Meet Your Customers All Over Again

Jamil Satchu
Tyler McPherson
John Phee

Volumes have been written about the Wal-Mart effect—and volumes more are undoubtedly in the works. Most have the underlying theme that the retail behemoth is an unstoppable competitive force that dominates every market it enters. At first glance, the grocery industry seems no different. One study estimates that for every super center the giant opens in the next five years, two supermarkets will close—with a total of 2,000 stores shutting their doors across the United States.

Some specialty grocers have adopted the David versus- Goliath strategy of using their small size to their advantage, remaining focused on niche, highend markets. But when you’re neither David nor Goliath, how do you compete? You look to what matters most: your customers.

This article explores how grocery retailers caught in this shrinking middle ground can reclaim their position by taking a new, two-pronged approach to customer segmentation, applying this information to a series of growth levers and then implementing more tailored and targeted programs. The result is profitable organic growth, and it could very well mark the reemergence of these middle players. 67