August 23, 2009 in City

Researchers see shift in shopper loyalties

Retail experience trumps brands, according to Bellevue, Wash., firm
And Melissa Allison Seattle Times
 

SEATTLE – Based on years of studying people’s shopping habits, a market-research firm is predicting consumer loyalty is shifting from products and brands to retailers, particularly those that offer shoppers an experience rather than just goods.

Everyone from economists to marketers to social-media experts has an opinion about how the recession will change forever the way people shop. The market-research firm Hartman Group, in Bellevue, takes a longer view, saying a radical transformation was happening before the recession hit.

“People don’t relate to brands in the same way they used to when there weren’t that many products to choose from,” said Hartman Senior Vice President Michelle Barry. “Capturing the attention of the consumer requires different tactics, getting a lot more intimate and experiential.”

Hartman hails Apple as one of the few companies that gets it and applauds Procter & Gamble for buying chains in the car wash and men’s grooming-products businesses, seeing that as a sign the Cincinnati-based products giant is dipping its toe into retail.

In Seattle, it points to Beecher’s Handmade Cheese in Pike Place Market.

“While the customers are there, they can literally see cheese being made, which reinforces the fact that they’re artisanal,” said Jarrett Paschel, Hartman’s vice president of strategy and innovation. “Their personnel are well-versed in cheese-making practices and the cheese world, and it’s all reinforced with a host of ancillary products – crackers, cutting boards, etc. That’s also very important.”

People who have that experience at Beecher’s at the Market will remember it when they see the brand at local supermarkets, he said. (Beecher’s is not a Hartman client.)

Beecher’s owner Kurt Dammeier knows all about it. “When we started selling in grocery stores 3 1/2 or four years ago, we were concerned that sales at the store might go down because nobody had to come to our store (to buy it) anymore,” he said.

“What happened was the opposite. Sales went up. … Everybody who’s been here, every time they buy it at the grocery store they’re reliving the memory a little bit.”

Starbucks is another example of a local company creating an experience for which people pay more than they do for a commodity, Paschel said.

“Starbucks took a tired product category and transformed it into an entire world,” he said. “Imagine if someone had walked into Folgers and said, ‘We have a new business model for you: Open thousands of stores around the world based around the espresso bean.’ It’s hard to get somebody to wrap their head around what could be.”

Hartman’s researchers think the same thing could be done for all sorts of products. Crayon makers could create worlds of art. Cookie makers could offer baking experiences with tours, contests and ingredients for sale. Soda-pop makers could re-imagine the old-fashioned soda-fountain experience.

Some retailers are starting to get it. Trader Joe’s offers its own brand of products that shoppers feel a connection to and talk about with one another, Paschel said.

It and other grocery stores dedicate employees and space to cooking and sampling, in contrast to old-school supermarkets where “someone in a hairnet offers cheese on a cracker that some manufacturer paid to toss your way,” he said.


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