It’s not uncommon to meet owner-operated retailers who are trying to follow the strategy of being good at everything. Unfortunately, this approach does not work all that well. There are far too many smart, aggressive retailers offering their customers shopping alternatives that are superior in– assortment, price or service – while being at least competitive at the other two.
Adopting a specific marketing and operational strategy gives these stores a competitive advantage that adds value to the products they sell and differentiates them from the competition in a distinctly superior way.
This ability to focus resources in a single strategic direction is a big reason why some stores succeed while others fail. The successful stores know where they are going and how to get there. The others lack a viable strategic plan to achieve their goals, and wind up being mediocre at everything – which does not differentiate them in customers’ minds or meet customers’ needs.
One Step Further
Once you have thought carefully about assortment, price and service (see Competitive Strategies for Retail); you need go one step further in developing the strategic framework for your business. You need to add your “secret weapon.” This is the one thing that only your store can provide – the one thing that no other store can deliver. A less-inspiring name for this is “unique selling proposition” and you will find plenty of articles about it online.
Whatever products you sell as a retailer, you need to have some kind of secret weapon. Otherwise, your retail business will just be the same as every other owner-operated retail business that sells similar products and competes in the service arena.
Customers will have no compelling reason to shop in your store because they will not understand which of their needs it can meet.
This implies that you should choose your secret weapon based on the needs of your customers. As you decide, keep an important lesson from Marketing 101 in mind: customers never need to buy drills, they need to buy holes. In other words, there is always a deeper level to their apparent needs.
If you ran an eyewear store, for example, your secret weapon might be the fact that you are an artisan who can custom-create eyewear. Instead of just talking about “glasses,” you would talk to customers about “unique, hand-crafted frames that compliment your unique personality.”
This statement appeals to both the apparent need, which is glasses, and to a deeper need, which is individuality – something that the store’s secret weapon can deliver effectively.
The big question now becomes whether there are enough customers who need both glasses and individuality for this eyewear store to be successful.
Draft Strategic Framework
The following is not a complete strategic framework for an owner-operated retail business because it does not describe the store’s secret weapon, but it is a good first draft.
“My store will be competitive in price with other stores in the market, but I will not meet discount-store prices. I will shop my competitors regularly and make sure that I am never more than 20 per cent higher than the lowest price in the market.”
“I will carry products that are important to my customers and never be out of stock on basic items, but I will not dominate any merchandise classification.”
“I will earn my margins and truly amaze my customers by providing the best ‘extra mile’ service they can find. This will include detailed product knowledge, an amazing in-store experience, after-sale service, free delivery and a make-it-right returns policy.”
If your retail business is to succeed in any given niche, you cannot assume customer behaviour based on media reports or big-picture survey results. Instead, you must really get to know your potential customers, especially their needs and how to reach them.
Are there enough customers in your market area who need both your product and the deeper need that your secret weapon can deliver? Making your business unique is not an easy thing to do, but it is absolutely crucial to your success.
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