Turning now to our last two strategic groups, the Unicorns and the Undifferentiated, both are at opposite ends of their own spectrum.

Unicorns, indicated in the chart, operate on a different plane:

• Are in the top 3 in the industry on Quality without asking for much, if any, of a trade-off compared to the average retailers on Savings (e.g. Trader Joe’s)
• Have the opposite positioning like Market Basket and Winco
• Or clearly offer both differentiated Quality and Savings, requiring almost no trade-off at all among customers to shop there (e.g. H-E-B, Costco, Woodman’s)

Meanwhile, the Undifferentiated, which consist almost exclusively of regional supermarkets, are below average at both Quality and Savings. Or they are just purely average, in equal measure. In other words, they don’t provide a customer value proposition that has a clear competitive advantage in either pillar while simultaneously not clearly signaling to the customer a sharp brand position toward either the Quality side or the Savings side.

They haven’t chosen a lane.

The implications are clear, especially in Emotional Connections with shoppers (by far the lowest among strategic grouping) and sales per square foot (among the lowest). This signals that profitability is likely an issue compared to other retailers. Growth is also among the slowest.

Contrast these measures with Unicorns, who are clear leaders. They achieve these leading metrics without seeing much of, if any, other trade-offs in outcomes. They have solid consumer penetration in their trade-areas and a leading per customer share of wallet. The ROI on differentiation of the customer value proposition is clear, and the opportunity cost of the failure to pick a lane and execute in a way that you’re obviously differentiated is also clear.