August, 1997

Fruits of Thought

What Consumers Really Want

Here in the dog days of summer, we get a brief respite from convention season. Not that the summer is short of conferences — PMA Foodservice Conference, The Annual Produce Conference and more — but the big trade shows tend to pick up in the fall, with a slight pullback in winter and then another burst in spring.

I love the trade shows and have learned a lot at the workshops but confess that after attending well over 100 major conventions, I’m still waiting for someone to give a general session speech with a title along the lines of “How to Reduce Service and Make Money Doing It!”

I’m speaking tongue in cheek here, but just a little bit, because the conferences tend to be dominated by speaker after speaker exhorting us to provide better service. Over and over again we are told that, today, people have “more money than time” and that everyone wants “convenience” and “personal service.”

These are smart people giving these presentations so, doubtless, there is truth to all this. There also is, however, an element of consultant self-promotion and insularity. Consultants who fly around the country giving speeches doubtless do have “more money than time” and such a message rings true with highly educated “information-age” professionals who write book reviews and book speakers, etc. The message even finds a sympathetic ear with generally affluent industry members.

Indeed, this type of message, that what everyone needs today is great service, has so influenced the culture that pollsters regularly report survey results indicating that this high level of service is what the vast majority wants and claims they are willing to pay for.

All of this I put in the category of “interesting, if true.”

Democracy, through the ballot box, tells us what people want, but it is capitalism, through spending decisions, that tells us what people want most. The last several decades of retail experience have told us that what people want most is: broader selection, easy parking and lower prices.

Good service? This is what customers would get from the old hardware store downtown with lots of advice and personal knowledge about the customer’s situation. Yet those stores are abandoned quickly when a new Home Depot or Wal-Mart, with broader selection, convenient parking lot and, oh yes, lower prices, opens nearby.

To some, this is a sign of disaster which needs to be stopped. I’m more inclined to see it as a triumph of meeting consumer needs. Those old style merchants may have created a quaint atmosphere but, voting with their capitalist dollars, residents have made clear that whatever value consumers may place on personal relationships with local shopkeepers and the institutional desire to keep a downtown active, what the consumer wants MOST is the broadest selection, easy parking and lower prices that chains like Wal-Mart provide.

The next big area of opportunity is Internet shopping and the use of new technology to reach out to customers. Few marketing ideas are hotter than “one-to-one marketing,” a phrase popularized in a couple books by Don Peppers and Martha Rogers who posit that the future for marketers may be found in pursuing “share of customer” as opposed to “share of market.” It’s an intriguing idea.

They give an example of a floral shop that, when you send flowers to your mother on her birthday, will enter that in the database, then send you a card next year suggesting a beautiful bouquet for Mom. These authors suggest that you will be so thrilled to be reminded of Mom’s birthday that you won’t mind overpaying $5.00 for the flowers. Perhaps.

My own take is that the impact of technology may play a very different role. Business, being able to afford computers and so forth, has traditionally had the upper hand. Consumers, with limited information, resources and time, have been at a disadvantage. But the tremendous decline in the cost of computing power that we continue to experience is changing all this. It opens the door for businesses to better manage individual customer relationships — but it also opens the door for customers to seize control of their own relationships.

Perhaps the customer will have a “personal concierge service” that holds onto all those records about Mom’s birthday, and when the time comes to send flowers, the service sends out an “electronic request for bids” to 30 local florists and gets the flowers at the cheapest possible price. This has already started happening with cars. Not all that long ago, if you wanted a Buick you went to your local Buick dealer. Today, via phone, fax or the Internet, you can contact a car-buying service and it will ask every Buick dealer in America for a quote.

Note how this technology transformed a local consumer into a national buyer, thus tremendously increasing the competition for each order and, as such, reducing dealer profit on a per order basis.

This is why produce has the potential to be so important in the new information age. Just the other day, a new Internet shopping service started up. This one, though, doesn’t do perishables. It will ship from a centralized hub all the grocery items and, the service believes, it can do it more efficiently than conventional retailers.

Yet produce remains, well, produce. Each item is unique; each lot — even within a grade standard — is different from the one before. As conventional supermarkets start losing hard grocery business to warehouse clubs, supercenters, Internet services and more — these supermarkets will be looking for ways to distinguish themselves with an offer that entices the customer into the store for a sensuous experience that is aromatic, tactile, something that people feel they get something out of, that they just can’t get out of electronically transmitting an order. This is meal solutions, deli, bakery, and, most certainly, fresh produce.  pb