Chapter Five. What’s the Big Idea?

The most important bit in the whole book is this part. Big Idea: Knowing what the hell you actually are; this is the absolute foundation stone of a great retail business. Once you work out what you are, you can get really good at being that thing and get really good at telling people what that thing is and why they might like it: You can build a store that people want to come to and spend money in because they explicitly understand what you’re giving them.

Every great retail business is built around a Big Idea—a reason for existing, the thing that business is for; it informs absolutely everything that the retailer does and says, and informs every decision made within it. It is the starting point for everything in the business. I’ve put it in this section of the book because it has a big impact on the team—you can recruit, motivate, and inspire people around a great Big Idea.

Every great retail business is built around a Big Idea.

Big Idea is the thing that has Hotel Chocolat growing and, for the want of a Big Idea, has Thorntons shrinking. It’s what makes IKEA so compelling and Wal-Mart so powerful. Let’s look at Wal-Mart’s Big Idea, which is “Every item in the store will be offered at the lowest possible price.” That’s Wal-Mart’s reason-for-being and it’s an idea that customers and staff alike understand utterly and fundamentally. It is the Big Idea that has driven Sam Walton’s company since the moment he articulated it one day when he did a bulk deal on ladies” pants and realized he could be more competitive by passing on the savings to customers.

Don’t confuse Big Idea with a marketing strapline: Sometimes they will say broadly the same thing but the idea itself is more than a throwaway creative frippery—it will inform the strapline but will rarely use the exact same words.

Differentiation

Take Wal-Mart’s Big Idea and contrast it with Target’s, which is to offer “cool things at lower cost.” Both sell in roughly the same categories, in the same types of stores (they’re classed as “discount variety retailers”). Now, what these two different Big Ideas mean in practice is that Wal-Mart must always opt to sell a 10¢ glass tumbler because it’s the cheapest possible price a glass tumbler can be sold for. Target, on the other hand, are able to say “Hmm, that 10¢ tumbler is a bit cheap and nasty. We’re about selling at lower cost so we can’t stock the really swanky 30¢ tumbler but we’ve found one that’s 12¢ and is a nicer shape, with more consistent molding and heavier glass than Wal-Mart’s, so we’re going to sell the 12¢ option; it’s cheap but it’s nice too.”

What this has meant is that Target have been able to use their Big Idea to drive a space for themselves to compete against the world’s biggest and most powerful retailer. Customers are surprisingly attuned to this sort of subtlety and the result is that Target’s customers are younger, wealthier, and better educated than Wal-Mart’s.

Let’s look at some more Big Ideas in a bit of detail. I’m going to start with more on Wal-Mart because they are so amazingly focused on their Big Idea, and it gives good insight.

Wal-Mart (U.S.)

Every item in the store will be offered at the lowest possible price

Wal-Mart invented the philosophy of “Everyday low pricing” and do more than any other company on earth to drive cost out of their business and to harness the power of bulk purchasing. At one point, Wal-Mart accounted for a staggering 10% of all Chinese exports to the U.S.—buying power demonstrated on a mind-blowing scale. Indeed, Wal-Mart is the biggest company on the planet (by revenue). Because the Big Idea is so clear—in any given product case—Wal-Mart buyers know that they must always choose the option that means they can sell it at the lowest possible cost. Meanwhile every employee understands that cost-reduction is the critical activity—this influences how stores look, where they are and how business is conducted.

Aldi

Simple presentation of an edited supermarket range at the best possible price without compromise on quality

Aldi might be cheap but it isn’t nasty and the middle classes across the U.S. and Europe have recognized that quality bargains are a sensible part of the family spend. The stores are plain and very efficient and it costs far less to manage the inventory at Aldi than it does to manage the exponentially larger range at Tesco or Sainsburys. “Edited” is the key word here—Aldi is essentially saying “Trust us, we will stock only the low-cost products that work well, taste nice, or last a long time.” This is such a powerfully logical Big Idea that Aldi was able to chase Wal-Mart back out of the German market.

Space.NK (UK)

A carefully edited selection of high-quality, original, and effective beauty products from innovators and specialists around the world

Nicky Kinnaird is an instinctive, natural retailer and Space.NK is brilliant as a result. She recognized that customers want independent advice and recommendations free from single-brand evangelism, that they want help to find the products that do the best job and that are absolutely on-trend. You can’t get that at the Clinique or Chanel counters in a department store—you have to do all the work yourself to work out which bits from whose ranges are the best combinations. So Space.NK is almost a living recreation of the “beauty secrets” part of Cosmopolitan or Vogue. It’s an incredibly well-focused Big Idea that customers love.

eBay (U.S.)

Connect buyers and sellers, for any product they can imagine, and make that connection easy and safe

It might look like just an auction site, of which a dozen sprouted in the early days of the web, but eBay’s success comes from a Big Idea that recognized what buyers and sellers really wanted: to do their buying and selling in the easiest possible way without fear of getting ripped off. It’s not really about the mechanics of purchase at all—as the popularity of “Buy it Now” proves. There’s a chicken and egg here: eBay’s founders understood that they had to attract huge numbers of both buyers and sellers quickly to make other buyers and sellers want to use the site. Again, simplicity and safety were critical—make it easy for people to list their stuff, drop as many barriers to that as possible, and do the same for sellers. Build trust in both and make it scale fast.

MPREIS (Austria)

Local supermarkets built around local produce and each with distinct architectural identity

As well as a focus on local product from the Tyrol region of Austria (each store carries at least 15% Tyrolean products), this one is interesting because the Big Idea affects the very fabric of the stores—each is designed by hot local architects and has a distinctive feel, even though the products inside are consistent between stores. The stores look awesome but it’s not design for design’s sake: Local customers see their MPREIS as their store, not an identikit bland corporate. That’s valuable—if a store like MPREIS opened here, you’d shop it.

Apple Store (U.S.)

Taking the Apple brand to the high street in a hands-on and exciting way

Make no mistake, the Apple store is essentially a single-brand PC World, and yet you’d be loath to make the comparison. Apple’s Big Idea for their store identity came from outside of electrical retail, from Ron Johnson, former VP of Merchandising at Target. That’s crucial to the story because Ron was able to throw away the baggage of electrical retail—hide things away to minimize theft, look but don’t touch, cram it in, concentrate only on price—and create a format that reflects Apple’s focus on using your technology to do cool stuff. He dovetailed that with lots of support and advice on how to do those things and delivered a format in which the Big Idea means the customer gets to play, become enthused, and be supported in their enthusiasm.

Lush (UK)

A celebration of fresh, natural, and ethically produced body products

Lush are one of the UK’s best retail businesses and one of the most genuinely principle-driven—they prove that profit and a conscience are compatible. It’s the Big Idea that’s interesting here: we’re talking vegetarian products, minimal to zero packaging, ethical sourcing standards way above almost anyone else’s, public support for controversial direct-action organizations, and an incredible degree of corporate transparency. But do the stores look or feel like campaigning centers for an alternative lifestyle? No, they are a brilliant riot of color, a tidal wave of nice smells, a celebration of great products that work brilliantly and that staff are incredibly proud of. You don’t go to Lush hugging a tree and apologizing for wanting to be clean—you go ready to have fun, to be served with passion and laughs, and to come away feeling awesome.

IKEA (Sweden)

Democratizing design: great design, low prices, and accessible to all

Okay, so the flat-pack furniture jokes we used to make about MFI are now directed at IKEA but that’s just a by-product of popularity. Actually, what IKEA isn’t, and this might be hard to swallow, is a furniture shop—the whole business is built around a set of principles that focus on one thing: making it easy for people to create nice spaces that look good and don’t cost too much money. It’s a people shop. Building on typically Swedish principles of function before form and simplicity—the store works by first showing customers how to easily group things together, pricing everything in round numbers, filling the journey with fun basics, accessories, and extras to personalize spaces with and then finishing off with an easy collection and payment process all in massive tertiary locations. Yes, it’s murder on a weekend but that’s because lots of ordinary people like you and me are in there buying cheap things that work well and that look nice doing it. Contrast the experience of buying a first sofa at IKEA now to when you bought your first sofa twenty years ago from a traditional British furniture store ... six to eight weeks for delivery, costs a month’s wages, probably needed credit to buy it, and it wouldn’t have looked much different from your Mom and Dad’s. Or your Grandma’s. IKEA means everyone can have nice design that functions brilliantly without costing an arm and a leg. That’s retail revolution.

Subway (U.S.)

Sandwiches made “fresh” to order

This is an incredibly successful perversion of the idea of fresh food as healthy—Subway invests heavily in promoting the healthy options on its menu, it uses images of crisp hunks of lettuce and juicy fresh tomatoes to lead customers into believing that a sandwich made from scratch in front of them is somehow magically healthier than one wrapped in plastic at the gas station. Every man, woman, and child in the U.S. recognizes Jared, the student who lost half his body weight on a mostly Subway diet for a year. It’s so pervasive that people have come to subconsciously see Subway as the healthy fast-food option, even though they actually order meatball marina with extra cheese every time. It’s a powerful use of Big Idea but a bit sneaky too.

Costco Wholesale (U.S.)

Limited range in vast depth, serving trade, and employee groups

Easy to see the Big Idea in action here—massive warehouse stocking few lines but each in massive quantity, turning over inventory incredibly fast at low prices. You have to be a “member” to get in and be prepared to buy products in big pack-sizes. For the small-store trade, for offices, hotels, and restaurants, it’s another cash and carry but the extension to employee groups is the bit of genius—putting pressure on companies to allow employees access to Costco and giving those employees what feels like a bit of secret access to a part of retail that beats the system.

Media Markt (Germany)

The customer is not stupid and they live where we do

Europe’s largest electrical retailer employs a refreshing approach to advertising itself—openly declaring that customers aren’t stupid and so should be looked after by knowledgable staff. To deliver great service, Media Markt recognized long ago that store teams who have real say in their store, who get a chance to make decisions, and directly influence outcomes are more likely to want to commit to giving customers great experiences. So stores here are structured as if they were individual businesses—with managers having 10% equity stake and, together with their store team, having a say on assortment, pricing, and advertising based on their local knowledge. People take pride in things they feel ownership of and are able to deliver on Media Markt’s Big Idea because of that.

Case study 5.1 Smart Retail: How Hotel Chocolat has helped sideline Thorntons

I like Thorntons. I’ve got nice memories of buying little bags of Continental truffles as a treat, but the Thorntons I see now ... something is missing. It’s lost its way and that’s reflected in a decline in trading performance. On the one hand, Thorntons is actually the UK’s largest independent chocolate company; on the other, it’s a general confectioner. There’s confusion. That confusion follows through to stores where over the door you’ll read: “The Art of the Chocolatier.” But inside you’ll find what appears to be a muddled array of messages and sweets.

And into that confusion, a handful of years ago came the bricks-and-mortar incarnation of catalog chocolate-retailer Hotel Chocolat. And they are wonderful stores pulling off an incredible trick: to be at once cost-effective and mainstream but to appear high-end and authentic. And that’s because the business they represent is authentic and has set out a Big Idea that defines it as “The Authentic Chocolatier.” Now then, that’s something everyone can understand and get behind—Hotel Chocolat even own and run a cocoa plantation in St Lucia and aim to not just grow the beans but also to refine the chocolate there. That deep involvement with the fundamental roots of the product shines through to the stores themselves where passion and deep understanding of, and appreciation for, chocolate shines through. You’re offered tasty samples by well-presented staff, product is displayed with breathing-space, pride, and care, and lower-priced packs of exciting flavors and combinations of ingredients make the store price-accessible to everyone.

To the customer, Thorntons appear to be about volume and commodity where Hotel Chocolat is about indulgence and authenticity—and is thriving. Thorntons does not have an obvious Big Idea and it’s stalling their business. The original Thorntons store was opened in Sheffield in 1911 by Joseph Thornton—when he later handed it over to his two sons, he left them with a Big Idea ringing in their ears “Make this the best sweet shop in town!” And Thorntons was that for many of us through the decades, but it isn’t now and hasn’t been for some time. If it was, Thorntons stores would be magical places you’d go to whenever you wanted a special confectionary treat. But they’re not—which is sad because there is still room for an evolved Thorntons.

The story of these businesses in a similar market sector shows again how powerful a great Big Idea is.

Case study 5.2 Not Smart Retail: No Big Idea

WHSmith is a fascinating case because the retail company actually consists of two separate businesses: WHSmith High Street and WHSmith Travel, which isn’t a travel book shop but rather the WHSmith stores you see at airports, motorway services, and train stations all over the world. One of these doesn’t have a Big Idea and one does. One isn’t profitable and one is ...

WHSmith High Street stocks books, magazines, cards, sweets, stationery, DVDs, CDs and gifts but lead in just one sector—there are better stationers, better book stores, and better music shops; only the magazine section is a leading department. High Street is a business that for more than a decade has had no real idea of what it’s actually for. Nobody inside the company actually knows—I’ve asked.

But WHSmith Travel is brilliant—it’s basically the same departments but in highlight form, so you’ll have top books with some eclectic promotions, a great range of magazines, batteries, film and camera memory cards, sweets and drinks, and headache tablets—its Big Idea is to reliably equip every traveler with everything they could want to make their journey a better one. The ranges are perfect, the merchandising spot-on, and the checkout-process efficient and pleasant. The Big Idea guides everyone: you know exactly what to look out for as a buyer, exactly what to range as a marketer, and exactly how to present it as a merchandiser. You know because the Big Idea is so clear it drives an obvious and practical mission.

Recently, WHSmith has admitted publicly that High Street is a trading problem while Travel is booming and profitable. Like Thorntons earlier, WHSmith High Street is a business without a Big Idea—they don’t know what they’re for and neither do customers.

Your Big Idea

What’s the Big Idea that drives your retail business? Is it clear? Does it make sense? How does it position you relative to the market and to your competitors? If you’re the top person at your place and you answer “no” to any of these questions, please stop reading and go sort it out now. Without that clear understanding of what your business is for, well, there’s nothing we can do for you! If you’re a team member in-store and you have the misfortune of working for a business that has no Big Idea, see if you can work out what it should be. Make it relevant to your local customers and share it with the team—see if you can use it to at least make your store a high-performer. Once you’ve proved that it has a positive effect, share it with senior management too.

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