Two recent business articles have caught my attention. One points us towards “the best of times” in retailing while the other details the quickly developing “worst of times” for many retailers.
The worst of times? “Retailing Chains Caught in a Wave of Bankruptcies” – a story in the NY Times.
“The consumer spending slump and tightening credit markets are unleashing a widening wave of bankruptcies in American retailing, prompting thousands of store closings that are expected to remake suburban malls and downtown shopping districts across the country.”
The best of times? “It’s All About Experience,” an article in Business Week Magazine.
“There is still one frontier that remains wide open: experience innovation. This is the only type of business innovation that is not imitable, nor can it be commoditized, because it is born from the specific needs and desires of your customers and is a unique expression of your company’s DNA. Yet the design of an experience is often overlooked in the rush to market.”
The key phrase – “… because it is born from the specific needs and desires of your customers and is a unique expression of your company’s DNA.”
How do you address your customers? Do you meet both their needs AND their desires? Are you sure? How do you know?
What do your customers experience when they visit your store? When they contact you by phone? When they visit your website?
What are you doing to create a memorable experience for your customers? What are you doing to differentiate yourself from your competitors?
There are three areas for a business to compete; three areas to differentiate your business – people, products and price. Trying to compete on products or price puts you into a vulnerable position. Look at a few stores that are caught in the wave of bankruptcies:
- The Sharper Image – Once, it was a pioneer in both product selection and direct mail marketing. Its “sharper image” dimmed over the years due to a combination of competition (Brookstone, etc.), and products (Oreck Air Purifier, etc.) Their product offerings were now commodities. They made numerous operational mistakes.
- Linens ‘n Things– Drowning in debt. Ubiquitous – its stores are everywhere; but not where people want to go – today. I could never tell the difference between the multitude of home furnishings stores. Obviously, I am not alone in this assessment.
What about the other side of the coin? What about the “Companies that try to create holistic experiences by emotionally engaging their consumers are flourishing?” How do they do it? And what is a holistic approach?
“Companies intending to be relevant today must learn the art of creating experiences that genuinely engage their customers. Choice-fatigued consumers are not looking for another product that hasn’t taken their true needs and desires into consideration. They are looking for companies in which to believe and give their allegiance. They are looking for experiences that cater to their deep-seated desires. This type of engagement requires much more than the latest technological breakthrough: It requires emotional engagement.”
Emotional engagement – this brings us back to competing on the basis of people. How do you, and your people, differentiate your product or service? How do you meet your customers’ needs while “creating experiences that cater to their deep-seated desires?”
You can compete on people, price or product. It’s your choice. Increasingly, your customers are looking for “experiences” when they shop. That can only come from people. You can start to create a unique experience for your customers by addressing them by name. By remembering them. By making them feel welcome. Just that one small step will start to differentiate you from the sea of mediocrity that marks the world of retail.
Speak Your Mind