eq-life Concept Sells Life Solutions
By George Anderson
Best Buy’s new concept store, eq-life, is in the business of selling solutions to the needs of women.
The store is a place where technology and health merge, with consumers being able to purchase vitamins and prescription medicines as well as digital cholesterol machines and
glucose monitors.
Mike Marolt, president of eq-life, developed the concept to help thirty- and forty-something women, who may be caring for kids and even their parents, learn how they can use
health technology to simplify and improve their lives.
Consumers do not appear to be getting what eq-life is about, at least at first, but they are making repeat visits to the store. Company research shows it takes four or five visits
for the “aha” moment to take place.
“It’s a blessing and a curse,” said Mr. Marolt. “The cool thing is, they want to come back.”
While its success is far from guaranteed, a St. Paul Pioneer Press report suggests that eq-life is the beginning of a new wave of retailing, calling it “a perfect example
of where shopping is headed: multipurpose, experience-oriented environments that provide a sense of enrichment, which inevitably inspires us to buy stuff we’re certain will improve
our lives.”
Moderator’s Comment: Is retailing headed to “experience-oriented environments”? What are your thoughts on the potential of the eq-life concept?
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George Anderson – Moderator
All this talk of “concepts” and “delivering enhanced consumer value” is well and good, but as a consumer who has recently visited one of these stores (Oak Park Heights, MN), I was rather appalled at the level of service. Yes, there are some cool services and products, but the combination of these services (salon, exercise studio, coffee) and products (high end cosmetics, books) presents some challenges. I was asking basic questions and not getting very satisfying answers. Perhaps with this kind of new retailing channel, a new kind of training/orientation/customer service model will be needed as well.
eq-life is the first entirely new retail concept I’ve seen in 30 years that’s exclusively focused on serving the needs of its target shopper, i.e., upscale females aged 35-50 who are primary care givers for their own family and, in some cases, their parents. Talk about a sweet-spot in the market.
The great thing we’ve found at eq-life is that they’ve succeeded in broadening the definition of shopping experience. You’d expect the decor and service to be different, but what’s unique is the mix and juxtaposition of products and the fact that key services, i.e., spa and beauty, are both available in-store, backed up with a very pro-actively oriented pharmacy.
This is a very different store.
I recently observed a presentation on eq-life. One of the most exciting aspects of the presentation was Best Buy’s commitment to “not knowing.” The eq-life concept is a disruptive innovation in retailing, and disruptive innovations take time to generate critical mass, as well as patience, in figuring out the right formula. As I understand it, eq-life is still understanding shopping flow behavior, in-store merchandising layout preferences, and the overall need-fulfillment equation.
On the surface, eq-life brings together in one place a series of products and categories which in and of themselves do not have sufficiently high rate of sale to warrant major investments in traditional retail spaces. The premise is that these products and categories are related to the extent that the entire market basket becomes sufficient to support the required sales per square foot.
Like any upscale concept, the chain may have limited viability – limited in comparison to Best Buy or any other mainstream concept. There are going to be, at least for a while, a limited number of metropolitan locations where enough target customers exist to support the economics required for profitability. Right now, Best Buy is not specifically in search of current profitability. They are in search of future sustainable profitability.
I think the fascinating aspect of eq-life is to study the changes in merchandising, format, layout, marketing, and in-store operations Best Buy institutes over the next year or so. Best Buy has a reputation, well deserved, for using data appropriately, and for managing innovation effectively. The degree of disruptive innovation embodied in eq-life is new for Best Buy. This will make an excellent case study, if nothing else!
The eq-life concept is huge and the healthcare industry is growing fast, with no plateau in sight. Many consumer trend gurus currently tout the increasing importance of the experience in decisions about where to shop. Seems to me that Best Buy has hit on a convergence of trends here. However, the comparison to Starbucks only works to a point. This is a much more complex proposition/need/experience.
You can call it what you want but I think it is really about delivering enhanced consumer value and solutions! Value = Benefits/Price vs. Competition. Consumers/customers are looking for a number of things, including solutions, simplicity, convenience, time savings and trust in what the buy, Sometimes they are looking for help and service and sometimes they want to do it on their own. This is not new – Marsh has a store in Ft. Wayne IN that has been doing this for a couple of years. Packaging suppliers (like Sonoco) are now doing all the packaging for razors for Gillette and so on. We are seeing more channel blurring, experiential marketing and an increase in service offerings. It is all about providing consumer value. And guess what? Value is money and profit. According to an FMI survey, 2/3 of shoppers are time starved or carefree spenders and are looking for these kinds of benefits. I think we will see more of this in the future. We are at the front end of the curve and we will know it is done when they decide to do it for the weaker sex – us men!
An appeal with more than one hook, if executed well, is always stronger than a single appeal. The in-store cafes reinforce the large bookstores, for example. The key is the execution, since many retailing companies have trouble executing their single hook. And when you have trouble executing a single hook, you have no hook.
Having been in the Edina store several times, the convergence of a various number of health and wellness offerings, all packaged together in one retail box, is clearly unique. It is a focused, deliberate approach to reach the target market and one can find virtually any health related item, from electronics used while exercising to genetic testing kits. I think this will prove successful if the company can maintain a focus on a what, today, is a very small piece of their business.
I actually see eq-life reinforcing two trends at retail . . . experience-oriented retail (a la Apple) for sure but also grouping seemingly unrelated items into a lifestyle shopping experience – everyone from Target (their new store layouts) to Virgin Megastores (introducing apparel and merchandising it into collections with the tunes) is doing this in some way.
I personally have not experienced the eq-life store, but would second what everyone has said about Best Buy’s ability to make it succeed. I also really like what Carol Spieckerman said about how a key element of the store is the grouping of seemingly unrelated items into a lifestyle shopping experience. I agree we are seeing more and more retailers do this successful.
In regards to the question about retailing headed to “experience-oriented environments,” I believe that as pricing becomes more and more transparent, with discounters like Wal-Mart and Target continuing to sell more premium products, that retailers will have to differentiate themselves by creating more of these experience-oriented environments. Sell it cheaper or selling it differently but anything in the middle is going to be difficult. One of the comments that really stood out for me was, “Company research shows it takes four or five visits for the ‘aha’ moment to take place.” How many stores could even pull back the consumer four or five times until the “aha” moment happens? Only a store that delivers this type of experience, where the store itself and the feeling I get when I’m there is enough reason to return.
I think we’ll see more and more stores that will be based upon a lifestyle and the results of the products they sell, rather than the focus on just the products themselves. The only way to do this effectively is to do it via these experience-oriented environments.
eq-life will succeed! With the retail experience introduced to the equation by Best Buy (one of the premier retailers in our country); the health and wellness revolution that continues to increase; ideally-targeted messaging and promotion; and well-executed plans — with a focus, this will be a winning format. Our firm has admired it (and actually participated in its launch) from its inception and I have confidence that this is one that will be the preferred format … emulated by many … but heads and shoulders above most.
Well done, Best Buy! Continue to have patience with the concept. It is only now attracting its much deserved attention!
Being a woman between 40 and 50 (I won’t tell you which way I’m leaning), I fail to see the tie-in of eq-life to “upscale women who are the primary caregivers of their families or aging parents.” For upscale women who are concerned about their health and who can afford the luxuries of services such as spas, salons, nutritionists, specialty coffees and facials, this site is an innovative e-tail; however, many women who are primary caregivers and who care for aging parents do just that AND work. Even though this site saves them time, i.e, convenience of shopping, many, if not most of these women rarely have the time to take advantages of these types of luxury services. In this respect, if the target audience is truly upscale women caregivers, I think the e-tailers need to revisit the needs of these women.
Honestly, I am not a real big Best Buy fan. I would prefer to get my electronics elsewhere. However, They are on the right path. I believe they will be trend setters by offering multi-shopping experiences. They will appeal to a much wider audience. Even those who are not big Best Buy fans may give them another shot.
Yes, this is a great concept; the key is the consumer has to be educated as to the value of the shopping experience. Typically, retailers have left the educational aspect to manufacturers and the role the retailer plays is in distribution of the product. In this case Best Buy is doing both. Another retailer who has gone down this road is Starbucks. When they first opened consumers questioned why they would pay for “overpriced” coffee; today Starbucks is extremely profitable. If Best Buy is willing to stay the course, they’ll eventually have a well-defined profitable segment.