Let's take a look this week at what constitutes the artistic side of the supermarket: merchandising. The definition of merchandising can be a little elusive, as can be its execution.
As is pointed out in a news feature on Page 43 of this week's SN, merchandising has to do with knowing store customers and making the store itself speak to fulfilling customers' needs and aspirations. How is that to be done? It involves knowing what the supermarket stands for and causing product to accentuate that stand, or image. For instance, if the store caters to consumers who are value shoppers, it makes sense to have massive displays of product that, in fact, represent genuine value. Conversely, a store may cater to convenience-oriented consumers. If so, a way to accentuate that might be to have a fresh-prepared offer at the front of the store.
Perhaps the easiest way to grasp the concept is to consider the store to be an advertising medium -- a medium that's capable of inducing consumers to pick up, examine and perhaps even sample product. That can move consumers beyond need and toward aspirations. Viewed that way, the store itself is a very powerful medium, and perhaps the most powerful in the direct-to-consumer advertising category. It's a little difficult to precisely define merchandising, but it's certain that you know it when you see it.
It has often been lamented on these pages and elsewhere that the food-retailing business has lost its orientation toward merchandising because it's increasingly rare to find merchants at the helm of food-retailing enterprises. Instead, companies tend to be headed by professional managers, bankers and so on -- those with more of an orientation to the bottom line than to merchandising. Maybe it's time to return to this concept: If merchandising is in place, bottom-line concerns will take care of themselves. Ironically, some of the food-distribution companies now struggling the most are those headed by non-merchants.
As we reflect on struggling, let's turn our attention to this:
The long-expected Chapter 11 filing of Fleming occurred last week, marking the largest-ever bankruptcy of a wholesaler. The long devolution of Fleming is nothing short of a tragedy, and it must be devoutly hoped that Fleming will find a way to work through its troubles and emerge as some sort of ongoing concern.
As you'll see by looking at the Page 1 news articles about Fleming, though, there is some opinion that Fleming may be headed toward liquidation. Indeed, some posit that such an outcome might not be all bad since the Chapter 11 process can't fix problems of sector overcapacity. Some are of the opinion that the wholesaling sector would have more than enough capacity to fill demand if Fleming were to drop out, giving more viable incumbent companies a chance to pick up some of Fleming's distribution assets. At least the food-distribution industry isn't alone in this: The same sector-capacity argument is being made about bankrupt United Airlines.