Post-event: Magic Kingdom & Wal-Mart Neighborhood Stores
I have a theory that there aren’t many “new” ideas. Most ideas claimed as “new” are really evolutions of older ideas, ideas that have been combined to a new purpose, or an existing idea which had a technological innovation to allow for a new use.
History is dotted with breakthrough ideas of this sort. Since the early part of the 20th century, humans had been communicating with radio, and even earlier by land line phones. Two-way walkie-talkies were extensively used in World War II. Engineers in the 1970’s unlocked a way to combine these ideas, with a few innovations, to allow for cellular technology. Mobile phones operate in a similar fashion to radios, at a higher bandwidth, and with the ability to hop from tower to tower, but conceptually it’s the same. You have radio based devices that allow people to communicate with other radio based devices.
New ideas or great evolutions of existing ideas are often followed by a change in the preferences of consumers, or shifts in the marketplace. Unique movies tend to stand out in your mind. Star Wars and The Matrix were both revolutionary ideas (although one could argue even they were evolutionary) that spawned new industries.
People crave a unique idea. We like to experience new things. We’re willing to try new things often only because they’re new.
Disney World
Disney is a leader in the generation of new and innovative ideas. The purpose of an Imagineer is to lead the creative process to develop these ideas.
I think this ability is the secret to Disney’s success. Disney fully understands their customer segments and develops outcome based solutions specifically for those groups. Look only at their resort offerings and you will see a rich portfolio by preferences and cost.
I enjoy visiting Disney World as much for the attractions as to watch how people experience the parks. People experience the parks differently. 6-year-old girls have a different experience than their mothers, and yet Disney has found a way to make the experience relevant and engaging for all segments.
Behind Cinderella’s castle is a small fountain with Cinderella standing with the mice. A parent will focus on Cinderella and the mice, and remember the story from childhood, but look from the perspective of a 6-year-old girl and you’ll see a princess with a crown on her head (hat tip: Dee). The same scenario can have multiple experiences.
Many companies develop outcome based solutions, but after identifying the requirements and expectations, most companies turn conservative in their approach. Efficiency takes prominence over effectiveness, and you’re left with a mediocre result.
Disney’s strategy appears different. They are in the business of growth, so their solutions must focus on the top of the equation, driving growth so any resultant efficiency ratio looks good.
(My Disneyites may argue that they sacrifice quality within the project in favor of costs, but they don’t appear to introduce that until after the ideation process.)
And ideation doesn’t end with the formation of the concept. In addition to the Cinderella scenario above, “Hidden Mickey’s” are an example of continued innovation throughout the development process. Visitors expect surprises in their visits to Disney.
Disney’s new marketing program, “Year of a Million Surprises,” is in line with this idea of unexpected delights. As I was walking through Epcot, I was approached by a group of Disney cast members and told I was in the “right spot at the right time”, and handed an Epcot Dream Fast Pass. I was able to walk to the front of any queue for the remainder of the day.
Disney has managed to set and meet an expectation level of being pleasantly surprised.
Wal-Mart Neighborhood Stores
Wal-Mart is the ultimate efficiency engine. Their distribution, pricing and sales are built on pure competition and strong financial management. They have a strong understanding in data that allows them to closely manage inventory levels and minimize waste and spoilage. They turn over a dollar more times than their competitors, allowing them to charge a lower markup while still generating more profit than competitors.
Wal-Mart has been trying to create a new niche in the industry with smaller, “Neighborhood Stores.” The neighborhood store is grocery only, and has a warmer, more upscale feel than their big box locations. It’s designed to hold off competitors who are focusing on quality and selection, and entice consumers who do not wish to visit the Supercenters.
I had the opportunity to visit the Wal-Mart Neighborhood Store of the Year for 2007, a location just East of Orlando, as I was gathering supplies to cook dinner Saturday. My New Year’s Ribs require cider, ginger, pork, a variety of spices and a few other ingredients. What better opportunity than to compare the best Wal-Mart Neighborhood Store of the Year against possibly the greatest retail experience in Disney World?
I entered the Wal-Mart store and was initially impressed. The store has rich, warm colors and a smaller feel. It’s half-way between a Whole Foods and a supermarket. Shelves up front are constructed from wood, lighting is muted, and it’s got a very casual feel to the store.
Unfortunately, that’s where the comparisons to upscale stores ended. The produce selection was no better than the Supercenter. I am better off going to my local Hy-vee for fresh herbs. They offered ginger root, but no ginger paste. Very limited fresh herb selection.
The meat selection was largely prepackaged. No beef loin. Precut, 1” selections of filets. Stock cuts.
The beer selection was nice, but in no way exhaustive. It was the standard selection you’d see at any average grocery store or good convenience mart.
It was a smaller version of the Supercenter with a different façade. There was nothing to differentiate it from good grocery stores, other than lower prices on stock goods.
I expect the Neighborhood Store concept will sell will with aspirational segments that like feeling as if they’re in an upscale store, don’t mind the limited selection and expect the prices of the Superstore. If Wal-Mart’s intent was to move upchannel I think they have a lot left to do. Upscale segments want the variety and are willing to pay for it.
What will be interesting to see is if Wal-Mart financially outperforms Disney parks. Disney has set the bar so high and Wal-Mart the bar so low. If people expect very little, they make a big deal out of any time you exceed expectations. Conversely, if you’re always hitting the high-marks, any slip-up has a much larger negative than a slip-up by an average performer.
