Amazon and Whole Foods: what next?

The dust is starting to settle on what some believe is the game-changing entry of Amazon into ‘proper’ grocery retailing. A couple of days ago I came across this link from FoodDive which adds a little more context. Firstly, this comes on the back of my post two weeks ago on the need for successful retailers to put omnichannel at the heart of their business. Secondly, here in the UK there is no need – yet – for the established retailers to run for the hills. Whole Foods has a small, almost insignificant presence on the ground right now. But the final strand was the Whole Foods positioning. A store rooted in organic and whole food values was not going to resonate widely enough either here or across the pond with the volume of customers Amazon is presumably eyeing. And so this snippet quoting Whole Foods CEO John Mackey puts another piece in the jigsaw. The Whole Foods of the future may not even be Whole Foods – or certainly not the sole proposition. The wholefoods sector in the US gives Amazon plenty to be going on with and will be a solid base on which to grow and diversify. I am inclined to think that it is the ‘new’ proposition that will land here in the UK, where the same sector is not large enough to serve Amazon’s ambitions. And of course this needs to integrate with the fledgling Amazon Fresh project. It’ll be fascinating to see how it unfolds.

Retailers – check out your checkouts!

It has always puzzled me how poor some retailers are at parting you from your money and driving turnover in store.

The ‘moment of truth’ is the checkout. We all still use them to some degree and this is probably still where you tend to hear the most huffing and puffing of exasperation. Why, after all this time, are some retailers so bad at it? This the fundamental reason for trading in the first place!

A couple of examples: once I was in an outlet ‘village’ and ended up making an impulse purchase on a pair of trainers. I was already visualising how they’d look now that I had found the perfect colour for my intended outfits. At the same time the queue was lengthy and building. I was probably about 12th in line. There were two cashiers. In a corner, around 4-5 assistants were laughing and joking. The shop itself was also a disaster area with odd shoes everywhere. The giggles and larks continued as a further ten joined the queue in the time that two completed their purchase. In the end, despite the emotional attachment I had already formed with my new trainers, I decided the shop simply didn’t deserve my custom. A further two also left the queue after me: at a guess £60 turnover and let’s say minimum £10 margin gone (it was an outlet store!) between us. That was in the space of about 15 mins.

And today, I had picked up item in a leading discount store and was number two in the queue. In front was a man hoping to buy the most battered box file you will ever see: crushed and with a label missing. There was no price on it but he said it was 10p.  The missing label was the barcode. Supervisors were called. The queue swelled. Another file with code was brought. £2.99. Ah, we will have to check this further. Another call for another supervisor. And so on. Minutes passed – about four I think. I checked my phone for messages and mail. And then I put down my £2 purchase and left. This chap would have been doing them a favour if he’d just walked out with it. If your trading model is volume- driven ‘cheap and cheerful’, surely you make progress through the till truly rapid?

So that’s the ugly. What about the bad? Well again, it’s about the general approach that retailers take towards ‘The Checkout’. Some are quite happy to let queues build while making sure that the merchandise still on the shelf looks AMAZING!! Oblivious to the fact that the purchase decision is still going on.

And then, because there sometimes aren’t any floorwalking staff, queries are brought to the till. ‘Can I return this here?’ ‘Do you have this in a size x?’. ’This is the only one on the shelf but it has a hole in it….’ Etc., etc.. In every instance, cashiers are not allowed to make their own judgement: people (who quite often don’t exist) are summoned. And while we wait, we are reminded that there are alternatives: online, other retailers who DO make movement through the checkout a rapid and flexible experience, or perhaps thinking in the ten minutes waiting that I don’t actually NEED this: it’s an impulse, I’ll probably feel guilty later on. No, I think I’ll leave it.

So, my advice to all ‘bricks and mortar’ retailers finding business a war of inches:

  1. Flex your tills to cope immediately with the ebb and flow of footfall.
  2. Ensure there is a customer query or return facility that doesn’t interfere with sales.
  3. Empower your cashiers to take decisions. At the very least give them the ability to ‘co-decide’ if they work in tandem, or a value ceiling to enable them to deal with lower value items. The odd mistake in the name of effective throughput is not worth worrying about. And if you don’t trust your cashiers, why do you employ them?
  4. Ensure that each one, every shift makes at least three customer transactions: it keeps them fresh, incentivised to serve rather than look the other way when it’s busy, and the experience of dealing with customers at the moment of truth is always invaluable: to ask why they liked it, if they found everything they wanted and so on.
  5. And if you are a store manager who is happy to see queues in double figures… EVER… think about a career change or be prepared for a change of employer when yours inevitably sinks. It’s a jungle out there!