Retail wars - grocery shopping
Thursday, March 19, 2009 0:22
Supermarkets were just around the corner waiting to demolish old-fashioned competition. Mom and pop stores went down and Mr. Fiskin marched on.
In Finland we have very few retail chains that dominate the market especially in the segment of groceries. We have two equally strong competitors, which share about 90% of the market share. Competition is in deadlock, neither side wants to erode profitability by lowering prices. Homogenic Finnish population likes to eat potatoes and beef, so product differentiation is not going to solve this fight. What then?
SERVICE COMPETITION
The only available competition tool in the toolbox seems to be service. One can build more stores so that people will find it easier to shop at their preferred location, one can employ more workers to lay products for sale in beautiful manner, to explain features, to give advice and to run cash registers. However, these are simple methods and the biggest competitive edge for these big chains remains their vast existing network or sales points.
WELLNESS SERVICE
Now there is a disruption in the status quo. The other player made a clever move and integrated an online nutrition tracker to their bonus system. Tracker has complete nutrition information of any product in the shop and by summing up all purchases it will form a complete analysis of nutrition intake. Now the customers are able to log on and see if they are eating well and how should they improve their diet. Very powerful reason to move all your grocery shopping into the chain with this service. If you can’t improve the game, change it.
Forest says:
March 20th, 2009 at 11:17 pm
There must be something fresh that can be pushed into the market… the market needs a strong competitor from underneath to come up and threaten their authority… then they will start to find areas to reform.
Great post.
Forest’s last blog post..Big Ben Patton’s Place To Become…
Jake Stone says:
March 21st, 2009 at 12:31 am
Dear Forest,
Thanks for the comment. Many a time mere freshness is not enough. Most consumer product manufacturers have turned “new” into a cycle of fashions, which are only superficially new. My advice to any company out there is that you should always think if your product is able to generate real improvement of life quality.
It is fascinating how markets have a tendency to concentrate towards oligopolies only to experience a rift, which tears the market dynamics wide open and provides opportunities for nimble competitors. It is lucky and unlucky at the same time that these rifts appear far and between. Too much market dynamic is bound to lead into chaos. Capitalism really needs the inhale and exhale of market integration and disintegration.
You sure work hard to kick start the new blog. For such industrious legwork I have no other option, but to help you with your quest. Count me in. I don’t know what could I do for Real Blogging Tips… I would like to send you a guest post for screening. I must warn you, I’m bit of a loose gun and sometimes politically incorrect or out right wrong and outrageous.