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Winning in a Brave New World: Value and the Retailer

Monday, November 17th, 2008

This is the third in a three-part report.

Never before has it been more crucial for retailers to deliver on the age-old value equation: Value = Price + Performance. With the ominous gloom of the economic crisis, credit crunch, inflation, job loss, and more, the majority of shoppers are making drastic changes in their shopping behavior, in turn directly impacting retailers’ bottom lines.

With shoppers spending less overall, shopping in new channels, trading down to lower-tier or private-label products, and clipping coupons, retailers across the board are positioning themselves as destinations for value. Here’s how a few leading retailers are doing it.

Target®
Target is delivering on its Expect More. Pay Less. equity with its “A New Day” campaign, which inspires consumers to re-create experiences that they might otherwise cut from their routines in hard times. The campaign specifically calls out the price point of Target products presented in relatable and emotional contexts such as a sidewalk café in your living room or a vacation in your backyard. No matter the context, Target is packaging valuable experiences for its audience.

Whole Foods®

Known to many as Whole Paycheck, Whole Foods aims to prove to shoppers that premium products and value go hand-in-hand. Shoppers can join Value Gurus (like the one pictured here) for in-store value tours on how to shop at Whole Foods on a budget and receive Value Shopping Tips for enjoying the best savings and bargains without giving up organic and natural foods.

The Whole Deal Value Guide (available in store and online) is filled with more than $40 in coupons, recipes and money-saving tips, and highlights “Sure Deal” 365 private -label product offerings. Shoppers can also subscribe to the Whole Deal e-mail.

Publix®
Publix is offering its shoppers a Simple Strategies for Saving download on its Web site with more than 30 thrifty tips on how to stretch your dollar. This useful and practical value-add item proves to shoppers that Publix is a trusted and savvy retailer who is looking out for the shopper’s best interests. It also positions Publix as a destination for value during challenging times.

As shoppers continue to seek out value, and as their values continue to shift, retailers have a unique opportunity to reposition themselves and strengthen their equities. As Frank Bifulco, CMO of The Home Depot® recently noted, “The economy is such that people are putting a greater premium on the
value that they get from the money they pay. When you look at retailers
across the board…the emphasis is on price and value; I’ve never seen it
as acute as it is now.” Walmart recently landed on Save Money. Live Better. as a brand proposition, which appears to be resonating with shoppers this holiday season.

Easy enough for discount retailers, but how will more upscale retailers — like Nordstrom, Room and Board, or Brooks Brothers — handle value messages without diluting long-term brand equity? The value-positioning frenzy has only begun, and marketers and retailers alike should keep a close eye on what else is happening in the marketplace.

– Contributed by Kristina Boyer

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