October 25, 2013

Echochamber searches for global store ideas

Matthew Brown, Head of Research, Echochamber Ltd. (photo: LZ-Archiv)
Matthew Brown: "Generosity pays in retailing"
Matthew Brown, Head of Research at UK-based management consultancy Echochamber Ltd., has a great job. Together with business partner Howard Saunders, Brown tours the world around twenty times a year looking for interesting new store concepts, ideas and trends.

Tracking him down with difficulty, our newspaper sounded this professional globetrotter out on his relentless search for best practice intelligence. The result: A tour d'horizon of international retailing ranging from Loblaws in Canada and Tesco's brand new hypermarket format in Watford/UK to Metro Group's future store in Germany.

But big for Brown isn't always beautiful, and the small guys also get a mention when they do a good job of delighting the consumer. Thus we also hear about the gastronomic delights of Eataly, Victor Churchill, a traditional butcher's shop in Sydney, or Caribbean-inspired Hotel Chocolat.


Mr. Brown, you travel the world in search of top retail concepts. So what is best self-service food retailer in the world?

At the moment it's Loblaws in Toronto.

You didn't have to hesitate for long on that one. Why?

It’s just lovely and combines all the important trends in one concept. The design is excellent, they have a proper artisan bakery and butchery, a cookery school, chefs preparing food where you can see everything happening. Eating is right at the heart of the store.

So what are the most important trends that Loblaws is serving?

The most important trend is what we call 'anti-big'. People don’t like large supermarket chains any more, they think they’re boring, always do the same thing and look the same everywhere. Customers want something unique and original as in small artisan stores.

But isn't Loblaws a big box store operator, too?

Yes, but in Toronto it doesn’t look like one. The design is unique and it even has a small artisan vibe.

Is this what big store operators should do: look like they were small?

This is a possibility. Starbucks has developed an anti-big strategy over the past five years. Now they have unique concepts for different locations: In Seattle they did a drive-through coffee shop made of shipping containers; in Amsterdam they are located in an old bank; and in Tokyo they did a pop-up store that was designed like a library.

What about food retailers?

The biggest news in food retail in the UK this year was that Tesco launched a brand new format in Watford and put artisan food at the heart of the concept. Instead of having just an ordinary café they have Harris+Hoole, a small independent coffee shop with staff with beards and tattoos.

They look like they are part of the hipster food revolution that is happening around the world. Tesco has also integrated a small artisan bakery and put a good quality restaurant into the shop.

What is so new about putting concessionaires into shops?

Big players are taking over small artisan shops and integrating them into their concepts. In the old days big companies would copy small independents in a bad way, the outcome was terrible and everyone hated them.

But now Tesco is saying: These guys are doing a great job, we can’t compete with them, so let’s bring them into our stores.

Has this also something to do with consumers trusting the small guys more than the big guy?

Well, there was the horsemeat scandal, along with many other scandals. Every week there is another big scare story about food in the media. It is either bad for your health, killing the planet or unethical.

On top of that, people hear that retailers treat their suppliers badly or that they don’t allow their staff to join unions. Customers are more concerned about these issues than before. Therefore retailers have to prove that they are trustworthy.

How can they do so?

One answer is provenance. Customers are asking: “Where do the eggs you sell come from?” You should at least say they come from such and such farm in a certain country.

But even better would be: “They come from a rare breed of chicken, we feed them on only the best corn, and they range free.” You could put up a webcam and show live footage of them. The more detail you show, the more the customer believes you.

Can you give a practical example?

In Metro Group’s future store they have TV screens above the packaged meat that show you how the pigs are being farmed and how the ham is produced. You could even go further and show how they are being slaughtered.

But surely no one wants to see pictures of animals being killed when they buy meat?

This was one of the big retail truths for many years, but it is not true anymore. The food movement is so much into provenance that people feel it important to see animals being slaughtered in order to get closer to food production.

They even re-discover unpopular parts of animals. This is linked to the ethical movement of food, of not wasting creatures but valuing them.

But aren’t such people just a small minority?

They drive trends. Twenty years ago only some foodies cared about good quality coffee and people laughed at them. But now everyone takes a good cup of latte for granted, it is totally main stream. It will be the same thing with ethical food.

But enjoying coffee is not the same thing as caring about animals?

People around the planet are worried. They are much more concerned about food now than they used to be, they are aware of nutrition, ethics, sustainability. The health movement is growing massively.

If you are a retailer and you think all of that is nonsense, you might find your business becoming a little bit difficult in the future.

Have processes become more important than design? What about the 'push for posh' trend towards top quality stores you used to see?

It is still there, supermarkets still have to invest in design. In my view Loblaws has kind of re-started the trend after a long period when the big retailers around the world were focussing on price. But anyway it is always about basic human needs. If a supermarket doesn't fulfil them, design is irrelevant.

If trust is such a basic need, then you must like open bakeries and butcheries?

Yes, they serve the trend towards transparency: The customers want to see food being produced so they can trust it.

My favourite example is a traditional butcher shop called Victor Churchill in Sydney. It has been in the design press around the world as it looks like a jewellery shop with a marble floor and a wall of back-lit Himalayan rock salt.

But the point is that the salt is in a glass box, dry-ageing the beef, and people can watch the process as well as the butcher working. Transparency is the essence of the concept.

But don’t a lot of retailers now do this?

Unfortunately there are still many supermarkets that don’t. They might have an artisan bakery or a restaurant kitchen, but they hide it behind a wall. I ask every retailer: Why are you not showing everything you do? We all want to see it.

Is this part of the trend you call 'prove it'?

It’s no longer enough for a retailer to buy products from a manufacturer and put them on their shelves. That’s boring. For a retailer nowadays it’s all about proving that you’re an expert and telling and showing your customers that you know all about food.

One way to do that is to tell your customers what you do, i.e., communicate a lot; and the other way is to show them.

Who is doing a good job of this at the moment?

My favourite example is Hotel Chocolat, a UK company that is expanding across Europe. They have bought the Rabot Estate, the oldest cocoa plantation in St. Lucia in the Caribbean.

They grow their own cocoa beans there and run the world’s first eco-chocolate hotel where guests can help pick the beans and chefs cook amazing stuff with it.

In their shops in Europe you can watch them roast the beans and make the chocolate, you can taste it in store and the staff will tell you the whole story about it. This is really exciting food retail, and this is where the revolution is happening.

Can you give some examples of bigger retailers?

Wholefoods are great at 'prove it'; they make their own sausages and dry-age the beef in-store. Eataly is amazing, you can watch the Parma hams ageing and the chefs cooking as every department has its own spot to eat.

No names from Germany?

There are very good retailers in Germany, but in continental Europe as a whole, there is very little happening in terms of groundbreaking concept design and there are very few really amazing shops compared to Asia, the US and the UK. I really don't know why. Maybe the rest of the world is more prepared to invest.

Why are you such a fan of Eataly?

They are best at a trend we call 'Einstein Time'. People enjoy being there so much that time becomes relative to them and they find themselves staying longer there than they had originally planned. Eataly slows people down brilliantly.

Every department has a food counter where you can stop and eat: the butcher’s, the fishmonger’s, the bakery, the pasta bar. And, of course, you can talk to the experts. As a result people forget about time, they enjoy being there instead of saying: "I hate shopping, let’s just do it on the internet."

Talking about the internet: Is that the biggest challenge for stationary food retailers?

Well, in Germany the market is not yet as developed as in the UK. But basically the internet is a revolution because you do not have to visit a shop anymore for anything. You can get absolutely everything you need delivered.

What does that mean for a supermarket? Your customers don’t need you anymore. If retailers want us to keep coming to their stores, they have to get back to the old secrets of the street market: amazing visual merchandising, touch, taste, smell, eating. The customer should get the feeling of becoming part of the world of food.

In order to give them that feeling, should retailers teach their customers how to cook?

Sure, a lot of trends are dynamic. First, people wanted to know where products came from -- that was provenance. Then they said: "Don’t just tell us, show us" — that was 'prove it'. And now they are saying: "Let us get involved, show us how to make it ourselves" -- that's 'do it yourself'.

And retailers are doing it. Waitrose has a cookery school in one of their stores, Loblaws in Toronto has one, and the French bakery chain Paul teaches you how to bake bread inside a store in London’s Covent Garden.

Can that really pay for the retailer? Do customers really participate?

These things don’t always work brilliantly from an economic perspective, and only a small number of customers will take part. But these things say a lot about the brand to all customers.

Even if you haven’t made the bread yourself, a friend of yours did and he or she posts it on Facebook, so you are going to look at that shop in a different way. You will think: “Wow, they really know what they’re doing!”

Aren’t such ideas really only for top-notch supermarkets?

A lot of what I’m talking about is expensive. But my key thesis is: To survive in today’s retail world, you either have to be the cheapest — which is fine if you think you can compete with Aldi and Lidl — or you have to be an expert. Otherwise, why would anyone want to shop with you? They can get everything everywhere else.

Do your tips and trends have one central tenet?

Yes, if you want to be a good retailer, be passionate, be an expert, and be generous.

Generous? Isn’t retailing about making money?

If a technology retailer displays mobile phones on retractable wires, they are basically telling you: You’re a thief, and we don’t trust you.

And then Apple comes along and links all its products to the internet, you can use them for free, and they never tell you to go away. Apple is now the most profitable retailer in the world. Generosity pays.

Related article in German: Lebensmittel Zeitung, no. 43, 25.10.2013, by Mathias Himberg

Comments for this article are closed.

  1. Created 25 October, 2013 18:49 | Permanent link

    Well, if you want to save on all those travel expenses, a subscription to "Monocle" magazine will deliver very similar commentary to that set out above. The latest October issue is a case in point -- check out the promotional video here:

  2. Dani
    Created 14 December, 2013 02:28 | Permanent link

    Mr. Brown has missed the opportunity to explore a gem of stores called Pusateris that has been bringing unique products, artisans, farmers from everywhere in the world (Italy a major brand) for over 30 years.

    Each location has a unique feel and look, quality is what was always the success when we had no variety or offering of such in the 60s/70s and till not long ago in Canada.

    In a true boutique and emporium style, the essence of a village is displayed.
    Meat, produce, hot dishes made in each location by qualified chefs and sous-chefs have been available in the Canadian market long before any box corporate did it.

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