By David Weinberger
As consumer expectations continue to evolve, brick and mortar retailers are elevating experience. Clearly. They are not only fighting for your attention and your dollars. They’re also fighting for your stomach.
Retailers understand that they have to offer more than just goods and services in order to thrive. Consumers are perfectly comfortable skipping trips to the store, and ordering online has become common behavior. To combat this, some retailers are adding entertainment value as a means to draw consumers in. Increasingly, however, retailers are adding some form of strategic foodservice in order to attract and retain customers and keep them satisfied. What’s that old saying about a way to a man’s heart?
There are three reasons to add foodservice to a store:
1. To increase foot traffic
Seems obvious, but foodservice can give customers a reason to walk in, and a reason to stay longer. Barnes & Noble Cafes featuring Starbucks beverages are a great example. Teaming with a branded partner can make a lot of sense and give people a reason to come to you. With coffee in hand, customers are more likely to browse the store and make a purchase.
2. To create incremental revenue
Creating this new source of revenue is possible if you are really in tune with your customers and understand their shopping habits. Equinox fitness clubs recognized that after a workout, many gym-goers immediately grab lunch or a smoothie. Instead of sending them on their way to find nourishment off the premises, Equinox leases space to operators who deliver healthy, high-protein options right in the club. They’ve made a conscious decision to not take on the job in-house. They are sticking with what they know — fitness — and making money from the third party. Whether being led by an in-house team or a third-party vendor, it’s the consumer who benefits.
3. To extend visit time
This means keeping customers in the store longer and spending more money, which can be done in several ways. You could argue that the Barnes & Noble Cafe does this during quick shopping sprees, but let’s also look at longer trips. Large department stores such as Nordstrom and Selfridges are adding integrated dining experiences to offer opportunities to break up the shopping day and keep people on-site rather than go out for lunch (and potentially not come back). Extending in-store time can also come from offering a diversion to family members of your customers. Retailers like Pep Boys have recently added lounges to their new stores. And Bob’s Discount Furniture has a complementary cafe with coffee, ice cream, cookies and candy. In this case, parents have more time to browse for living room sets while Bob’s is keeping the kids from jumping on the couches.
Before taking on any foodservice offer, you must also realize that ancillary issues will arise, and there are elements of the new offer that you must be aware of. You now have new electrical and refrigeration needs, health and safety issues. Spoilage and sanitation. Layout. Operations. Ventilation. Look at your bathrooms — consumers won’t trust you for anything food related if you don’t have clean bathrooms. Operationally, do you think you can handle it? Just keep in mind — there is risk here.
So should every retailer clear out a few hundred square feet of merchandise and set up a restaurant? You better understand your customer first. Knowing exactly who they are through a customer segmentation study is key. Understanding what they are looking for and what they are open to is also vital. It may take some research and help to really understand what customers are doing immediately before and after they walk into your store. However this type of research can help determine whether foodservice will be a success or failure.
If all of your ducks are in order, try a pilot location and see how it goes. Are your employees able to handle it? Are consumers responding? Be honest with yourself and don’t bite off more than you can chew. If you can’t get drip coffee right, don’t bother with shrimp scampi.
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