While it is hardly new, it has only recently begun in Australia. That is, retailers selling insurance, with both Coles and Woolworths fighting for the insurance dollar. They are not carrying the can, so the underwriters are not out of jobs – yet – but the development must put downward pressure on overheads in the insurance industry and will also encourage a more diverse range of products, if for no other reason than to make comparisons difficult for the consumer. A bit like having you
r own label.
Many years ago when operating in department stores, we used to regularly organise fashion shows in the restaurant. These were aimed at targeting who we thought were our core customers – women between 20 and 40.
We offered free tea and cake, hired models, erected a catwalk and our customers thoroughly enjoyed the experience. While not a huge expense, I often wondered whether we derived any tangible benefit from these fashion shows.
The audience was invariably geriatric. They would arrive well in advance with blue rinsed hair, drink copious amounts of tea, and eat as if there was no tomorrow. Those husbands who were still alive would tag along and gobble their fair share along with their gabbling wives and their friends. After the fashion show they would disappear immediately to ensure they didn’t miss their bus back to the retirement village.
What this resulted in was what you may expect. We simply stopped having fashion shows mid-morning. In hindsight, this was a mistake. What we should have done was what the Japanese started doing in 2013 – focusing on senior citizens as primary customers by offering services and products tailored to their needs.
According to Euromonitor, Japanese retailers are competing in a variety of ways to ensure that seniors feel comfortable in their retail spaces to capture demand among people with a lifetime of savings under their belts. This includes providing concierge shopping assistance and medical clinics.
Understanding the need for this growing consumer base, retailers are looking to provide a variety of services that will help bolster the loyalty of this large and potentially lucrative customer base.
This diversification into goods and services such as insurance, medical clinics, and merchandise for an ageing population presents its own set of challenges.
To what degree do you or don’t you stick to your knitting?
Does moving into disparate goods and services dissipate your main marketing image or focus? For example, having a casket department would hardly do any retailer’s image much good.
So what of the future? Is there an opportunity to expand instore services?
By the end of 2008, 96 per cent of Costco warehouse stores had foodcourts, optical dispensing centres, and one hour photo centres. Pharmacies were present in 87 per cent of stores. Gas stations and hearing aid centres existed in about 60 per cent and 55 per cent of warehouses, respectively.
Some worked better than others. For example print and copy centres and car washes had very low penetration.
As retailing becomes tougher, retailers need to exercise the lateralisation of brain function. Whether you are logical, analytical, and objective, or intuitive, thoughtful, and subjective, there are opportunities out there for bricks and mortar.
Stuart Bennie is a retail consultant at Impact Retailing and can be contacted at stuart@impactretailing.com.au or 0414 631 702.