One advantage of being in this business is being exposed to what’s hot and what’s happening. Much of our exposure is a result of spending a lot of time “at retail.” This schlepping around springs from one of our closely held beliefs that there are no such things as profitable products, just profitable customers. So we hang out where the consumers are to watch ’em vote.
Well, just when we think we’ve seen and heard it all, we’re often shocked and surprised by some new learning. Here’s one for all of you – free of charge!
Just to add to the suspense, let’s look briefly and superficially at retailing history. First there was “Relationship Selling” (the butcher, baker, candle stick maker). Then came “Let’s Make A Deal Selling,” where the offer was more important than the offering. Next up: “Category Management,” in which everyone pored over data points in order to divine the wisdom of the marketplace. Sandwiched somewhere in between was “Efficient Consumer Response,” or ECR.
Today, of course, we’re in the midst of “Solution Selling.” This apparently means delivering what consumers want, where they want it, at the right price, conveniently. Sort of a we’ve-done-your-thinking-for-you kind of thing. But Solution Selling is already giving way to The Next Big Thing: “Retail Shopping Chaos.” RSC is so new, we haven’t even trademarked it yet.
RSC is just as complex as Category Management. It requires multiple constituencies and a focused set of priorities by retailer and manufacturer. The more analysis done to support RSC, the better. Bring on the templates, charts, regressions, poisson distributions, and Neilsen/IRI rationalizations.
Here’s how Retail Shopping Chaos works. First, retailers and manufacturers work together to hide products all over the store. What’s purchased most often? Milk and eggs, you say? Put them in the very back corner of the store. That’s the spirit!
Big gaping holes on shelf are the second major element of RSC. The goal is to INCREASE out-of-stocks. Make sure you mis-stock products so that the brands and sizes don’t correspond with the shelf tags. Pricing is also critical. Swing prices wildly, the bigger the swings, the better. Cut prices dramatically (89-cent 2-liter sodas), then take them back up.
The more unreasonable the better.
To move to a more sophisticated execution of RSC, you have to put stuff out on display purely based on the manufacturers’ deal, NOT on shoppers’ needs. And, on those big displays, make sure the consumer promotion offer is missing or obstructed. At least ensure that the stuff on display has a very low turn rate. I’m thinking permanent displays of cayenne pepper and spray starch.
The Rubik Planogram RSC also mandates that you rearrange the order of your aisles at least once a year. Think of a store’s layout as a giant Rubik’s cube that you just can’t stop fiddling with. Odds are, a retailer’s most loyal (i.e., most profitable) customers will keep coming back until they figure out how to get around your store again. They love the element of surprise! As soon as store managers start to see a look of confidence and comfort return to their faces, they’ll know it’s time to twist the old cube and screw with their heads again.
Once the merchandising is sufficiently chaotic, it’s time to think about marketing programs. Chaotic consistency points to a loyalty marketing program based on the old scavenger hunt model. If stores have done a good job hiding products, it’s a natural to build on the chaos by inviting shoppers to hunt-and-peck for special discounts.
Staffing is, of course, critical to successful RSC. Manufacturers need to staff up with folks who have no clue about brand strategy and objectives. Retailers, the same. Companies are full of folks who don’t know why consumers do what they do. Find some and put ’em in the front lines!
And the good news about RSC is that it appeals to all retailers. From the smallest IGAs up to the biggest Big Kmarts, there’s room in this trend for everyone. You don’t need VMI, JIT, UCC, or EDI to make this work (though some would argue that they help enable RSC). You just need to get screwed up and stay that way.
Chaos waits for no one, apparently. Industry sources tell us that McKinsey & Company is about to publish a report on the rise of RSC. We have also learned that the good folks at Coca-Cola are frantically preparing a secret industry study on the subject.
In a related development, rumors that I have been invited to be FMI’s keynote speaker on RSC at their annual meeting next May are greatly exaggerated. It simply will not be possible for me to finish the necessary research and analysis before the laws of RSC catapult the industry in an entirely new direction.