ARSE Alert: Productivity’s Poverty & the Return to “Long Tail” Retail

I remember walking through a Kmart store a few years ago, back when Martha Stewart’s home line was all the buzz and people talked about “actually” going to Kmart for towels the way they now talk about hitting Wal-Mart for more than diapers and cat litter.  On the shelf of color-coordinated bathroom accessories, I spotted the usual . . . towels, washcloths, soap dispensers, soap dishes, toothbrush holders, and a giant water pitcher.  A what?  And in every color?  I mean, what Kmart shopper buys a water pitcher for their bathtub?  And on top of that, the vexing vessels were total space hogs and at the highest price point there!  Later, I thought about it and had a eureka moment . . . Martha probably insisted on those pitchers staying in the assortment, sales be damned, because the two or three high-end customers that actually bought one probably picked up a pile of the other stuff at the same time, all the while giving Martha silent cred for getting their lifestyle.  I decided that either this was true or that it should be and from that day forward I’ve turned a skeptical eye toward any retailer (or vendor) that focuses too relentlessly on productivity . . . or those that get too much glee out of SKU reduction for SKU reduction’s sake.  Well, always right, sometimes early . . .

 

After years of data-driven SKU cuts and POS pragmatism, it appears the retailers are getting hip to the fact that some long tail items need to stick around . . . and right there in the store (not just online).  If you read about Wal-Mart’s new “win,” “place,” “show” categorization (previous blog), you know that “show” is a counter-intuitive way of redefining productivity; keeping certain flat-to-declining items in the stores with the goal of getting those items crossed off of a shopper’s list . . . after all, would you rather get measly sales on one item or have a customer ditch their entire list because that one item wasn’t in the store?  Seems that others are catching on and even making hay . . . Dunnhumby, a British research shop now owned by one of its biggest beneficiaries, Tesco, is being leveraged by everyone from Kroger to Macy’s not to find more customers, but to find out which fringe items keep certain customers shopping, and coming back.  You hear us talking about the move toward “hyper-localization” . . . Dunnhumby is turbo-charging Macy’s “My Macy’s” localization effort by focusing on anomalies and quirks that have larger implications, not on broad consumption patterns or even traditional customer segmentation models.

 

After floating aimlessly in a sea of sameness, I for one am looking forward to docking at a fringe festival or two

 . . . aren’t you?

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