Waitrose – Product Development

Waitrose – the supermarket chain with a premium reputation and who are owned by the John Lewis Partnership – has just announced plans to stock its own fashion and clothing ranges.  Their flagship store in Canary Wharf is to be relaunched as a “Food, Home and Fashion” outlet later in September.  This is a great example of product development; such strategies aim to increase sales by selling new products to the same market segment.

Hence, one essentially targets customers with a different benefit.  This, Waitrose hopes, with allow the company to continue winning market share against other supermarkets; Asda, Tesco and Sainsbury’s all stock clothing.  But can Waitrose replicate the success of its competitors?

I can see one immediate problem with Waitrose stocking clothing.  Unlike their competitors, who target a range of segments, Waitrose appeals mainly to the upper and middle classes with premium pricing and high-quality produce.  Will customers with spare cash to spend really want to be purchasing their clothes from supermarkets?  This works well in Asda, where customers can grab a pair of jeans for a few quid, but Waitrose is positioned completely differently.  The issue extends further into product quality: not only is the perception of supermarket clothing quality poor, but also Waitrose may struggle develop stylish fashion ranges in-house.

Having said that, this strategy does have potential – depending on two conditions:

Firstly, the rebranding of the store needs to be significant.  The “Food, Home and Fashion” outlet needs to really emphasis the home and fashion aspect of the store; this would ensure that their customers do not feel as if they are purchasing their clothing from a supermarket.  Also, I like how they are using the word ‘Fashion’ rather than clothing.  These two branding tactics should help improve customers’ perceptions of quality.

Secondly, Waitrose should stock John Lewis clothing and stress convenience as their core value proposition.  By selling John Lewis clothing, Waitrose can ensure that their products are actually high-quality without the need to develop more in-house expertise or deal with the risks of outsourcing.  And customers would feel more comfortable purchasing existing brand names.  Moreover, I believe the core benefit of purchasing clothing from Waitrose is convenience.  Hence, I could easily see a market for the busy London high-flyer who can purchase a new office shirt, while they get their food shopping.

Ultimately, Waitrose’s strategy follows the trend among supermarkets to diversify away from selling solely food.  However, they risk loosing their brand’s differentiation (which has helped them win market share) by copying too closely what their competitors are doing.  For this to be a success – and I think it can be – Waitrose need to continue to focus on quality, start emphasising convenience and avoid competing on price.

Do you think the wealthy shopper can be convinced to buy clothes from what is, essentially, a supermarket?  Leave a comment below.

© Josh Blatchford, author of Manifested Marketing, 28/07/2010

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2 Comments

  1. Hey Josh,

    just recently visited Waitrose store at Canary Wharf. They have 3 floors – first floor is for food, second floor is for clothing and third floor is for home.
    It is quite nice to be in a one shop, but in each floor it has completely different feel to it. The products are all great and do correlate to their overall positioning. I think it is convenient, both practical. Also, we need to recognise that upper class individuals these days are also short on cash, so why not buy clothing from supermarket which still has a classy feel to it?

    M

    Reply
    • Thanks for your post. I quite like the idea of having a floor for each section. Perhaps the order (first floor = food, second floor = clothing, third floor = home) reflects their importance to the company? I would of expected home to be on the second floor, if this was the case.

      Reply

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