How Local Businesses Can Compete Against Wal-Mart’s Red Pickle

You might be thinking about why a local company would feel the need to compete against Wal-Mart’s red pickle. You’ve come to the right place to learn the answer. You see, it relates to one of their key principles to not only their current success, but their future success as well. To find out how the red pickle is important to their current and future success, I recommend first listening to the Planet Money podcast below.

If you don’t want to listen to this, I’m going to describe the key points below, but I think both Mitchell and Don would find the podcast interesting. OK, here’s why the red pickle captures a key principle for Wal-Mart’s business success. What Wal-Mart has discovered (and it seems Amazon has discovered this as well) is that selling groceries is critical to their business success. It’s critical because people need to buy groceries on a weekly basis (or close to it). When people go to Wal-Mart to buy groceries, they inevitably buy the other things that Wal-Mart sells, and this is how they sell more items and make a profit.

So where does the red pickle fit in? Wal-Mart has developed a food laboratory that will develop food that only Wal-Mart will sell. If the food items will also be in high demand, then this will draw people to the store, and will have the same impact that groceries have on the store–i.e., people will buy other stuff besides the unique food items. If I recall correctly, Wal-Mart started going in this direction to counter Amazon’s purchase of Whole Foods. Since Amazon seemed to adopting Wal-Mart’s strategy of selling groceries to sell all other items, Wal-Mart looked for an edge. Unique food products like the red pickle were part of that strategy.

This strategy got me thinking of the next way a similar business could get an edge, and that’s what I’m going to write about in this post.

If You Build It, They Will Come

The podcast turned my thoughts to two things that need support: local businesses and better community design. Here’s the gist of my idea. A local business like Foodland or Times Super market would really invest in good community design, for example, applying good design principles to a city block, making it a place that people really want to be around. Think of the great places in the world using principles that make those places attractive and alive. To make this work, I think Foodland would have to partner with other (preferably local) businesses–say, City Mill,
Longs (which may not be local, but whatever), restaurants, and retail. Ideally, office space, government services (like a post office), and housing should be integrated into this concept. Think of mainstreet as a mini-village, a kind of city terrarium. The goal would be to find the right mix of retail, office, housing and arrange them in way that creates economic synergy. My understanding is that there is a lot of research with strategic positioning of businesses in malls, and I’m thinking of applying the same principle here.

My theory is that people really have a hunger for well-designed places, and this is even more true in places that with a lot of bad design. Therefore, a well-designed build environment will draw people. Ideally, I’d like to make this as convenient and appealing for people who live within the community–integrating bike paths, street cars, etc. (That may go beyond the scope of what is feasible, at least for a business like Foodland.) Even without these transportation links, I think these places could allow the businesses in this place to compete against big box companies. If this mini-village is close to my house and I like hanging out there, I might end up buying more of things, even if they’re a little more expensive than Costco or Wal-Mart, at least for some of the items.

By the way, Safeway on Beretania (in Makiki) and Kapahulu are a few steps behind this idea. I think they’re actually copying Whole Foods, merging a food court and coffee shop with a grocery store. What I’m suggesting expands that, bringing in more types of businesses and entities and also taking it out of one building to the street, focusing on the design of all of these things. Maybe The Whole Foods way is more practical, as what I’m asking would likely require changes in zoning and more coordination with other businesses. (One idea I had: Have a developer like Bishop Estates oversee this, like they’re doing at SALT in Kaka’ako or even an entity like Hawaiian Homelands. I suspect that this is only good in theory, but I’ll just throw those ideas out there.)

Specific Details About the Design

If I did this right, I’d have renderings of the physical space, but that’s beyond my ability, so I’m going to have to describe some of the specific design ideas I have in mind. At this point, my ideas are rough, random , mostly products of brainstorming. Here is one idea: Imagine a split-level floor, with the sunken floor being in the middle and the elevated floor wrapping around it. Groceries, etc. will be on the lower floor, while chairs, food kiosks would be on the elevated floor. I’d also like to have book cases and magazines on the elevated floor–maybe having stairs going up to a 3rd floor ring with more books, chairs, and tables. Think of a library + cafe + food.

I’ll try to write about more later.

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