Thursday, January 20, 2011

Localize Your Merchandise

A few years back, the word on the street in St. Louis was that if your retail business sold beer, the more Anheuser-Busch labels you carried, the better. Selling Bud, Busch, Michelob, and Natural Light was better than selling only Bud, since it showed local loyalty to a major St. Louis employer and donor. Anheuser-Busch, America’s largest brewing company, had been headquartered in St. Louis for more than a century and a half.
     Then toward the end of 2008, InBev bought Anheuser-Busch to form the world’s largest brewing company, with operations in over 30 countries and sales in over 130 countries. Now the word on the street was that the populace of St. Louis, Missouri found it tougher to view Bud as a local brand made good. Adding to the alienation was how the company fired about 1,000 employees from the St. Louis area a few months after the takeover, during the Christmas holiday season.
     As a recent Bloomberg Businessweek article points out, beer retailers wanting to portray local connections reacted by adding more Schlafly Beer, brewed only in St. Louis. Now about 2,000 taps serve Schlafly, a climb of more than 30% in the past two years. Now the number of concession stands selling Schlafly at Busch Stadium is eight. Last season, there was one stand.
     Small to midsize retail businesses carve out a marketing advantage when they carry local brands. A while back, Stop & Shop and Giant Food announced that Starbucks kiosks in a number of the stores would be replaced with Dunkin’ Donuts, whose home is Canton, Massachusetts. That’s much closer to the Stop & Shop/Giant stores than Starbucks, which although often seeming to have a presence on every street corner in the world, is most strongly associated with the aroma of Seattle.
     Keeping it local is an objective of large retailers, too. Wal-Mart gives a bow towards the neighborhood with their Local Supplier initiative. And last time I checked, McDonald’s in Bangor, Maine offered lobster sandwiches, but in my California hometown, that slot on the menu board is taken by burritos. If your shop—McDonald’s or not—offers hamburgers in Pittsburgh, you'll sell more potato chips when you stock local favorite Utz than when you stock only Frito-Lay, even though Frito-Lay makes the best selling potato chips in the U.S.
     Carry world-renowned brands, but also carry plenty of brands that themselves carry local pride.

Click below for more:
Give Your Retailing Local Quality
Brag About Your Retailing Humility
Feature Underappreciated National Origin Products

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