Grocery Store Success Lessons For Product Managers

by drjim on August 10, 2009

Grocery Stores Can Teach Product Mangers How To Compete Successfully

Grocery Stores Can Teach Product Mangers How To Compete Successfully

The company has no extra money for advertising right now. Your travel budget has been spent so you’re going nowhere. Your competition is slashing their product prices in a desperate attempt to stay in business. Oh, and you are expected to boost sales of your product. Sound familiar?

As product managers we are tempted to look to our competition for guidance on what we should be doing when things get tight. However, maybe that’s the wrong thing to do. Instead, maybe this is when some of that “outside of the box” thinking might come in handy. Who could show us the way? Maybe a grocery store?

Welcome to Publix

Publix is a major grocery store chain in the southeastern U.S. They are especially strong in my home state of Florida – they seem to have stores everywhere. I don’t view them as being the cheapest place to shop, but they do seem to have just about everything so if I need a particular item, I’ll go to Publix.

From a business point of view, Publix is a well run company. It’s an employee owned company with 1,003 stores and 2008 revenue of $23.9B. Publix has the supermarket’s second highest annualized sales per square foot of $548. (Whole Foods, the high-end organic food store, has $820.) For the past 15 years Publix has ranked ahead of Kroger, Whole Foods, and Safeway in customer satisfaction. Not too shabby.

The Economic Downturn Hits Everyone – Including Publix

Just everyone else, global economic problems impact Publix just like everyone else. From a marketing point-of-view, this poses some real problems. Unlike the other player in town, Walmart, Publix is not “the home of low prices” and would probably lose it they tried to compete on that basis (sound familiar?). This means that they’ve got to try something else to keep people coming in and buying their products.

As a company, Publix’s simple philosophy stresses customer service. This focus is helping it through the current tough economic times. Customer service is not something that you can go out an buy, but when you are offering a “shopping experience” like Publix is, it can be very important. Quick question: do you know anyone who really likes shopping at Walmart – we all do it, but do we enjoy it?

Publix Product Manger Strategies

Great customer service sounds like something that we’d all like to have, but just how does a product manager go about making that happen? Here’s what Publix is doing to stay competitive:

  • They are staying at full staffing levels and lowering prices in hopes of keeping their existing customers and attracting new customers.
  • Realizing that they can’t avoid the product cost issues, they have just launched Publix Essentials a program that lowered prices by as much as 20% on staple items such as milk, bread, and laundry detergent. This gives their customers an excuse to continue coming to their store instead of going to Walmart.
  • Next, Publix has started programs to suggest meal plans to help customers stay within a budget.
  • Publix has resisted cutting back staff in order to offer its customers faster service times.

Final Thoughts

Although you probably don’t control staffing levels at your company, you do have the ability to make a case for having the company focus on customer service for your product. Even if you don’t have the budget left to add more features or roll out a new product line, you can work internally to improve how you support your current customers – and they will end up doing your advertising for you.

Customer service is important now and will only become more important than ever as more companies enter your product’s marketplace. If you can use this “quiet” time to improve the level of customer service that comes with buying your product, then you will have found out how great product managers make their product(s) fantastically successful.

Questions For You

What do your customers currently think about your product’s customer serivice? Do they complain? Do they complement? Do you know the people in your company who provide customer service – do they know you? What one thing do you think that the company could do to improve your product’s level of customer service? Leave me a comment and let me know what you are thinking.

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What We’ll Be Talking About Next Time

As a result of attending ProductCamp NYC I’ve been asked a lot more questions recently about how Product Mangers can avoid making mistakes with their products. Half of that answer is to make sure that you understand the fundamentals of Product Management. The other half is to learn from the mistakes of others. Like the big mistake Pepsi made when they tried to change their Gatorade product…

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{ 1 comment… read it below or add one }

josh duncan August 12, 2009 at 9:02 pm

Great points and an excellent example of staying the course during a tough market. However, I think this one is tough for a product manager to influence.

Customer service really needs to be a corporate strategy, right? It can be complemented at the product level, but hard to rise above the direction of the firm.

Josh

Thanks,

Josh

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