Retailers have been especially hurt during the GFC and many are finding it a slow journey of recovery. The easy way for the competitor to gain market share it is to announce to the consumer they have a cheaper offer than yours. Price is and has always been an issue in the consumers mind, but you cannot let it dominate your marketing strategy. The fashion industry around the world has seen numerous brands damaged by the 70 percent off sale strategy that has occurred over the last three to four years. It works for some time and it will work for some retailers, but by over focusing on a price strategy at the expense of the values within the brand can dilute the brand in the customers mind. Retailers need to look at what the perception of the brand is in the customer's eyes and then start building on that perception. Only one retailer can "own" the cheapest price perception, other retailers have to find their unique selling proposition.
Lesson Two: Keep To Knitting
When retailing gets more difficult there is a tendency to look at what can you add to the range to encourage people to buy your products. I always remember visiting a supermarket that was in financial trouble. The owner, being aware of the problem, went to the Middle East and introduced a cheap clothing and table lamp line into the store in an effort to boost sales. The customer was expecting to come in to the store to purchase groceries, not clothes and table lamps. The owner had missed one of the important lessons. When retailing gets tough you keep to "knitting" and become the destination for what you do in the customer's eyes. It can be difficult, but the consumer will look to the perceived retail expert, that includes having a wide and deep range in your core retail activity zone and not diversifying so you look like a "me to "retailer.
Lesson Three: Do Not React By Copying
Yes, you should always keep an eye on the competition, but you should not copy the competition. The competition will be flattered if you do copy them, but it will not win you many new customers in the long run. Copying just adulates the competition and in the customers eyes says you are a "me to" retailer, rather than a retailer who is out there creating your own experiences for the consumer
Lesson Four: Be A Proactive Leader
You need a strategy that you can own that differentiates you from the competition. This means developing your own ideas that are unique to you. This may mean you need to look at retailers in other retail sectors that are doing something different and translating their ideas to your own retail sector. It is rare to find new and novel ideas by just looking at your own retail sector.
Lesson Five: Where Are the Winners?
What are the winners in your store and what are the losers in your store. Shed as many of the losers that you can whilst still maintaining your integrity in the eyes of the consumer and promote the winners in your store. I work with many retailers that do not even know the winning and losing products in their store. Get to know them and develop them.
By following these five lessons you can ensure that you are able to maintain your leadership and keep your competition guessing about what you are going to do next.