Extreme Target Marketing: Proceed With Caution

When starting a business, one of the first things you do after deciding what you're going to sell is figure out who you're going to sell to. Demographics, socioeconomics, and perhaps a few other words ending in "-ics" come into play. Sam's Club is taking targeting to the next level in a string of new store formats. Could this be the next big trend in retail?

The massive wholesaler recently announced the launch of a Hispanic concept called "Mas Club." The new stores will feature products and services geared towards a Hispanic clientele including a full-service meat counter, an event area, and a cafe that sells fresh-made tortillas.

Sam's Club is also hoping to cater to the small business owner with its Sam's Club Business Center -which made its debut in Houston- that features an edited product offering. Also geared toward the business crowd is a new, smaller format store slated for the Garden City, Kansas area.

They say you can't be everything to everyone. Going with that logic, being specific when defining your target market is a smart business move. You can tailor every aspect of your store experience -even down to the type of fixtures you use in the bathroom- to appeal to that segment.

It's a gamble to do this though because you risk alienating others who might actually have a need for what you sell. So I wouldn't suggest painting your entire store in shades of pink unless you're positive you can handle watching a good number of men pass up on your product or service offering.

Boomer Design

It's no secret that our population is aging. Life expectancies are increasing and the Baby Boomers are heading for retirement, leaving demand for "senior-friendly" services to go up. With the sheer size of this demographic segment, it could prove to be a very strategic move to make your business easier for this target to shop.

Last week, Retail Design Diva featured a post on this very topic. Turns out that Europe's population is in a similar aging state and at lease one proactive retailer - Tesco - is doing its best to capitalize on this market by developing a senior-focused store.

But what does a senior-focused store entail exactly? Taking some inspiration from Tesco, The Dadson Diaries came up with a list of possible design elements seniors might like.

• Avoid hard color and lighting schemes.
• Keep carpeting to a minimum.
• Use shelving and displays that keep products within comfortable reach. (If you need to use close-to-the-floor or overhead shelving, make sure employees are readily-available to help retrieve items.)
• Use larger, easy-to-read fonts for all graphics and signage.
• Keep aisles as wide as possible.
• Provide comfortable seating around the store for any needed rest breaks.
• Use fitting room and bathroom locks with simple locking mechanisms. (Small, complicated levels and knobs could be hard to grip and operate for some people.)

For a business looking to target a wider range of ages, these items could easily be integrated in a way that fits whatever design aesthetic you're going for; and even better, these are things that anyone could appreciate.

Independents vs. National Chains

An article in today's New York Times' Dining & Wine section serves up a pieces of sobering news: "Even restaurants that say they're doing fine... can no longer afford to play hard to get." Turns out, many restaurants are noticing more customers "sharing appetizers, buying cheaper wine, ordering less wine and fewer courses, or just not showing up as much."

As a result, these traditionally high-end eateries are being forced to employ some tricks their lower-brow cousins have been using for a while -the value menu and happy hours to name two. Guess this just shows that even "rich and lavish" isn't quite the same these days.

But I think the most interesting point the article brings up is which restaurants are better equipped to weather the storm: independently-owned restaurants or national chains. Those arguing that the independents hold the upper hand say that their flexibility to adapt to changing customer preferences will keep them from suffering the same fate as national chains that have recently claimed bankruptcy. Chain restaurants and franchises, on the other hand, have more hoops to jump through to add or change menu items or specials.

In the other corner, those arguing that national chains have the stronger chance point to their larger advertising budgets and sheer size as advantages. They can hold more sway in negotiations with vendors and have better chances of scoring prime real estate.

Personally, I think there's opportunity for contenders in both categories to win in the long run. As I've seen both locally and nationally, the big dogs AND the small fries have suffered losses. It'll all come down to who can best anticipate and meet changing customer demands.

What do you think? Small and nimble wins the race? Big and steady takes it all? Leave a comment.

Can Green Business Survive the Meltdown?

Over the last few years, one of the largest trends in retail design -and in business in general- has been going green. With the public becoming more environmentally-aware (even the presidential candidates are placing a huge focus on energy this campaign season), we're seeing more and more businesses exploring green options. The cost for green products has come down, but they still can be significantly more expensive than other alternatives. Now that operating budgets are getting pinched, will all these companies still be able to justify the additional cost of greening up their designs?

In an article on BusinessWeek.com, Andrew Shapiro and David Gottesman attempt to answer that question by speculating "what will change, what won't, and how to stay the course" during the economic downturn.

While their article focuses on green business practices in general, I think some of their points can definitely be applied to the retail design world -the main one being that budget crunches will force companies to reevaluate their green programs to make sure they yield both short- and long-term financial benefits.

Thinking in the short-term, activities could include using high-efficiency lightbulbs and/or daylighting to cut down on energy consumption. The article uses this example from Walmart: "by upgrading the light bulbs in the displays of ceiling fans alone, the company saves $7 million per year in energy costs."

With top banks toppling, building consumer trust is important. Crossing into the long-term, being transparent about your green initiatives could put you more in favor with consumers as their concerns for our environment grow stonger (as trends suggest they will). It's one thing to say you're a green company, but it's another to actually explain what you are doing. Consumers are becoming hip to "greenwashing." Showing you're the real deal can only help in the long run -especially as far as retail design is concerned since green elements aren't always that obvious.

Innovative Ways to Support Franchisees

In the franchise game, the success of the franchisor relies heavily on the success of its franchisees. During these turbulent economic times, it's even more important for franchise systems to support franchisees. In an article on Entrepreneur.com, Adina Genn and Harold Kestenbaum explore some of the creative ways franchisors are cutting costs and finding financing for their most valuable players.

The Diaries was excited to see F.C. Dadson customer Kevin Brennan of Rock'n Joe's Coffeehouse & Bistro featured in the article. What's his franchise doing to help keep costs in check? According to Kevin, they've switched to a less-costly, but still appealing bread for their sandwiches as well as focused on training franchisees and employees to "maintain portion control and reduce waste."

Other ideas being employed by franchisors:

• Converting waste cooking oil into fuel for company vehicles (WingZone)
• Reducing store size and specifying more cost-effective interior finishes (Rising Roll)
• Ramping up online advertising (Kalologie Skincare) and using grassroots marketing tactics (CLIX)
• Becoming a Small Business Administration-approved franchisor (Synergy HomeCare)
• Producing educational webinars (Fetch)

That majority of these initiatives cost minimal -if any- extra money and seem like a very solid investment. Not only will current franchisees have increased confidence in the system, prospective franchisees may find you more appealing too.

National Boss Day

October 16th marks Boss's Day. One day a year where we celebrate "The Man" and "The Woman" and thank them for putting up with us throughout the year. We at The Dadson Diaries would be remiss not to recognize those bosses at F.C. Dadson that keep the company in line and moving in the right direction. That said, we'd like to give props to the following head honchos:


Collin Gruthoff - FCD President and fearless leader

Dan Dorchester - VP of Operations

Mary Teal - Controller and unofficial staff "Mom"

Dean Umlauft - Senior Project Manager

Angie Borchardt - Marketing Manager (& The Dadson Diaries' Editor's Boss)

Dave Farrell - Installation Manager

We'd also like to give a shout out to: Adam Hoffman and Dennis Neverman, our 1st and 2nd shift supervisors.

Happy Boss's Day! Relax and enjoy it (because we'll be back to bugging you tomorrow!)

MyAds

Small business owners, by their very nature, are enterprising people. It's a good thing too because, as we're quickly finding out, it sometimes takes a bit of ingenuity to keep the doors open when the economy is not-so-great.

Unfortunately when tightening the budget belt, marketing is often one of the first things to get scaled back. Maybe it's the marketing education in me coming out, but I'd like to say that just because the marketing budget isn't what is used to be doesn't mean you have to cut back on your efforts.

Almost as if to prove my point, I came across this article on BusinessWeek.com that talks about MySpace's new advertising initiative, MyAds. While the "proven-ness" of advertising on social networks is debatable, MyAds does pose and interesting opportunity for enterprising business owners -especially those with small ad budgets.

First, MyAds takes out the creative department and presents a do-it-yourself platform where users can create their own banner ads, set their own pricing, and select their target from MySpace's highly-segment-able database.

MySpace officially unveiled MyAds today and the newness might deter some business owners, but at least some of the companies that test-drove the program during its beta phase saw a "50% to 300%" jump in people clicking on their ads.

Granted MyAds won't work for every business, but if social networking is supposed to continue its dominance on the web, it might not be a bad thing to look into.

The Whopper Bar

I was checking Ddimagazine.com and came across a news brief from Burger King announcing the opening of its new "Whopper Bar" location at Universal CityWalk in Orlando. The new concept is a "condensed and more contemporary" version of BK that comes complete with a "Whopper topper area" where customers can customize their burgers.

So, another giant is getting smaller to fit into tighter spaces. While it's too early to tell (the CityWalk location isn't set to open until spring 2009), I think this downsized concept will work for two reasons:

1. Convenience: the smaller size will allow BK to open in locations that it couldn't before, allowing more customers more access to the burger chain.
2. Customization: while BK has always been about having it "your way," the Whopper topper area will let customers make it their way themselves, adding a level of interaction to the fast food eating experience.

Not to mention the smaller size makes it a more cost-effective alternative to a traditional store.

With financing and credit tightening, it's not surprising to see that more restaurants and retailers are experimenting with smaller formats. Count the added convenience of being able to enter more areas and customers stand to benefit as well.

Design Thinking

Albert Einstein was a smart guy. So when he said, "We cannot solve the problems we have created with the same thinking that created them in the first place," he made a very good point. In order to differentiate our businesses, we need to find new alternatives. We need some "outside the box" thinking. In other words, we need some design thinking.

An NY Times article titled "Design Is More Than Packaging," describes the design thinking process as this: "While definitions vary, design thinking usually involves a period of field research -usually close observation of people- to generate inspiration and a better understanding of what is needed, followed by open, nonjudgmental generation of ideas." Each idea is analyzed and the "more promising" ones are combined and tested as prototypes. (In this sense, prototypes can range from text descriptions or drawings to more complex 3-D models and so on.) The winning ideas are then put into action.

In the retail and display worlds, we should be employing design thinking with every project we work on. Part of creating a branded environment or display is building something that sets the client apart from the competition. If designers rely on the typical solutions, we become one-trick ponies. Not only does design thinking help our clients stand out, it helps us designers and manufacturers stand out as well.

The article uses the example of a Saturn car dealership showroom refurbishment. Instead of reemploying the "touch of home" design elements that were currently being used, design thinking led the design firm to look at the showroom more as a museum exhibit than a retail space. Interactive elements were brought in, including magnetic paint strips that could be attached to the cars and large fabric swatches that could be draped over car interiors. Both designs were meant to create a sense of comfort for potential buyers and both do -in very different ways.

And that's the kind of alternative that design thinking challenges us to find. The main question now is: are we -the designers and manufacturers- up to that challenge?

Halloween: Retail's Bright Spot

A night normally reserved for trickery might prove to be pretty treat-filled for retailers this year. According to the National Retail Federation's Halloween Consumer Intentions & Actions Survey (as report by ddimagazine.com), not only do consumers plan to celebrate the holiday this year, they plan to spend a little more than they did a year ago to do so. Some highlights from the survey:

• Total spending on the holiday could reach $5.77 Billion
• Consumers will spend an average of $24.17 on costumes
• An average of $20.39 will be spent on candy (a conservative estimate for my household)
• That ever-popular 18-24 age group will be the big spenders, averaging $86.59
• The most popular activities include handing out candy, decorating, and pumpkin carving (dressing in costume didn't break the top 3, but made a respectable showing at 35.8%)

It looks like Halloween is popular with the populace. This just shows that even in the middle of uncertain economic times, people still like to celebrate. And, as the article points out, Halloween could provide a little boost to retail, which is in the middle of a less-than-stellar fall.

So, if you're in the Halloween business, enjoy it. If you're not, I'd seriously consider finding a creative way to get in on the action. Pumpkin carving contest, anyone?