A few years ago, the owner of Lowes Foods, a mid-sized supermarket chain in the U.S., approached me with a serious problem. Walmart, Whole Foods, and Publix were attacking his chain from every direction. There’d been an average of five new store openings in the neighborhood of every Lowes store over an 18-month period. Sales had dropped 40%. When I looked into his eyes, I could see the panic.
They’d exhausted every obvious strategy. Cheaper prices, because that’s what his customers said they wanted. More product offerings, because his consumers were requesting it. Faster check outs, because his customers were increasingly strapped for time. But none of the approaches seemed to be the key.
Instead of diving into the billions of Big Data points stored on Lowes’s main frames, inviting trend researchers to explain tomorrow’s consumer needs, or visiting competitors’ stores for ‘inspiration,’ we did something entirely different. In a search for the subtle insights that reveal the heart of the problem – what I call ‘small data’ – we moved in with Lowes’s customers.
This was something Lowes had never done before. Neither had any of their competitors.
We asked every senior employee – and all of their thousands of store managers too – to come to understand their customers’ lives by cooking with them, dining with them, shopping with them, entertaining with them. In short, they experienced daily life through the lens of the consumers.
Why did we make this request? To infuse empathy into the minds of the organisation, enabling them to see the world from the customer’s point-of-view.
It was a technique I learned from the founder of Ikea, the late Ingvar Kamprand. Ingvar had invited me to IKEA’s headquarters in Sweden, but when I arrived, he was nowhere to be found. “Where is he?” I asked. His people informed me that he was at his ‘usual’ place, down at the checkout stands. And sure enough, that’s where I found him. Already in his 70s, he was at a register, ringing out every customer. “Why do you do this?” I asked. He answered, “Because I want to look into every customer’s eyes, feel their dreams, know their hopes. This is the secret of my company. This is why IKEA is what it is today.”
Like every other supermarket chain out there, Lowes had lost contact with its customers. Routines, compliance, rigorous rules, and a ‘we’ve always done it this way’ mentality had taken control of the company. As a result, it had lost sight of the consumer’s dreams and hopes.
Perhaps to no-one’s surprise, Lowes stood for nothing, perhaps with the exception of their chicken, which seemed slightly tastier than the competition’s.
But then, following Kamprand’s philosophy of truly getting to know your customer, we conducted in-home visits and made two unusual observations. Most supermarket executives would have glanced right over them.
We all have two ages, not one. There’s our physical age. I’m 49 years of age. But then there’s our twin-age, our inner age. On the inside, I feel like I’m just 16 years old. Every supermarket was designed for our outer age, but as a result of our in-home visits, we wondered: Should we be celebrating our inner age, appealing to our inner child?
However, we also made another, more horrifying observation. Communities are dying. Social media has killed every aspect of social interaction, except the one taking place on a screen. Churches are closing down, community centers are going out of business. People are locking themselves inside their homes, beyond sight, sound, and touch of their neighbors. They are projecting themselves into a cloud. With that comes loneliness, a lack of a sense of belonging. Even at the dinner table, family members focus on their screens, not on conversation with each other.
For most supermarket executives, these observations would have been, at best, vaguely interesting. But would they believe these insights could profoundly transform a supermarket chain? Hardly.
This is where innovation comes into play. If you ask for the obvious, you’re likely to get the obvious. Remember what Henry Ford said: If you asked consumers what they wanted, they’d say, ‘More horses hitched to the carriage to make it drive faster.’ But asking the wrong question had generated the wrong answer. No-one thought about the automobile.
We shouldn’t be asking consumers what they want or what they would change. Instead, our role is to ask consumers, ‘How does a supermarket make you feel?’ It is that emotion that feeds insight into the innovation process.
When we asked the right question, customers replied: ‘Bored.’
So then we asked: Why not create a place where customers want to hang out, someplace that makes them smile and laugh?
With that in mind, the foundation of the new Lowes was born. We created a unique purpose: ‘Let’s bring the community back to the table.’ Our vision for the future Lowes was simple. We would build our own community inside each and every store. We’d do so in a cheeky, fun, provocative, colourful way. We would appeal to the children, and to the child in each of us. In short, we would make shopping fun again.
Through extensive brainstorming work, engaging everyone at all levels across all functions, Lowes achieved a remarkable transformation. The butcher department began producing 26 new sausages every day, many with odd names like ‘The Hillary Clinton Sausage – slightly overheated’. In many cases, the butchers are part-time actors, too. They can often be seen bantering with the nearby Chicken Kitchen, which became a story of its own. We hung a Chicken Chandelier, crafted in partnership with Disney, from the ceiling of every store. Whenever fresh chickens are served, the chandelier fires up, begins to animate, and plays catchy music throughout the store. Staff and guests (as Lowes now refers to customers) gather underneath and begin to dance. This happens every three minutes!
We introduced the Cakery, where all cakes are square – and chemical-free. On top of the Cakery House are gigantic candles. When Lowes’s little guests sample a cake, they throw their sticks into a wishbox, blow out the candle lights (spoiler: Lowes staff use a remote to control the candles), and make a wish. To their surprise, the candle lights fire up again. There’s often such joy in the kids’ eyes that this becomes a weekly event for every family, something the kids, moms, and dads look forward to.
That was the key idea: to sell not just grocery products, but also experiences, feelings, and memories. Today’s Lowes offers that sense of joy we experience when we’re with the people we love, when we can be young again, when we can park our fears and worries at the door.
I’ve always believed that innovation is combining two ordinary things in a completely new way. If we combine the usual stuff or ask the usual questions, all we’ll get is more of the same. Rather, ask those emotional questions. ‘How does it make you feel?’ Then look elsewhere — far, far away from your industry — let yourself be guided by the consumer’s steady hand, and combine it all into something unique and amazing.
Admittedly, we didn’t ask the usual questions, nor did we listen to what the consumer told every supermarket executive out there. In contrast to almost every other supermarket, prices at Lowes are up, and we’ve halved the number of SKUs — and, oh yes, the lines have never been longer at Lowes’s checkout stands. And, today Lowes is the fastest growing supermarket chain in the U.S.
If you want to see rational solutions to the classic, rational issues, just go to the competition. You won’t find any community, no dancing staff, no laughing kids – and, no soul. You won’t find any lines, either.
And that’s the issue. Anyone can lower their prices and stack more products on the shelves, but it’s much harder to create soul. And, it’s impossible to copy. For me, that’s the heart of innovation.
