MARSH'S DIFFERENTIATION EFFORTS SHOULD ENGENDER LOYALTY 2004-01-26 (2)

Mark Hamstra

Supermarket operators seeking to differentiate themselves from Wal-Mart or even from other traditional food retailers could do worse than to pay a visit to the new prototype stores that Marsh Supermarkets opened in the last two months.

As detailed in a feature beginning on Page 12, those two stores, the first of at least four such "new lifestyle" supermarkets planned by the Indianapolis-based retailer, represent a re-thinking of the way food can be merchandised in a supermarket. Rather than channeling shoppers up and down aisles of 6-foot-tall gondolas, Marsh's new design opens up the whole store at once and lets shoppers plan their route via a central courtyard-like space surrounded by individual rooms that house various departments.

Jordan Mozer, whose Chicago-based firm, Jordan Mozer and Associates, helped design the stores, said the idea was to "punctuate" the flow of the store as much as possible with store-within-a-store departments. For inspiration, he looked at old-style European marketplaces and high-end shopping districts like Rodeo Drive in Beverly Hills and Madison Avenue on Manhattan's Upper East Side.

The idea was to inject more pleasure into the grocery-shopping experience while at the same time making it easy for shoppers to find the things they're looking for. Although it's too early to determine whether or not the stores will be successful, early feedback from shoppers has been positive, Marsh said.

Even if the new stores fail, however, they represent a noteworthy effort on the part of Marsh to capture loyal shoppers in the face of increasing competition from supercenters and other formats. As the major industry players focus much of their attention on lowering prices, they run the risk of attracting consumers who are driven primarily by price, and thus liable to be lured away by the next Wal-Mart Supercenter, Aldi or Save-A-Lot that opens nearby.

Marsh's effort to make the shopping experience more enjoyable and position itself outside the realm of the increasingly crowded tangle of low-priced operators gives it an edge that will be much more difficult for competitors to replicate.

The basic challenges that the store design seeks to answer -- such as creating navigational simplicity, cultivating an aura of expertise in the fresh departments, and injecting excitement into center store -- are faced by all food retailers. Given Marsh's history of successful innovation and reputation for solid customer research, the solutions it has come up with ought to be watched closely.

The text and photos in this week's issue don't capture the full ambiance of the stores. The music, graphics and lighting all work together, from the parking lot right through the building, to give them what the company described as "a Mediterranean feel."

The result is what amounts to a free lesson for other retailers who are willing to observe and learn, just as they can from other innovative concepts like H-E-B's Central Markets and formats like Whole Foods and Trader Joe's that also represent outside-the-box thinking.

At a time when price competition risks deflating the value of individual store banners, concepts like these represent true differentiation and stand the best chance of generating customer loyalty for the long term.