Why Shopper Marketing Matters – The Tragic End Of A German Drugstore Giant

On January 23, German drugstore giant Schlecker filed bankruptcy. It is the tragic but inevitable end to a family-owned retailer who failed to recognize the importance of shopper marketing and the need to create a unique shopping experience. 14,000 stores in 9 countries will be closed. 52,000 employees will probably lose their jobs. Shoppers however, won’t grieve over Schlecker’s end as they already decided on its fate.

But how could this once successful company come to such a dramatic end?

The story of Schlecker, which as we now know ends tragic, started like the typical rags-to-riches fairy tale. It is 1974. Germany abolishes the resale price maintenance on cosmetics and health care products. Anton Schlecker, founder of the family empire, opened his first drugstore in 1975. 2 years later there were already more than 100 Schlecker drugstores. In the eighties the company expanded internationally. The son of a butcher family finally made it to the top.

Despite the impressive success, visiting a Schlecker store was far from being an enjoyable shopping trip. The artificial fluorescent light hit shopper eyes and created a depressing atmosphere. The width of the pathways was the exact size of a shopping cart. Impossible to return if you forgot a product as shoppers could not stop without blocking the entire store traffic. The German term for this outlay is “Zwangsführungsstrategie” (forced pathway strategy) which reflects how the company treated its shoppers: Like cattle at the slaughterhouse. Once you enter, there is no return. The smell of chemical industry cleaners fostered the morbid and claustrophobic ambient.

As if the above-mentioned wasn’t horrible enough, Schlecker also earned a reputation of being a  scrupulous employer.

Employees were spied on, exploited, and humiliated. Taking advantage of tenuous labor market conditions, the drugstore giant was alleged to abuse single mothers depending on a regular income. In most stores one single employee had to handle the register, restock shelves, manage inventory and maintain the store clean. As a consequence, most of them were not really shopper-centered friendly shop clerks.

Indeed, it wasn’t a pleasure to shop at Schlecker. Whereas the drugstore giant convinced with an inhuman ideology, its competitors showed that there are other solutions, more successful solutions which are centered around shoppers.

This is the story of another man, Götz Werner, an anthroposophist who has a completely different view of the world. At his company, dm, it is all about “humans” never using the words “employee” or “customer”. The company’s slogan is “dm, here I am a human being, here I shop” (an adapted quote from Johann Wolfgang von Goethe).

Werner encouraged his employees to take their own decisions, taught them that growth comes from good service, and sent apprentices every year to theater workshops for their personal development. His successor, Erich Harsch, states: “If humans can thrive, our business will grow automatically”.

At dm, the store layout is spacious, there is a light citrus scent in the air, employees are numerous, helpful and friendly. In retail studies, dm constantly outranks its competitors. Shoppers come from all ages and social classes. Shelves and aisles are low to facilitate orientation. At every store, shoppers find diaper changing tables with free diapers. The light appears natural across the entire store while the floor resembles “dry forest soil” fostering the natural ambient while lowering noise emissions. Although dm charges premium prices, shoppers are more than willing to pay for the better service and the welcoming atmosphere.

In late 2010, Schlecker made a final attempt. The company changed its logo. Goal was to reflect values such as sympathy and accessibility. A new culture was to follow, a more human one similar to the one of its successful competitor dm. But shoppers already made their choice and this way decided on the fate of Schlecker.

They chose to be treated as humans and not like cattle even if this comes at a premium price.

For more information on sensory marketing, please consult our post “See, Smell, Hear, Taste, Touch – Shop Using All Your Senses!”

Sources:

http://www.sueddeutsche.de/wirtschaft/schleckers-imageproblem-ein-klopapierladen-mehr-nicht-1.1377989-3

http://de.wikipedia.org/wiki/Schlecker

http://de.wikipedia.org/wiki/Anton_Schlecker

http://de.wikipedia.org/wiki/G%C3%B6tz_Werner