The history of the hypermarket dates back much further than most people would think. The first hypermarkets were started some thousands of years ago: at the Soukh in Arab countries people were selling food and non-food products. Many of these markets were covered passages that were open from morning to night. Later on, tradesmen began to sell kitchen implements in addition to dates and this gradually led to the beginning of the one-brand store. The tradesmen were capitalising on the fact that their customers didn’t have the time to stop at all the different shops: one-stop shopping was a great solution for customers who travelled from far and wide. Present-day hypermarkets may look a little different, but in essence not much has changed as for the philosophy: selling a large variety of products under one roof. Nevertheless, the hypermarket is developing in different ways depending on the country.
Western European countries
Only after the death of general Franco (1975) the first Hypermarkets were established in Spain. By that time, the French had already gained substantial experience with assortment and location and they flooded the Iberian peninsula with their Carrefours and Auchans. In the meantime, Italy was learning that it was much better to be using inner cities for attracting tourists. Therefore, the Italians built their hypermarkets in the periphery. The Germans taught us that that where rational people live you need to build rational stores: just look at the success of supermarket chains such as Aldi and Lidl. This is why the German family business Globus is the success that it is. The company acknowledges the need of its fellow countrymen to not spend too much money on groceries.
The state of affairs in Eastern Europe
After the wall came down Eastern Europe has become a force to be reckoned with. In the former Soviet Union and especially in Russia one is investing at a speed that makes it difficult for ideas to be fleshed out. One is aiming at the present social classes: on the one hand there are Azbuvkusa with a high positioning, for a relatively large group of affluent consumers, while on the other Moscow houses a stripped version of Auchans for the common folk.
In Slovenia and Croatia one is doing everything possible to please the customer by means of broad product ranges in beautifully designed cosmetics and wine departments. In these countries, shopping is a way to express one’s social status and this is reflected on the shop floor. These and other rapidly rising countries (China!) must also start to focus on the large upcoming middle classes. Because at the end of the day, this is the main group of consumers that have a strong need for service, a good assortment and affordable products.
Organic products in the United States
People in the United States have never shunned luxury and the expression of affluence; however, here we see a development towards organic and socially sound products. Organic products are hot: customer satisfaction studies performed in 2006 showed that anything to do with organic products is highly appreciated. And this was the case even before Al Gore’s launched his film ‘An inconvenient truth’’.
Fluctuations per department
Still there have been fluctuations over the past twenty years that have had an impact on the success of the hypermarkets. Because a hypermarket encompasses many different retail sections, there are differences in the success rates and difficult periods across the different departments. Various departments, such as textile and multimedia have been put under pressure because specialist chains like Zara and Mediamarkt provide a more complete range at lower prices. As for textiles, most hypermarkets would be wise to stick with a basic range that is not as susceptible to trends, e.g. underwear, socks, winter and sports gear. The ASDA hypermarkets in England have been able to go with this flow quite perfectly by launching it’s own clothes brand (George). This brand now has a 30% market share where the sales of children’s clothes in England are concerned.
In terms of entertainment hypermarkets can stand out by communicating a hint of modernity. Make sure you have a strong range of music and audio carriers on offer and make a great display of your flatscreen televisions. This way, the hypermarket as a whole will come across as trendy and modern in the perception of consumers.
Extra turnover in cosmetics and organic products
We are also seeing shifts and developments in departments like cosmetics, household and organics. The cosmetics department has a lot of potential. A comprehensive body care department in an exclusive setting can generate a lot of extra turnover. As developments in the US show us, organic products have the future. One could opt to include these products in the regular assortment, but why not let them be a department in their own right? This is how you will add value to this group of products as well as to the private label.
We see many different developments per hypermarket, per country and per department. Nevertheless, all hypermarkets should observe these 10 Golden Rules:
1. Create an experience – make the store worth a day’s visit
2. Develop three to four worlds maximum
* The Trendy world (Non-food)
* The Market place (Fresh food)
* The Discount world (Dry groceries)
* Seasonal and promotions
3. Give the store a non-food profile
4. Make staff visible in all departments: they are part of the sales process
5. Be a specialist and generalist at the same time
6. Make the store visit a journey, creating perfect navigation
7. Create a dynamic layout with promotions and seasonal departments
8. Be dominant and strong in all aspects
9. Protect the human aspect
10. Communicate with your customer, starting in the parking lot
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