“So what can I do with that?”
This is a basic question we ask ourselves every day, everywhere we go and with just about everything we encounter in our daily life. This is not an out loud question, but something that happens under our level of consciousness, as a natural part of our brain’s automatic processing system.
This processing starts first with our senses, which serve as a complex network of receptors and pathways that communicate pertinent information to our brain. Like a reconnaissance team, our eyes and other senses are constantly scanning our environment to gather relevant information and then make all kinds of snap decisions on behalf of our brain, which serves as the mission control center.
What is the brain’s recon team looking for?
Well, on a very primal level, it is looking for two critical things: enhancements or impediments to life.
Our brain and senses are constantly on the lookout for things that can help make our life better, happier, easier, more pleasurable, etc.—and to avoid things that can harm us, frustrate us, slow us down or get in the way of our intentions.
As we go about our daily activities, our subconscious brain is continuously trying to make sense of the world around us by detecting, decoding and determining what it sees, hears, feels, tastes and smells. But this sense-making ability requires lots of energy, most of which is fueled by a form of sugar called glucose.
Because the brain is so rich in nerve cells, or neurons, it is the most energy-demanding organ we have, using one-half of all the sugar energy in the body. To resolve this problem of limited brainpower, our more efficient subconscious system takes over the bulk of our decision-making. This subconscious system works in the background and conserves energy by doing something called predictive coding.
In short, predictive coding is an automatic process our brain uses to quickly scan our environment and make microsecond decisions about what something is, whether that something can help or hurt us and, most importantly, trying to answer the question of what can we do with that something. We rely on this predictive coding mechanism because it reduces our need to study everything around us in exhausting detail.
Instead, our background thinking just quickly assesses the “form and shape” of things in front of us for recognition and match for something we already know, but there are times when we don’t know what something is, which triggers and alerts are more conscious brain to get involved.
A Caveman Walks into a Cooking Store
The first time I saw a mandoline—not the musical instrument, but that kitchen contraption to julienne vegetables— I was in a fancy cooking accessory stores. I didn’t know what a mandoline was for, what I could do with it or how it could possibly help my life in any way. There wasn’t anyone in the store available to help me, so my caveman-brain tried to figure it out on its own. After a few seconds of trying to solve the complex riddle of “what does this weird-looking thing do?” my caveman brain simply gave up and I moved on to the next thing: a shiny new gas grill! My caveman brain knew exactly what I could do with this thing!
It took me many years and lots of cut fingers to finally see a mandoline being used on a cooking show. The celebrity chef revealed it to be one of the most valuable kitchen tools he had. In that moment of watching him slice and dice vegetables so effortlessly and so beautifully, I couldn’t help but involuntarily declare:
Aha! I get it! Time to buy a mandoline!
This moment, when consumers finally “get it,” is a pivotal turning point for understanding consumer behavior. But it is not only consumers that ask this basic question: “What I can do with that?” Inventors, scientists and entrepreneurs also like to ponder and experiment with this question, but in a much more conscious and deliberate way.
Love at First Sight
I remember when I heard Steve Jobs was developing a cell phone. It was the summer of 2007 and I just didn’t get it. Since its inception, I have always been a dyed-in-the-wool Apple fanatic, but even I dared question the prophecy according to Jobs with the query: “Why in the world would I buy a cell phone from Steve Jobs?”
Now technically, the iPhone was a “smart phone,” but based on its form and shape, it looked a lot like a glorified cell phone to me. Besides I was kind of dumb to what a smart phone even was back then.
I read several articles about the upcoming iPhone unveiling, which included an exposition of seductively revealing photographs that showcased this supposedly leading edge product. I studied those photos closely but, just like the mandoline, my brain still couldn’t figure out what on earth I would do with it.
My life was already technologically challenging enough with devices, so I pretty much resolved myself to the idea that— despite my intense love, admiration and loyalty to Apple—I wouldn’t be buying the new iPhone anytime soon.
Or so I thought…
Ironically enough, on the day the new iPhone came out, I just happened to be in a shopping center with a new Apple Store, so I walked in. And there it was, lying naked on the table: the gloriously designed new iPhone. One of the young Apple employees with a cool-looking t-shirt and lanyard walked up to me and said: “You want to try it?” I hesitated for a bit, and then said, “Ehhh…Sure! Why not?”
At this point in time, I had a fashionable Motorola Razr flip phone in my back pocket that I would often try to inconspicuously show off to others. I got that Razr phone for nearly free from my carrier (with a long-term contract). I couldn’t imagine parting with it anytime soon, particularly since the new iPhone 8G model was a whopping $599.
I remember thinking to myself, “What idiot would pay that much for a cell phone they could get for free?”— particularly from a company without experience in the cell phones. But as soon as I placed that new iPhone in my hand and felt the edges, the profound simplicity of the navigational touch features and the iconic array of apps on the screen, my senses and brain immediately said to me in unison:
Wow! I think I can do a lot with this!
There was no more explanation needed. It was that instantaneous of a decision.
I bought the new iPhone on the spot. Although I was now $599 poorer, I was filthy rich with excitement, anticipation and newfound pride for what I could do with this new, never-seen-before object.
From Painters Van to Family Transportation Solution
If you go back through the history of business innovation, you can find these very distinct moments where an unidentified foreign object is placed into our hands, or in front of us as something to inhabit or experience. The moments have the potential to open our minds up to a variety of new, previously unimaginable possibilities.
Such was the case for Plymouth Voyager.
Back in the early 1980s, Lee Iacocca, the former chairman and CEO of Chrysler, got us to rethink what we could do with the existing form and shape of the van by creating what he called a “mini-van.”
Prior to Iacocca’s introduction of the minivan, the only people that had vans were construction workers, painters and a few hippies that converted their utility vans, at great expense, into shag carpeted mobile bachelor pads. But my mom wouldn’t be caught dead riding around in a “painter’s van” or a “bachelor pad van,” particularly with her innocent kids in tow.
The mere prospect that my mom would buy, much less drive a minivan around the neighborhood was totally unimaginable at the time, which may be why Henry Ford II laughed at the idea and dismissed Iacocca’s first initial sketches of the minivan concept while he was at Ford. So too did the focus groups.
Iacocca was eventually fired from Ford for other reasons and moved on to head up Chrysler (Plymouth and Dodge). He was allowed to take the minivan idea and designs with him. But like Steve Jobs, Lee Iacocca had a new vision for what we could do with the painter’s van that few people got. He saw it as the new station wagon, the new family-oriented transportation solution and the next big wave of the future in automobile innovation.
And he was right.
After some major adjustments and the addition of wood side paneling, families immediately embraced this new form and shape, and the minivan went on to become one of the biggest selling phenomenons in automotive history. And once moms everywhere saw it in person, they immediately knew what they could do with that thing.
The Predictable Forms and Shapes of the Retail World
Most of us know what a convenience store, gas station, drugstore, coffee shop and grocery store look like simply by looking at the form and shape of the buildings. These standard building typologies represent a very predictable form and shape in our world and therefore our conscious brain doesn’t need to pay too much attention to them as we go about our day.
When we see a building that looks like a gas station/convenience store on the corner of an intersection, we don’t have to think too much about what we can do there.
Our brains have been conditioned to know that we can fill up our car with gas, and run in to grab a soda, beer and/or a pack of smokes. However, we typically don’t expect to get handmade sushi, fresh organic vegetables or the best cuts of meat inside a gas station/convenience store, even though consumers would like to find these kinds of products in a small, format store. That idea is incongruous to what we think gas stations/convenience stores can do for us.
This fundamental assumption by consumers is part of the reason why gas station/convenience stores have such a hard time moving beyond just selling gas, sodas, beer and cigarettes. And this inability to shift the consumer’s mind to other product categories has executives at convenience stores nervous.
Because many in the industry believe these top selling items are all under threat by social activists, concerned parents and the government, and they might not be around as much in the future.
Not surprisingly, consumers also have very fixed and established assumptions about what a grocery store looks like and what we can do there. This is because the grocery industry has conditioned consumers for the last 50 years to think of the grocery store as a place to pick up products to restock their shelves.
For the most part, the industry has not focused on trying to get consumers to hang out in the store in a leisurely way, but to instead just help them get this weekly chore done quickly, easily and affordably. This made sense at the time because where else were consumers going to get this job done? All grocery stores had to do was worry about beating the competitor down the road.
But what if a new wave of outside players from the tech world have a better idea for how to get this weekly chore done faster, quicker, easier, cheaper and more conveniently than customers can do now at the traditional grocery store?
Or what if the big retail giants can figure out how to sell groceries cheaper with robots, cashier-less checkouts, wired up carts, free online delivery, etc? Well, these are the innovative ideas that the Silicon Valley tech-disrupters and retail giants are steadfastly working on as we speak.
Now Is the Time to Evolve the Meaning of Your Store
I’ve been working in the grocery industry for almost 30 years and we have gotten a lot of mileage out of the traditional grocery store format. But there comes a point in every industry where an initially brilliant idea reaches its upper limit of efficacy. This eventually happened to the game-changing Plymouth minivan, and the Razr cell phone. And it will someday happen to the iPhone.
The simple rule of business is that no great idea or market lasts forever. The key for consumer-based companies is to not hold on so rigidly to an existing form and shape forever, but to instead try to lift their existing concepts up to the next level of consumer relevancy, or, create an entirely new platform.
Razr had this opportunity, as did Blackberry, but they stuck with the existing form and shape at their peril, which allowed a complete outsider and novice like Steve Jobs to take that next innovative step for them.
While there are many areas of the traditional grocery store format and chassis that need to be totally re-imagined, one area I am particularly interested in is why grocery stores don’t capitalize more on the success of the form and shape of restaurants and bars.
If there is anything distinctive about our current consumer era, it is our love for and preoccupation with food, our endless need to photograph our meals, our habit of watching cooking shows and our intense curiosity to know where our food comes from, who made it and what techniques they used.
Our society’s intense interest in and focus on food is unlike anything we have seen in past generations, but grocery stores have not fully capitalized on this massive social phenomenon and cultural movement. Even though grocery stores are supposed to be in the business of food, we have let our fixation with the commoditization of food by the retail giants and tech-disrupters consume our attention and distract us from tapping into the emotional, social and cultural side of food.
Instead of trying to get customers in and out of the store as quickly, cheaply and efficiently as possible, we should be doing the opposite: creating stores customers want to hang out in on a regular basis…just like good restaurants and bars do everyday! This is not a random idea but where we see a large portion of consumers heading in the future.
Millennials and Food
As America’s largest population, millennials are entering their earning prime, with an estimated $1.3 trillion in annual consumer spending. Over the last decade or so, millennials have been the driving force to take premium food to the mainstream. For them, premium food is the minimum standard.
Who do these millennials look to to satisfy this taste for the high life? Restaurants and bars…but sadly, not grocery stores.
According to the U.S. Department of Agriculture, Americans spent more than half of their food budget – a staggering 54 percent – “eating out.” What this means is that for the first time in history, Americans spent more money at restaurants than buying actual groceries. What we are witnessing now is a major shift in the way Americans buy and eat food; and this trend is going to have a major impact on the value and relevancy of the traditional grocery store format.
Simply put, our patterns of behavior for buying food are changing, but grocery stores haven’t changed with it.
But hang with me here for a moment, because understanding this millennial food trend can get complicated.
The other big factor to note about millennials is their propensity to order food in versus eating out. More than half of that restaurant spending budget listed above is projected to be eaten off premise. This means millennials are buying a substantial amount of food from restaurants but spend half their time eating it at home or work. (The other half is at the actual restaurant venues.)
For millennials, eating in represents a part of the “good life” because they would much rather binge watch a series on Netflix or surf Instagram in their jogging pants than have to dress up for a formal dinner at a restaurant. While you would think grocery stores are in the prime position to benefit from this trend of eating in – with the fancy deli departments and large prepared food sections – millennial consumers aren’t buying it.
They instead prefer the credibility, authority and story that good restaurants and bars provide. Or in other words, they need the form and shape of restaurants and bars to tell them where the food comes from and what it’s about. They also want the distinctive cues and triggers and robust food philosophy that good restaurants and bars provide.
How can grocery stores capitalize on these emerging trends in food? By having key parts of your grocery store look more like a good restaurant and bar.
By learning how to dress, talk, act and send out the right food quality signals, just like a good restaurant and bar does. By not thinking about food as commodity, convenience and efficiency, but instead as experience and expression of life. By thinking about food as fashion, as culture and as social occasion. By thinking about food as discovery, learning and as a shareable moment to brag about.
I know this strategy works, because we have already been implementing this strategy in almost all of the new prototype stores we designed and built over the last six years for grocery store chains like Gelson’s Markets, Save Mart Supermarkets, Harvest Market, Freson Bros., and many others.
And what we have learned during our experiments of bringing in the form and shape of restaurants and bars into the grocery store arena is that once we get customers on the lot and in the store to participate in a more restaurant-esque experience, they tend to shop more, spend more, become less price-focused and more loyal and visit us much more frequently than they did in the past.
This type of consumer behavior is exciting because it allows us to shift and evolve the meaning of the grocery store from commodity, convenience and efficiency to the store as a place to visit, socialize in and hang out in regularly.
And this, we believe, is the best way for conventional grocery stores to sidestep the impending battlegrounds of the retail giants and tech-disrupters, while at the same time tapping into an emerging market opportunity that is more connected to how younger generations will buy and eat food in the near future.
This article originally appeared in Issue 6 of the 2019 California Grocer. Written by Kevin Kelley.