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Having read the interesting article submitted here, I have to say that it is refreshing to see an analysis of different approaches to retailing that focuses not

Having read the interesting article submitted here, I have to say that it is refreshing to see an analysis of different approaches to retailing that focuses not only on the demographic groups served by the different retailers, but also on the SKU (stock-keeping unit) count for each retailer. Having more different products in stock is more expensive than having fewer different products in stock. Carrying "name" brands is usually more expensive than carrying "store" brands. There are plenty of other differences between the shopping experience at Wal-Mart and Costco. A peculiarity of local geography is that we find that the two Costco stores at our end of the Twin Cities metropolitan area are just never on our way to anywhere else, so we let our Costco membership lapse after just one year. For quite the same reason, we hardly ever shop at Wal-Mart. But we shop at Sam's Club (the Wal-Mart version of a warehouse store like Costco) all the time, simply because it is on my way to work and largely on the way to many of our other trips during the week. Today we built a trip to Aldi into our schedule while our daughter was at soccer practice about halfway from our house to that store. We love to minimize driving--driving costs both money and time. Some stores cannot thrive unless they are within SHORT drives of many customers. Some of those stores have to extract a lot of productivity out of each worker to pay the workers even minimum wage. I still wonder when Amazon is going to go all-in in setting up major same-day delivery centers in most metropolitan areas in the United States. That could have a revolutionary influence on my shopping habits. And if robots can do more of the stocking of shelves, and eventually self-driving cars do most of the delivering, that business model could end up with huge market share. I'm very happy when workers at menial retail jobs are paid more--I have had such jobs (at Sears and at Target, many years ago). But they best gain opportunity to advance themselves economically when they also can save on their own consumer spending in retail stores. Everyone likes low prices day in and day out.

thetrb 13y ago
I'd love to have an Aldi in the Silicon Valley, at least if the concept is similar to the ones in Germany.
- billybob255 13y ago
  The ones in MI seem to be similar to the ones in Germany.
- Amadou 13y ago
  The Aldis in Illinois roughly 20 years ago were bottom-barrel discount grocery stores. Poorly maintained and all the produce was very suspicious. I don't know which half of the Aldi empire owned those stores. Trader Joes is owned by the north aldi brother.
  - X-Istence 13y ago
    That's the Aldi I know and love from The Netherlands... so I assume it is like the ones in Germany.
    - skyebook 13y ago
      That's a scary thought.. As recently as 2011 when given an Aldi and a Rewe next door to each other, it was really difficult to ever choose Aldi (in fact, the only reason to really venture in was their cheap and unlimited 3G SIM card resales). That said, Rewe managed to also make itself more useful in the process by actually having everything I needed so the extra price ended up working out, to some degree, if you count convenience.
    - sudont 13y ago
      It is. The Aldi's in Wisconsin, USA are pretty much the exact same as the one I was at in Berlin, except for different brands. Pretty much the same layout, except the Berlin one had beer.
      - rthomas6 13y ago
        Aldi in Georgia, USA has beer also.
  - joezydeco 13y ago
    Aldi has improved in the Chicago area in the last decade. There's been a wave of new construction in more affluent suburbs and stores have expanded to include liquor sales in certain areas. But yeah, it's still no frills. Staples like milk and baking goods are dirt cheap, but I wouldn't chance the produce. Lots of processed food. Bakery is all mass-produced. Interestingly, the supermarkets I've been to in Germany lately are becoming more like US ones (Rewe, Edeka) but some are still super no-frills (Penny Markt, Norma)
icelancer 13y ago
>Some stores cannot thrive unless they are within SHORT drives of many customers. Some of those stores have to extract a lot of productivity out of each worker to pay the workers even minimum wage. Many, now. Logistics is (and has been) a massively growing field when it comes to deployment of franchises of restaurants as well as groceries and general goods stores. There is hugely growing sentiment against unnecessary driving, partly due to rising fuel costs but I also hypothesize that media pressure of said fuel costs as well as innovation from Netflix etc. drive this signal as well. "Why leave the house when you don't have to" has farther reaching effects than simple DVD rentals. Great post, BTW - and a very interesting subject indeed.
malandrew 13y ago
" But they best gain opportunity to advance themselves economically when they also can save on their own consumer spending in retail stores. Everyone likes low prices day in and day out." Great observation. I know there is a business model somewhere that allows poor people to afford the same economies of scale by splitting bulk purchases somehow. I imagine that one of the neighborhood social networking sites like NextDoor could add feature that allows a neighbor to broadcast their future purchases to their neighbors and other neighbors that want the same product can choose to up the volume of those purchases. This will allow them to save money via volume and shipping. The company doing the sale (whether Amazon, Walmart, or whatever) would deliver all the stuff to that one neighbor and then the other neighbors would show up at the ordering neighbors house to collect their share of the purchase. This would be a very compelling feature for NextDoor or similar site to create a revenue stream that increases their attractiveness to lower income neighborhoods. When adding to the cart, the user can choose to add products publicly or privately so that only non-personal products are broadcast to their neighbors.
- eru 13y ago
  > [...] same economies of scale by splitting bulk purchases somehow. That's what Wal-Mart is doing, and they take a cut..
- shrikant 13y ago
  "splitting bulk purchases somehow" is exactly what retailers are doing for you now. This is called "bulk breaking". http://www.encyclo.co.uk/define/Bulk%20breaking http://www.encyclo.co.uk/define/Bulk%20breaking

thetrb 13y ago

I'd love to have an Aldi in the Silicon Valley, at least if the concept is similar to the ones in Germany.

billybob255 13y ago
The ones in MI seem to be similar to the ones in Germany.
Amadou 13y ago
The Aldis in Illinois roughly 20 years ago were bottom-barrel discount grocery stores. Poorly maintained and all the produce was very suspicious. I don't know which half of the Aldi empire owned those stores. Trader Joes is owned by the north aldi brother.
- X-Istence 13y ago
  That's the Aldi I know and love from The Netherlands... so I assume it is like the ones in Germany.
  - skyebook 13y ago
    That's a scary thought.. As recently as 2011 when given an Aldi and a Rewe next door to each other, it was really difficult to ever choose Aldi (in fact, the only reason to really venture in was their cheap and unlimited 3G SIM card resales). That said, Rewe managed to also make itself more useful in the process by actually having everything I needed so the extra price ended up working out, to some degree, if you count convenience.
  - sudont 13y ago
    It is. The Aldi's in Wisconsin, USA are pretty much the exact same as the one I was at in Berlin, except for different brands. Pretty much the same layout, except the Berlin one had beer.
    - rthomas6 13y ago
      Aldi in Georgia, USA has beer also.
- joezydeco 13y ago
  Aldi has improved in the Chicago area in the last decade. There's been a wave of new construction in more affluent suburbs and stores have expanded to include liquor sales in certain areas. But yeah, it's still no frills. Staples like milk and baking goods are dirt cheap, but I wouldn't chance the produce. Lots of processed food. Bakery is all mass-produced. Interestingly, the supermarkets I've been to in Germany lately are becoming more like US ones (Rewe, Edeka) but some are still super no-frills (Penny Markt, Norma)

icelancer 13y ago

>Some stores cannot thrive unless they are within SHORT drives of many customers. Some of those stores have to extract a lot of productivity out of each worker to pay the workers even minimum wage. Many, now. Logistics is (and has been) a massively growing field when it comes to deployment of franchises of restaurants as well as groceries and general goods stores. There is hugely growing sentiment against unnecessary driving, partly due to rising fuel costs but I also hypothesize that media pressure of said fuel costs as well as innovation from Netflix etc. drive this signal as well. "Why leave the house when you don't have to" has farther reaching effects than simple DVD rentals. Great post, BTW - and a very interesting subject indeed.

malandrew 13y ago

" But they best gain opportunity to advance themselves economically when they also can save on their own consumer spending in retail stores. Everyone likes low prices day in and day out." Great observation. I know there is a business model somewhere that allows poor people to afford the same economies of scale by splitting bulk purchases somehow. I imagine that one of the neighborhood social networking sites like NextDoor could add feature that allows a neighbor to broadcast their future purchases to their neighbors and other neighbors that want the same product can choose to up the volume of those purchases. This will allow them to save money via volume and shipping. The company doing the sale (whether Amazon, Walmart, or whatever) would deliver all the stuff to that one neighbor and then the other neighbors would show up at the ordering neighbors house to collect their share of the purchase. This would be a very compelling feature for NextDoor or similar site to create a revenue stream that increases their attractiveness to lower income neighborhoods. When adding to the cart, the user can choose to add products publicly or privately so that only non-personal products are broadcast to their neighbors.

eru 13y ago
> [...] same economies of scale by splitting bulk purchases somehow. That's what Wal-Mart is doing, and they take a cut..
shrikant 13y ago
"splitting bulk purchases somehow" is exactly what retailers are doing for you now. This is called "bulk breaking". http://www.encyclo.co.uk/define/Bulk%20breaking http://www.encyclo.co.uk/define/Bulk%20breaking