SHOPPING: SO MANY STORES, SO LITTLE TIME

Virtually everything about shopping has changed. From the early 1990s until the present, the number and range of our shopping choices have exploded. Just look around your town. Where there used to be a couple of shopping areas clumped together in defined shopping districts, today there are minimalls, strip centers, and freestanding stores on almost every corner. Shopping options are everywhere and continue to grow and expand.

Even while stores and shopping centers are multiplying exponentially, our ability to shop from the comfort and convenience of home has also mushroomed. Just about any consumer good you can think of can be purchased over the telephone or via the Internet. A review of retail sales by type of store in 1992 and 2002 provides insight about the winners and losers in retail shopping. Total percentage change in retail over the period was 77 percent, from $1,275 billion in 1992 to $2,257 billion in 2002. An index based upon the average percentage change shows how much faster or slower the particular type of store's results were com-pared to the average, as shown in Figure 5.2.

Retail Sales by Type of Store, 1992–2002 in billions, excludes motor vehicles, gasoline, and food service
	1992	2002	% CHG '92–'02	INDEX
Furnishings and electronics	$ 97.8	$ 198.6	103.1	134
Building and garden	160.2	323.1	101.7	132
Food and beverage	371.5	508.5	36.9	48
Health and personal care	90.8	191.6	111.0	144
Clothing and accessories	120.3	178.6	48.5	63
Sporting goods and hobby/books	49.3	81.5	65.3	85
General merchandise total	248.0	476.1	92.0	119
Department store	177.1	217.9	23.0	30
Other general	70.9	258.3	264.3	343
Miscellaneous stores	55.8	105	88.2	114
Nonstore	81.3	194	138.6	180
Total retail trade	1,275.0	2,257.1	77.0	100
Source: Census Bureau

Figure 5.2: Total Retail Trade in Millions

Among the biggest winners from 1992 to 2002 were nonstore retailers, which includes the Internet, direct mail, mail order catalog, and television shopping. The nonstore retailing segment more than doubled revenues during the previous ten years and grew 80 percent faster than the retail average (e.g., index of 180). Furnishing and electronics stores also were big gainers, growing 34 percent faster than the average, along with building and garden retailers, up 32 percent more than average, and health and personal care, increasing 44 percent more than average. But the fastest growing retail segment were the other general merchandisers, warehouse clubs, and all the other general merchandise stores (Wal-Mart, Costco, Sam's Club, and all the rest), which increased by 2.5 times faster than the retail average.

Virtually everything about shopping has changed.

So how are consumers responding to such far-reaching changes going on in the retail marketplace? Because shoppers are shopping less and less out of need, and more and more out of desire, and they have more and more choices in where and how they shop, the mental checklist they use to decide where to go for their particular shopping objective has fundamentally changed. Going shopping is no longer a question of what product do I need and where am I likely to find it. Rather because consumers can find the product—any product—they need in so many new and different places, the shopping equation is reduced to one thing: What kind of shopping experience do I desire? Shopping today has shifted at its very core; shopping is no longer about the thing, but about the experience.

And the experiences they want in shopping have expanded and diversified as much as the particular shopping choices have. Do I want a luxury shopping experience, where I am pampered and waited on? Do I want a discount shopping experience, where I get the experiential thrill of finding something great for less? Do I want an efficient shopping experience? Do I want a convenient shopping experience? Do I want a fast shopping experience? Do I want a browsing, leisurely shopping experience?

Shopping is no longer about the thing, but about the experience.

For me as a shopper—and I think I am pretty representative of many women my age who work and have a family to care for—the shopping experience I want 90 percent of the time is one that is efficient, easy, simple, and fast. I am not a discount, coupon-clipping shopper. That takes too much time and effort. I am always willing to trade off more money for less hassle. But with the Super Wal-Mart store five miles from my house, I don't have to do that. I can get my groceries cheap at the same time I maximize efficiency. I know people who won't shop at Wal-Mart on principle. For me, principles be damned, I have so little time in which to shop I want it as quick and painless as possible.

Thus, we have three different shoppers with three different priorities and they all end up at the same place: a discount department store.

Other women, so many of whom I see in focus groups, are driven to buy things at the lowest price. Their mental arithmetic is very different from mine. They are willing to trade off time for savings and will drive an extra half-hour to save a few dollars. And where do they shop? They shop at the same Wal-Mart store where I shop.

Other women are just born to shop, and I see lots of them in the luxury focus groups I do. They live and breathe to shop. They spend their spare time browsing the stores, seeing who has what and at what price. While they can pay full price, they measure their success at the shopping game through the amount of money they save. They are the type who will take their weekly shopping list and go from butcher to baker getting the very best of everything. Then they will go to Wal-Mart or Costco to get everything else. Thus, we have three different shoppers with three different priorities and they all end up at the same place: a discount department store.

In terms of the 37 product categories researched here (see Figure 5.3), discount department stores are the most widely chosen shopping source for 18, or about half, of these products. For the remaining 19 product categories where discount department stores are not number one, discount department stores are the second most popular source in 15 categories. In other words, for 90 percent of all the discretionary products researched here, discount department stores are either the number one or number two shopping source.

	SOURCE # 1	SOURCE #2	SOURCE #3
Entertainment, Recreation, and Hobbies
Audio equipment and stereo systems	Electronics/ Appliance	Discount Department Store	Nonstore
Books, magazines, and newsletters	Sport/Hobby/ Book/Music Store	Discount Nonstore Department Store
Computers and software for home use	Electronics/ Appliance Store	Discount Department Store	Nonstore
Crafts, sewing, knitting, and needlework supplies	Discount Sport/Hobby/ Department Store	Book/Music Store	Other Specialty Store
Musical instruments	Sport/Hobby/ Book/Music Store Store	Other Specialty	Nonstore
Pet accessories	Discount Department Store Store	Other Specialty	Food and Beverage Store
Photography equipment and supplies	Discount Department Store	Electronics/ Appliance Store	Nonstore
Prerecorded video, music, DVD, etc.	Discount Department Appliance Store	Electronics/ Store	Sport/Hobby/ Book/Music Store
Sporting goods, exercise equipment, and supplies	Sport/Hobby/ Book/Music Store	Discount Department Store	Traditional Department Store
Toys, games, and dolls	Discount Department Store	Other Specialty Store	Traditional Department Store
TVs, radios, VCRs, DVD players, etc.	Discount Department Store	Electronics/Appliance Store	Traditional Department Store
Home and Home Décor
Aromatherapy and scented household products	Discount Department Store	Traditional Department Store	Other Specialty Store
Arts, prints, and lithographs	Furniture and Home Furnishings Store	Discount Department Store	Other Specialty Store
Baskets, boxes, vases, pots, and decorative holders	Discount Department Store	Traditional Department Store	Home Improvement Store
Candles and candle accessories	Discount Department Store Store	Other Specialty	Furniture and Home Furnishings Store
Christmas decorations and other seasonal decorations	Discount Department Store	Traditional Department Store	Other Specialty Store
Collectibles	Other Nonstore Specialty Store		Discount Department Store
Figurines and sculpture	Other Specialty Store	Traditional Department Store	Discount Department Store
Florals and greenery for indoor use	Home Improvement Store	Discount Department Store	Other Specialty Store
Flowers, seeds, shrubs, and trees for outdoor landscaping	Home Discount Other Improvement Store	Department Store	Specialty Store
Furniture and occasional furniture	Furniture and Home Furnishings Store	Discount Department Store	Traditional Department Store
Garden equipment and decorative items for garden and patio	Home Improvement Store	Discount Department Store	Traditional Department Store
Greeting cards and personal stationery	Discount Department Store	Food and Beverage Store	Other Specialty Store
Home textiles and rugs	Discount Department Home Store	Traditional Department Store	Furniture and Furnishings Store
Kitchenware and accessories	Discount Department Store	Traditional Department Store	Other Specialty Store
Lamps and lighting accessories	Discount Department Home Store	Traditional Department Store	Furniture and Furnishings Store
Picture frames	Discount Department Store	Traditional Department Store	Other Specialty Store
Tabletop china, crystal, silver, sterling flatware, and other dinnerware	Traditional Department Store	Discount Department Store	Other Specialty Store
Wall décor, such as sconces, mirrors, shelves, and tapestries	Furniture and Home Furnishings Store	Discount Department Store	Other Specialty Store
Window coverings, blinds, curtains, and other window treatments	Discount Department Store	Traditional Department Store	Home Improvement Store
Personal Luxuries
Fashion accessories, such as handbags, wallets, belts, shoes, etc.	Traditional Department Store	Discount Department Store	Clothing Store
Infant's and children's clothing and apparel	Discount Department Store	Traditional Department Store	Clothing Store
Jewelry and watches	Traditional Department Store	Clothing Store	Discount Department Store
Men's clothing and apparel	Traditional Department Department Store	Discount Store	Clothing Store
Personal care products that are more "special" or "exclusive" than everyday brands	Discount Department Store	Health/Drug Store	Traditional Department Store
Teen and tweens clothing and apparel	Traditional Department Store	Discount Department Store	Clothing Store
Women's clothing and apparel	Traditional Department Department Store	Discount Store	Clothing Store

Figure 5.3: Where People Buy Things They Don't Need

While more and more consumers turn to discount department stores to shop for life's extras, the Internet is becoming more important for many consumers. For these shoppers the Internet delivers a shopping experience that they crave. Out of the 37 product categories researched in this book, there are 7 where more than two out of ten shoppers are likely to buy through the Internet. The high-incidence Internet product categories include: books, magazines, and newsletters (32 percent); computers and software for home use (30 percent); women's clothing and apparel (29 percent); collectibles (28 percent); musical instruments (24 percent); prerecorded video, music, DVD (23 percent); and teen and tween apparel (21 percent). Among the Internet's key experiential advantages are the convenience of shopping at home and the ability to easily compare prices. While many consumers remain concerned about sharing their credit card numbers over the Internet, shoppers are increasingly shopping across media. For example, they might comparison shop online then go to the store to make the actual purchase. Or they might visit stores to touch-and-feel specific branded items, then go home to get the best price online. Figure 5.4 lists the percentage of items not purchased in traditional retail stores.

	NONSTORE
Entertainment, Recreation, and Hobbies
Audio equipment and stereo systems	13%
Books, magazines, and newsletters	32
Computers and software for home use	30
Crafts, sewing, knitting, and needlework supplies	15
Musical instruments	24
Pet accessories	8
Photography equipment and supplies	15
Prerecorded video, music, DVD, etc.	23
Sporting goods, exercise equipment, and supplies	13
Toys, games, and dolls	15
TVs, radios, VCRs, DVD players, etc.	7
Home and Home Décor
Aromatherapy and scented household products	12
Arts, prints, and lithographs	8
Baskets, boxes, vases, pots, and decorative holders	13
Candles and candle accessories	13
Christmas decorations and other seasonal decorations	11
Collectibles	28
Figurines and sculpture	18
Florals and greenery for indoor use	5
Flowers, seeds, shrubs, and trees for outdoor landscaping	6
Furniture and occasional furniture	7
Garden equipment and decorative items for garden and patio	7
Greeting cards and personal stationery	15
Home textiles and rugs	9
Kitchenware and accessories	10
Lamps and lighting accessories	10
Picture frames	6
Tabletop china, crystal, silver, sterling flatware, and other dinnerware	12
Wall décor, such as sconces, mirrors, shelves, and tapestries	8
Window coverings, blinds, curtains, and other window treatments	7
Personal Luxuries
Fashion accessories, such as handbags, wallets, belts, shoes, etc.	17
Infant and children's clothing and apparel	14
Jewelry and watches	17
Men's clothing and apparel	18
Personal care products that are more "special" or "exclusive" than everyday brands	11
Teen and tweens clothing and apparel	21
Women's clothing and apparel	29

Figure 5.4: Where People Buy Things They Don't Need

Among the Internet's key experiential advantages are the convenience of shopping at home and the ability to easily compare prices.

Shopping today has fundamentally changed. It is no longer about the thing, but the experience. Every shopper has different experiential expectations and to make it even more confounding they have different experiential expectations at different times and under different circumstances. Store-based retailers are like spiders spinning a web trying to trap shoppers and draw them into their store. Too many retailers make the mistake of thinking that the primary snare to draw the shopper in is the things they sell. Sometimes that may work, but less and less so. Rather they need to spin a web of experience, communicate the experience, and use that as the primary draw to attract shoppers into the store.

Getting It Right

BUILD-A-BEAR

It's all about the experience.

Back in 1997 during the heady days of the Beanie Babies phenomenon, Maxine Clark figured there had to be some creative retailing opportunity based upon the universal attraction between kids and bears—teddy bears, that is. While Maxine had an impressive retailing résumé including being named one of the "30 Most Powerful People in Discount Store Retailing" by Discount Store News in 1995 and serving more than 25 years with the May Department Stores Company, most recently as president of May's Payless Shoe Store chain, she knew she couldn't go it alone in the new business venture she was conceiving. So she looked around and got the very best toy consultant she could find, her ten-year-old friend Katie. Together in one night they created a business plan and Build-A-Bear Workshop was born.

For Maxine the road to Build-A-Bear started in her own childhood. "Back when I was growing up, going shopping was a really 'big thing.' There were no malls, so when you went shopping, you got dressed up and went downtown. There was magic in the shopping experience back then and I wanted to re-create that feeling for kids today," Maxine says.

Since its founding, Build-A-Bear has grown to 151 stores in the United States, including four locations in Canada. The industry has taken notice by naming Build-A-Bear Workshop the International 2001 Retail Innovator of the Year. With sales expected to be $200 million in 2003, the company has just opened its first international shop in England with plans to franchise the concept overseas in Korea, Japan, and France, among other countries. Explaining the growth strategy, Maxine says: "Ours is a really unique retailing concept that appeals to the 'kid' in all of us. People love teddy bears and they also love the bear-making process.

The bears are free; you only pay for the fun of creating them.

"We've taken the plush business to the next dimension. We designed personalization and customization of our bears into the core of our business concept. That makes it very hard for other people to imitate or copy us," she explains.

In today's discount-driven shopping environment, Build-A-Bear has mastered the price/value equation. "Our basic bear costs between $10 [and] $25, and that price hasn't changed since we first opened. That includes the unstuffed animal 'skins,' the stuffing that you select the thickness of, the heart you put into the bear with a wish, the birth certificate where the child names his or her bear, and the 'cub condo' box that is used to transport the bear to its new home. The only thing[s] a la carte are the clothes, shoes, and accessories that we call 'bearphernalia,'" Maxine says.

So the price is right, but in reality you really aren't buying the bears at all, as one of Maxine's customers pointed out: "The bears are free; you only pay for the fun of creating them." Thus the experience building a bear is like the price of an admission ticket to Disney World, and what you "really" pay for. The teddy bear you create in the Build-A-Bear store becomes a tactile reminder that connects you with the memories of a special day. "Kids are wonderfully creative and parents and grandparents happily pay for the experience of their kids creating something really special and meaningful to them. We want our stores to be truly fun places for children and their parents. I think we have done that by all the letters I read. It's a priority for me to stay in touch with the customers by reading and responding to their mail and e-mail," Maxine explains.

One of the secrets of Maxine's success in Build-A-Bear Workshop is she has kept the company firmly 'kid-centric.' She holds the opinions of kids as so fundamental to her company's mission that she has recruited an advisory board made up of 20 children ages 6 to 14. "Our Cub Advisory Board personally reviews all the animals, clothes, and new products. They keep us focused on their priorities and issues. We don't do anything without getting their input," Maxine says.

Maxine's got big, bold plans for the Build-A-Bear Workshop that extend far beyond the store concept. "Very early in my career I discovered the power of licensing, where one plus one equals ten, not just two. It's about taking something wonderful and extending it even further than you ever expected," she says.

For starters, they have teamed up with Evergreen Concepts, a Los Angeles, California-based licensing management firm to license books, calendars, greeting cards, and gift products featuring Build-A-Bear characters. They have a unique licensing arrangement with shoe retailer Skechers to cobrand a line of bear shoes. They also have just announced a deal with Hasbro to take a line of unique-sized stuffed animals, clothes, and accessories to major toy retailers, thus extending their offerings beyond their current chain of stores. Hasbro will also develop other products that extend the Build-A-Bear Workshop brand and associate them with Hasbro's iconic brands as well.

Maxine concludes, "For me this business has never been about the money. I love the industry and love the creativity that children demand. It's been a business driven solely from the heart." She proves that day in and day out in the charity efforts and good works that the company does. For example, they invited shoppers into their California stores to build a bear for the kids who lost their homes in the recent wildfires. "We try to make a difference in people's lives," she explains. And it shows in the company's success and Maxine's continued passion for the brand that she and her team of kid consultants have created.