Enchanting Retail: Enchanting Profits
A few weeks ago an article I wrote (Big Brands vs. Little me) was published in the Spring issue of The Robin Report.* The piece speaks to the underleveraged power of the personal to offset the smoothly efficient algorithms of online shopping. The more we don’t have to leave our homes, the more we’ll lust for some sort of social engagement when we do. It’s a facet of retail from which Starbucks is perfectly poised to benefit: The barista protocol requires staff to know your name. You design your absolute favorite concoction and claim it like a true member of the cognoscenti.
We can see this drive toward the particular in all the various artisanal products coming into focus. There’s a joy in nuance: chocolates from France, macaron-esque cookies from Spain, coffee liqueurs from California. We dote on these whimsical discoveries. So in the world of business news, tiny is big. The ‘sommelier’ of the shops which purvey them love to speak about them, educate customers about them, evangelize. They provide a charming education and topic of conversation, which the customer then goes and shares with guests they host.
It’s a sweet model for sure. Worth spending $25 for the chocolates or alfajores from Spain, or $35 for the liqueurs. Margin, meaning, street cred: Everything a boutique brand, or indeed any brand could want.
So why don’t big retailers compete here? Why not big brands?
We often joke that Maxwell House or Folger’s would never have started a coffee shop, right? Big brands have a tough time thinking small. But if the heat of the market is trending towards the convenience of commoditization ushered in by Amazon, they will have to consider how to deliver social engagement if they want to deliver genuine, margin accretive growth.
Suddenly, there are a couple of the big guys really engaged. I suspect it started with Nestlé committing more than a decade ago to start Nespresso as a retail business. An international retail business. Recently, I read about two more granular enterprises coming from huge multi-national corporations: Unilever’s Magnum bars (selling 100 million bars in grocery) now going the other way, developing custom-dipping shops throughout the world, the first one in the US is in Soho for the summer. Charming. Then there’s Maille, the French mustard company, creating its own retail shops, complete with mustard tasting bar, vinegars on tap and classes in the art of, well, mustard, augmented by the ability to create a custom mustard ($59).
These are classic examples of Big looking Small in order to create the retail enchantment bricks and mortar folks need: A reason to leave home. Well done.
Hey! Big grocery. What are you doing to make the trip through your aisles an enchanting experience, not a coupon-clipping chore?
Hey! Big fashion brands. What are you doing to make the slog through big department stores to find you into an enchantment, a reason to bother?
* It’s in the print edition, so hasn’t posted on line yet: If you’d like a copy, just let me know and I’ll send the pdf.