Thinking out of the box

Jennifer Marks, editor-in-chief -- Home Textiles Today, 3/25/2002 12:00:00 AM

I can guarantee that the majority of the citizens in this nation of ours have never heard of Anna's Linens. Heck, I'm willing to bet that at least half of the citizens in this industry haven't heard of it.

So when the 70-store chain starts talking about going national, going public and growing to a base of 1,000 stores, well, who's going to buy that story?

Okay, maybe somebody at Dollar General (5,540 stores in 27 stores). Or Family Dollar (4,303 stores in 39 states). Or Dollar Tree (2,009 stores in 37 states).

For although Anna's doesn't cater to households whose budgets are quite as constrained, as the extreme discounters do, it nonetheless understands the same concept they do: There is a world full of customers out there that most of the big boxes have no time for.

And before anyone tsk-tsks Anna's ambitions, they might want to consider a few of the ways in which it practices basic retail blocking and tackling.

Targeting a truly distinct market segment. Any retailer's chief executive or marketing guru can articulate his chain's segment strategy. Problem is, most of those strategies have become fairly mushy concepts.

Anna's segment is clearly defined, easy to grasp and simple to envision: working class, mostly ethnic neighborhoods in higher-density population areas. Read it aloud and you'll actually see faces rising before you.

Sticking with the core consumer. The "channel blurring" of which we all so often speak springs from one phenomenon: everybody chasing everybody else's customer.

Anna's doesn't play that game. It doesn't even try to trade up when it could easily do so. Case in point: One of last year's retail collapses washed a boatload of name-brand, luxury bedding onto Anna's dock. We're talking about product that hits a $400 price point at department stores. Anna's put it on its shelves at the store's usual $99.99 price point. The philosophy: We won't make nearly as much money, but we'll sure make a lot of friends.

Merchandising to the ethnic consumer. This has become such a hot concept that every other week seems to bring another consultancy-hosted seminar on the subject. Yet for many, this remains a challenge to execute at the buying and merchandising level.

Creating manager loyalty. Anna's staff turnover is remarkably low by retail standards, and that's no accident. Employee retention, in fact, is one of its operating goals, and the company incentivizes by promoting from within and by rewarding store-level associates with quarterly bonuses based on profit, sales, shrink and average transaction size.

Granted, all these feats are relatively easy to pull off in a small company. If Anna's ultimately decides to pursue the faster-growth, nationwide strategy that it's now talking about, it will face many challenges in hanging on to those essential values.

However, as Pillowtex president Tony Williams discusses on p. 13 in this issue, "This is no longer an America of a huge, white middle class that all wants the same thing in the same size and the same color."

Anna's seems to understand that just fine.