Newsletter Sign-up

I love my home. It once served as the office and candy/cigarette warehouse for Gragnon's Wholesale. Gragnon's was a family-owned business that operated successfully from the 1930s to 1998. My home was built to last. The business wasn't.

We sold candy, cigarettes, canned goods, school and paper supplies and other merchandise to the corner and rural grocery stores that dotted the landscape though out southern Louisiana. When I was a boy corner grocery stores were ubiquitous. They were small. There were shelves, display cases, a cooler, a counter and a cigar box or drawer to handle the cash. The aisles were narrow so more inventory could be crowded in. The choices were limited -- really limited.

Gragnon's was forced out of business because of disruptive technology. The technology initially was fun and useful. Unfortunately when the marketplace embraced what was once considered a "toy," it created a trend that resulted in many family businesses being closed. I can't say technology killed the business because we peacefully coexisted with this new gizmo for a few years. We owned two of these toys.

Technology can be tantalizing. Disruptive technology often creates enthusiasm, awe and even obsessions. (Think smartphones.) It's often fun. This same technology when embraced by the marketplace sometimes turns deadly. It can be terminal. The technology that led to our demise was the "shopping cart." The trend the shopping cart created was the super market and eventually box stores like the Wal-Marts and Targets we see today.

Big stores didn't create the shopping cart. In my opinion, the shopping cart created the big store. The shopping cart would not have worked in the corner grocery because the aisles were too narrow and we never bought enough at one time to need a "wagon" like that. The super store would not work without the shopping cart. Picture yourself walking from aisle to aisle in a Wal-Mart and then carrying all that you can hold to a counter top, repeating this activity several times and then finally being checked out.

The trend of bigger stores, more choices and better prices began reshaping the grocery industry, our communities, Main Street and our society. Gragnon's was one of the losers in the transition. Winners included the big stores that could create value for the consumer by offering more options, lower prices and a better shopping experience.

Other beneficiaries were those who couldn't get big but were flexible and innovative. To assure their profit and sustainability they changed. They found a competitive position by offering unique products or services, aggregating their buying power to create scale and competitive prices, and recognizing that meeting the needs of the customer was more important than focusing on the demands of their suppliers.

The shopping cart also brought us convenience stores because not everyone always wants to spend the time and energy or endure the hassle required to shop at Wal-Mart. Grocery-delis, boutiques (honey ham stores, cookie shops, etc.), wine-and-cheese shops and liquor stores were specialists rising from the ashes of Gragnon's and the corner and rural stores that we served.

At its best Gragnon's included a series of buildings totaling 12,000+ square feet, employed 35 people and served an evolving southern Louisiana marketplace. We operated five or six trucks. There were several salesmen (producers) calling on customers in company cars.

As an aside -- the shopping cart reshaped Main Street retail as well. Drive through any Main Street and you'll see buildings built to last but no longer occupied by the businesses they were built to house. The structures were solid their business models weren't.

I believe the technology that helped to eliminate Gragnon's again threatens many of today's retailers and intermediaries. It's taken out travel agents, record stores and many of the video rental box stores.

Many agencies and banks will be next. They don't have to be. To survive and prosper a few realities must be acknowledged and changes made. Most importantly you must know that your future is not about place or tradition. Tomorrow's success is at the intersection of scale, scope and client intimacy all of which assure you can anticipate clients needs and meet them quickly.

In 2003 Amazon's net income was about $35 million. In 2012 it was up by $600 million. Its genius is technology that knows its target audience, each individual's wants and needs, anticipates their behavior and has a shopping cart waiting in the portal!

July 9, 2012

Copyright 2012© LRP Publications