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Food Lion Uses Customer 'Clusters' to Drive Strategy
OCTOBER 31, 2009 --
Organizing its customer base into a number of individual “clusters” with specific characteristics is at the heart of Food Lion’s strategy that has seen creation of the chain’s new Bloom and Bottom Dollar banners to attract both upscale and price conscious customers, according to the company’s chief operating officer, Cathy Green.
“The days of same, same, same have become more dynamic and more complex,” Green told the Snack Food Association’s Management Workshop in Charlotte, NC September 23.
Bloom, with its 38,000 sq. ft. footprint is designed to appeal the “affluent bunch” cluster of customers, while the 19,000 sq. ft. Bottom Dollar stores are geared to the “Stretching Every Dollar” group. Each, along with Food Lion stores and a new acquisition, Harvey’s, a Georgia-based chain of 45 stores recently purchased by Food Lion, have their own specific brand positioning, product assortments, and levels of customer service, she said.
“Even training of employees depends on the cluster,” Green explained.
For example, Bloom is seen as “savvy, fun, optimistic,” while Food Lion’s characteristics are “neighborly, practical, dependable,” and Bottom Dollar’s are focused on “price with energy.” At Bottom Dollar, she said, “it’s all about saving money and having fun doing it.” Pricing is specifically designed to be 5 percent below Wal-mart in a “soft discount” format. At Harvey’s, which has grown to 70 stores as some Food Lion units in southern Georgia and Florida have been converted, the focus is on being a local, neighborly market.
“We are going through all of our stores to redo them according to the clusters,” she said. “We feel very, very bullish about what this will do for us in the future, reducing SKUs and making the stores very efficient.”
Broadening the company’s approach beyond the virtually identical footprint that had been common to every Food Lion store has enabled the company to attract a broad spectrum of consumers and has proven to be successful despite the current economic climate, Green said.
“When the day is done, we are going to be the trusted agent around all of these concerns,” she said. “We want to be the solution provider for every stage of your life, and we believe that on a macro level, this (approach) will help us get there. We have a purpose: profits will follow.”
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