. If she is making a quick, fill-in trip to get things for dinner, she's a very focused shopper, but open to meal solutions. During a stock-up trip, she's a shopper making many purchases (usually as many as 20 or more); therefore, she has a great many things to focus on.

Also, during the course of a stock-up trip, the shopper may take on a number of different roles. Picture her as value guru and global citizen, and perhaps more of an investor when shopping for laundry and household cleaning supplies. But when shopping for food, she is more focused on what her family will eat, what's nutritional, what's affordable. Or she may be playing the role of heroine, looking for the right treat for her children, who just passed their math tests with flying colors.

Today's shoppers exhibit different levels of involvement throughout the store, different balances of needs and wants, different views of value, etc. Indeed, tied to all of the re-evaluations taking place as a result of the recession, shoppers have reclassified categories or parts of the store - e.g., from "need" to "non-essential" item.

And from much of the work of Herb Sorensen's TNS, we know that shoppers behave differently in different parts of the store, shopping more quickly near the end of their trip, for example. This behavior also has an impact on the ways she can and wants to be communicated with.

The Store = The Medium

The store represents another layer in our ecosystem analysis. Retailers are trying to establish their own brand and create a unique shopping experience for their shoppers. In reality today, in-store communications can vary across stores, even for the same brand, depending on the nature of the shopping experience the retailer is trying to create.

Safeway's Life Stores and "Ingredients for Life" campaigns are driven by such diverse elements as store layout, ambience, category organization, or store brands (i.e., O for Organics or Eating Right). Wal-Mart's "Save more, live better" shapes the store as well as the way in which communications can be delivered in the store.

Most retailers today have developed detailed specifications for in-store communications. Merchandising, signage and display guides and guidelines are well established among the major stores. Many have gone a step further and developed their own media vehicles (e.g., Target's Red Channel, Wal-Mart's Smart Network, Kroger's dunnhumby shopper program, etc.) which are often the preferred vehicles because they are very consistent with what the retailer is trying to achieve in-store.

Increasingly (especially during the current recession as so many try to position themselves as a value destination), retailers are taking control of their stores with these very well-defined specifications, limitations, and preferences. Their brands serve as a filter or a voice ... through which marketers must learn to work.

The Message = The Content

Finally, the in-store content or messages themselves are also changing. Right now, for example, the way in which retailers are talking about value is undergoing a radical makeover as they try to establish themselves as value destinations. Compared to the period just prior to the recession, price and private labels are getting much, much more attention. As are new ways of expressing value (e.g., Wal-Mart's "Gametime" with its focus on at-home socialization and entertainment, or Target's "New Movie Night," or Walgreens' "Affordable Essentials" campaign).

One last area where retailers are increasingly focusing their efforts is multi-channel. As retailers begin to realize the impact of online (e.g., Forrester estimates 24% of offline sales are driven by online; site-to-store produces incremental sales at the time of pick-up; and Wal-Mart has seen a correlation between online customer product ratings and sales, etc.), major retailers are working to ensure the online-offline experience is a consistent manifestation of their brand.

Evolving environment

The store is arguably one of the most complex media. As marketers develop their plans, it is vitally important to understand how the retail medium is evolving in order to better leverage it. The ability to reach shoppers at the right point in the shopping trip, with the right message, provides a powerful means for influencing purchase decisions ... which, thanks to our harrowing economy, promise to be more carefully determined and better managed and than ever before.

1 comment about "Retail's Ecosystem ".
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  1. Arleen Geller from Geller Consultants, April 20, 2009 at 9:59 a.m.

    Great article, I llike the way you postioned this retail ecosytem. I was wondering why you didn't mention In-Store audio which is one of the platforms to reach this changing "shopper". We know how effective this is in reaching the shopper, along with the other merchandising opportunties that occurr within the store.
    Thanks for supporting how important In-Store marketing is in today's value conscience society.

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