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Mar_08_cover

Anything, Anytime, Anywhere
And other Trends in Retail

by Ellen Gooch

To me a mall is a bit like hell: easy to get into but nearly impossible to leave.  Elevators are hard to find.  Neighboring escalators never go in the same direction.  And the hallways wind, to borrow a phrase from T.S. Eliot, like tedious arguments of insidious intent.  The intent being to keep you there and shopping until the End of Time, or until union-mandated closing hours, whichever comes first.
The mall is a dying breed in the US; it is a trend that has come and gone, now being replaced by a new entity that mixes offices, apartments, stores, restaurants and leisure venues like cinemas and gyms in one connected area.  So imagine my surprise when a classic, circa-1985 mall ??" complete with that paragon of American tackiness, a Hooters! ??" opened to general approval and acclaim in downtown Athens.  Let??Ts do the time warp, indeed.
Prediction, Niels Bohr once said, is very difficult ??" especially if it??Ts about the future.  Yet Greek retailers have an advantage over atomic physicists when it comes to divination.  The Greek retailer knows, generally speaking, that it is just a matter of time before many major worldwide consumer trends reach the shores of Greece.  The questions are, which trends and when?

Apologies to Ms. Bardot
I know.  Anything, anytime, anywhere sounds like a come-on line (albeit one unlikely to be heard from Ms. Bardot). But giving people what they want is sexy, and as we all know: sex sells.   People today work longer and sleep less; convenience is no longer a luxury but instead a necessity.  A certain set of retailers in my home town, New York, have long catered to this trend.  We call these ???Korean Delis??? whether or not Koreans actually own them.  They can be found on every other street corner, operate 24/7 and carry every imaginable product from tahini to tacos.  The rest of America is now catching up to our sleep-deprived lifestyle and retailers such as Wal-Mart and assorted supermarket chains are offering 24 hour stores to meet their demands.
What is interesting about Wal-Mart and assorted supermarkets is not just the anytime aspect, but the anything aspect.  Wal-Mart traditionally carried little in the way of perishable foods, focusing instead on dry goods, electronics, books and the like.  This changed in the mid 1980??Ts with the introduction of Wal-Mart subsidiary, Sam??Ts Club.  Sam??Ts Club, named after Wal-Mart founder Sam Walton, is a membership-based discounter.  Customers pay a fee to enter a warehouse where they select items directly from distributor palettes.  Around the same time, Wal-Mart introduced the superstore concept ??" stores that offered everything from a hair salon to a tire change.  From these bulkheads, Wal-Mart began to expand its grocery line.  By 1999, Wal-Mart was the fifth largest supermarket chain in America with $6 Billion in sales.  Today it is the largest grocery chain in America.  Except it isn??Tt just the largest grocery chain in America, because it doesn??Tt just sell groceries -- it sells anything.  Because of Wal-Mart??Ts give-them-everything approach, other grocery chains were forced to attempt to compete.  Supermarkets in the US today can??Tt survive on bread alone, they have to sell video games and trash compactors as well.
This brings us a subsidiary idea of the anything, anytime, anywhere concept: the blurring of lines in the retail sector.  Cafe??Ts used to be just for coffee, but now you can buy a latte and a CD from the same register, even here in Greece.  Starbucks has offered this feature for years, and now so does the new electronics/book/cd/dvd retailer Public on Syntagma Square.  In New York, my favorite chocolate store now has its own (mostly brown) clothing line. 
Always-open, exceptionally well-stocked, brick and mortar storefronts are only one aspect of the anything, anytime, anywhere trend.  Also of great importance ??" with an emphasis on anywhere ??" is the rise of internet shopping.  In this case, anywhere is your home.  In the US, Internet grocery shopping is expected to generate $6.5 Billion in sales by 2008, according to Jupiter Research.  True, this represents a measly 1% of the overall US grocery market, but it??Ts a sector that is increasing roughly 30% a year.  Leaders in this industry include not only internet-only retailers like New York-based Fresh Direct, but larger chains like Safeway and, as of October of 2007, Wal-Mart as well.  The problem with internet grocery shopping is how a store can deliver perishable items before they, well, perish.  Brick and mortar shops with good distribution networks and warehouse facilities near to intended delivery sites have an advantage here.  Fresh Direct is one of the few internet-only stores that shares this advantage due to the density of the population they serve.  Amazon.com has also gotten into the act.  They now stock 22,000 food items for the US market and have recently launched a pilot program in suburban Seattle that offers perishable items like meat and dairy products.
Internet grocery shopping is doing even better in the EU.  Food and Drink Europe, citing research by Mintel, projects that this sector is likely to grow 186 percent by 2010 to about 76 billion Euros.  The UK, serviced by retail behemoth Tesco, leads, followed by Germany.  It should be noted that both countries have access to excellent broadband services.

Never on Sunday
Even if Greek consumers had a demand for anything, anytime, anywhere, Greek retailers might have difficulty meeting it.  Shopping hours are defined by government degree.  The last time the issue of extending shopping hours was revisited, it was the shop owners themselves that chose to keep hours as they are ??" for good reason: overtime pay.  As for Sunday, well, who has time to shop after all those hours spent in church? In addition, to a certain degree, stores are prohibited from selling items that are the mainstay of other stores.  A pharmacy is a pharmacy and a bakery is a bakery and that??Ts that. 
But what if there were ways around these laws?  What if there is at least one retailer that already found a way around these laws?
Take, for example, Amazon.co.uk.  I love these guys.  In the last few months I have ordered, for delivery here in Greece, books (of course), gardening tools, toys, DVDs, CDs, shampoo, a sweater, a pair of slippers and a Le Creuset 4 Piece 3-Ply Stainless Steel Cookware Set.  Tell me one store where I can buy all that in Greece?
The laws governing Greek stores are for Greek storefronts of the brick and mortar variety.  Nothing stops a Greek company from setting up an e-storefront like Amazon that operates 24/7, except for the fact that distribution would be a nightmare and the cost would be astronomical.  But what about setting up e-storefronts for existing retailers?  Consumers could then purchase what they like when they like from what the retailer has on offer and then elect either to pick it up (where it will be waiting, already packaged to go) or to have it delivered for an additional fee.  And if such a retailer was willing to go that far, why not just a bit further?
Taxi drivers are not prohibited from working late hours or on Sundays.  What stops a supermarket from offering home delivery of food items on a Sunday (for a fee)?  The store isn??Tt open and is therefore not violating the law.  What is open is the store??Ts internet portal that allows customers to choose what items they want delivered.  A store employee (even one working on a Sunday on overtime) can fulfill the order and hand it over to the waiting taxi.  True, this is technically illegal: taxis are not supposed to make deliveries.  But illegal or not, they already do so and even have a codified neighborhood-to-neighborhood price list for this service. 
Alternately, if having even one employee working in completely locked and darkened store constitutes a violation of the law, orders for Sunday delivery could be taken before 4PM on Saturday, fulfilled by the legally working staff and placed in a refrigerated storage unit from whence the taxi driver (or other delivery service) could retrieve it and deliver it the next day.  There may be an additional advantage to using a taxi service as a delivery agent.  A retailer that set-up a delivery contract with a taxi company might also be able to negotiate a bit of advertising as well.  Amazon??Ts orders come in Amazon boxes.  Fresh Direct delivers its food from Fresh Direct trucks.  Taxis that deliver a Greek retailer??Ts groceries could proclaim that fact on its signage.
Here??Ts another idea.  There is one category of store that can operate 24/7: the Kiosk.  Kiosks can only, according to the law, sell newspapers, tobacco products, chocolate, chewing gum, hygiene products and, naturally, shoelaces.  They may not sell sodas, juice, yoghurt, milk, ice cream, batteries, playing cards, phone cards or anything else.   But let??Ts just pretend they could.  Now, kiosks are all individually owned, ostensibly by handicapped people (a law recently passed to extend this definition, but there are as of yet no details.  I wouldn??Tt be surprised if it went so far as to include people who bloodied their nose in a schoolyard dispute).  Many are branded, so that you see a kiosk advertising Dunhill or Marlboro or whatever.  Why not create a new distribution service that provides kiosks with all those illegal products they don??Tt already sell plus a few new ones, like eggs, butter and lettuce and have those kiosks that subscribe to your distribution network brand themselves as such?  In short, these kiosks would be more like 24 hour mini-marts that tobacco shops.  Customers would be able to identify these super kiosks by their branding.  And it is just a short step from what they already are today.
I know nothing is ever simple in Greece, especially for anyone trying to make a buck (at least legally) and no doubt these ideas are outlandish and reflect my American naivete.  That said, there are several other emerging trends that might be (eventually) less difficult to implement.

Goodbye Guilt
What do Wal-Mart, Disney and Nike all have in common?  Many of their products are manufactured in sweatshops, often by children.  This is a big turn-off to consumers.  Hence you have clothing and other products marketed as sweat-shop free.  Thanks to new technology, like Radio Frequency Identification Devices (see next section), customers will soon be able to scan products in supermarket aisles to determine how ethical they are.  Consumers are already doing this in Japan.  Brands like Body Shop and Aveda that proclaim their kindness to the environment, animals and people will continue to gain market share.
Another aspect of the guilt-free trend has to do with environmentally friendly practices.  Consumers in the States are now obsessed with something called food miles ??" the number of miles, say, a rib roast had to travel to reach your plate.  The fewer miles, the better.  Never mind that one airplane trip would pretty much wipe out any carbon footprint offset benefit delivered by eating a locally-grown rib roast, the point is at least your doing something.  Ditto recycled toilet paper and biodegradable shampoo.

Radio Frequency Identification Devices
RFIDs are tiny microchips with tiny antenna that are slated to replace barcodes.  They can be used to remotely manage inventory, stop theft and deliver promotional or other messages when the customer picks up the product.  In the future, an RFID reader would be able to quickly scan your cart at check-out.  A chip in your mobile phone, keyed to your ATM card, might then be able to settle your bill for you.  No more lines!

Rich or Poor
The middle class is becoming an endangered species.  Paul Krugman of the New York Times calls the times we are living in the New Guilded Age, where the rich are super rich and everyone else is just plain poor.  In such a world, a retailer must choose between providing cheap or luxury products with little in-between.

Pop-Up Retail
When Target wanted to showcase its new clothing line by the designer Isaac Mizrahi, it opened a temporary 1500 sq. feet store in Manhattan??Ts Rockefeller Center.   This store was open for less than two months.  This is the essence of Pop-Up Retail: a venue opened for a limited time offering limited edition, hard-to-find items.  Campers tried this concept in Athens ??" except for one thing: they forgot to close.  Some of these pop-up stores operate like exclusive, red-roped clubs.  Only insiders are informed about when they will open and what they will offer.  Another rift on this theme is London??Ts Fashion Bus, a continuously touring vehicle stuffed with ???cool??? clothing.

In-Store Media
Forget TV and other traditional advertising media.  Savvy companies are trying to reach consumers while there are in the act of consuming ??" in the stores themselves.  As reported by the Wall Street Journal, on September 7, 2007, CBS paid $71.5 million for a company called SignStory (now called CBS Outernet) which operates video monitors in 1,400 US supermarkets, like Albertsons and Pathmark.  NBC has followed suit, recently announcing partnerships with IdeaCast, which has TV screens in 900 health clubs, and The University Network, which is on 181 college campuses.   These network broadcasting giants see the potential for programming ??" and targeted advertising ??" tweaked to the interests of specific categories of shoppers.  
It is easy to understand this potential.  According to a report by Deloitte Consulting prepared for the Grocery Manufacturer??Ts of America, the overall marketing budgets of 19 consumer packaged goods (CPG) companies include an increase from 3% to 6% on in-store marketing this year and this spending is projected to increase to 8% by 2010. This would be a compounded annual growth rate of 21%, making it a sector growing faster that internet advertising (at 15%) and advertising in traditional media (at 2%).   According to Advertising Age, Proctor and Gamble this year alone is spending $500 million of its $ 8 billion budget for global advertising on in-store marketing.  The Deloitte Consulting report also states that retailers are spending at an even faster rate of 26% compound growth annually.  Coming to a market near you: advertising.
Chrystal Ball
Not all of these trends will gain traction in Greece, but sooner or later some of them will.  The prize will go to the retailer that can first identify a need and meet it, even if it requires thinking outside of the box or operating in the perpetually grey fog that is the Greek legal system.

 

 

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