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Tough customers want sharper stores

Though product and presentation are obvious details in retailing, some high-performing retailers find success by concentrating on the intangibles as well, such as customer loyalty and brands.

"The customer is more difficult to segment," said Richard Wildman, managing partner, UK/Ireland Retail Industry Group, Accentures, at NRF's Super Session, Pushing the Boundaries of the Customer Experience. A customer may wear Wal-Mart underwear under an Armani suit, for example. Consumers also think of shopping, not as a leisure activity anymore, but either as a chore or an indulgent activity.

Germany-based discount store Aldi performs well because it has a clear, strategic intent, he said, selling only the 700 most often used products in the home, and only the most popular size in each. This simplifies the process, and gives it "30 times more purchasing power than Wal-Mart."

Apparel retailer Zara excels at innovation and execution, he said, with its "fast fashion." The total time for a product to go from design to the store shelf is about two weeks and each store is stocked twice a month.

The alliances Starbucks forges allow it to extend its brand so that it has locations within Barnes & Noble stores, for example, as well as a special blend of coffee for Nordstrom's and ice cream for Dreyer's.

U.K.-based Sainsbury's Supermarkets has also become a successful retailer after turning itself around, said Maggie Miller, chief information officer and business transformation director, J. Sainsbury plc, during which it listened to customers' wants, resulting in three new store formats.

One such format, Hazel Grove, was developed in response to customers' desire to get in and out of the store quickly. Vending machines carrying 150 lines are at the front of the store, as is a Quick Shop area that stocks 2,000 essential items.

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