Pink Is In.

It’s pink this year. This is the role of the buyer in retail organizations as we discussed in class today. Buyers play an important role in ensuring that the retailer’s stores are stocked with relevant products that are in demand for that season or year. This is not only true in the apparel category that we were discussing in class today but throughout the retailing world.
At Loblaw Companies Limited, buyers make up an important asset. As we saw in the Sunrise case, buyers in the grocery business have to ensure that they have the right selection of foods, and the right quality and freshness. At Loblaw, these buyers do not only purchase for the Loblaws grocery banner, but for all of the company’s banners such as No Frills and the Real Canadian Superstores which carry differing degrees of variety and breadth of groceries and general merchandise.

We have previously discussed the threat of Wal-Mart’s expansion into the fresh grocery market with its super centers. As a result of this threat, Loblaws has attempted to move into greater retailing of general merchandise within not only these superstores but also in its other banners, especially the flagship Loblaws. With this shift in strategy, these buyers become even more critical.

Many critics have been skeptical of this shift in strategy, questioning whether Loblaws customers actually want this type of merchandise from their retail locations, or whether they even associate Loblaws with this type of general merchandise. On the other side many have pointed towards to the success of Loblaw’s supercentres in Western-Canada to show there is market potential for general merchandise retailing from a grocery retailer. However, I think it’s not just the overall strategy that needs to be looked at, but the overall implementation. This is where I see a large problem going forward. In 2005 when Loblaw moved about 2000 of its employees from across Alberta and Ontario to its Brampton head office, only about half of the company’s general merchandise buyers made the move. In class today we recognized the intellectual property within each of these buyers. The case today even mentioned how it had taken some time for the Forzani Group to re-establish its strength in its buyers after losing them during relocation. With the shock of losing half of their buyers, I don’t believe that Loblaw’s will be successful in their strategy of expanding their offering into general merchandising. These buyers are important in ensuring that Loblaws can offer something unique to each product category. Customers need a reason to go to Loblaws to purchase items non-traditional food items, such as glassware, home cleaning items, microwaves, and stationary. Without experienced, knowledgeable buyers Loblaws will be unable to procure items at prices that will add to their RVP and put them ahead of the competition: Wal-Mart. While in their eyes this new strategy increases the selection and convenience piece in their RVP – they simply don’t have the tools to necessary implement.

-Shan

http://www.theglobeandmail.com/servlet/story/RTGAM.20070125.rmloblaw0125/BNStory/specialComment/

http://www.canadianbusiness.com/managing/strategy/article.jsp?content=20061106_82505_82505

The Blog is Back

The 2007 version of Retail Marketing Management at Ivey is now under way and the blog has reopened for class contribution ... new posts on the dynamic world of retailing will be appearing soon.