The Downsizing of America: Kraft Heinz’s Breakup Is Just the Beginning

This article from The Robin Report (free to sign up for their daily posts on retail) is about grocery stores. Actually, that’s not quite right. It’s about choice and the fact that we’re getting tired of having to choose among 20 kinds of detergent. Or cat food. Or ketchup. Etc. I find such a shopping experience annoying because I don’t actually think one is better than the other and, if one is superior, I have no idea which it is. I know I waste time and I am pretty sure I waste money trying to sort among whatever over supplied and over marketed product I’m trying to buy today. It occurs to me that’s part of the reason online is so successful. It makes the sorting easier.

But why would we believe this consumer behavior is unique to grocery stores? I wrote a new Market Watch on brands a couple of weeks ago that tangentially addressed this where I asked what your customers want from your brand and if they care, or can afford to care, as much as they use to. This Robin Report uses Trader Joe’s (where Diane and I do more and more of our grocery shopping) as an example. They carry way fewer choices than a traditional grocery store. But they have most things you want at good prices, the brand is trusted and it takes less time to shop.

What the Robin Report doesn’t mention is the very positive impact on Trader Joe’s cost structure. The financial benefit of carrying and having to manage fewer product skews in a smaller space with, I suspect, fewer employees in a store is so obvious I won’t even explore it here. I really ought to look up Trader Joe’s average annual store sales per square foot.

Imagine taking this approach in a clothing or shoe store. Maybe you ask your customers/followers/influencers to tell you which brands to carry and which to get rid of. You maybe buy more of fewer brands. Maybe you directly compare your own brand with some of the ones you used to carry. You offer higher quality, reasonable prices, a simplified shopping experience. Is it only for your “members?” These are not generic products. They are reliable quality, vetted, products in the Trader Joe’s tradition. Be absolutely transparent about what you’ll be selling and how you figure it out. Make a soap opera out of it, publicly highlighting your trials and tribulations.

Yeah, I admit I’m kind of spitballing here. It’s risky and I understand that an established, public retailer can’t take the risk. But do you think the trend described in The Robin Report is real and valid for other industries? If so……………..?