I’ve had the opportunity to wear many different hats in my lifetime, sitting on both sides of the table. I was an intern, now I run the intern program. I managed a retail store, now I provide PR counsel to clients in the retail industry.
It’s been sad to see so many retailers struggle in recent years. It’s been downright painful at times to watch them grapple with business strategy-what do you do differently to stay afloat? Where’s the magic key and what’s the magic number?
Too often, retailers attempt to differentiate their product lineups into categories that don’t logically connect. Retailers add product which distinctly goes against the established reputation of the company as a last-ditch effort to keep the doors open and payroll covered.
In college, I managed a niche retail store at a high-end shopping center. The short version of the story goes something like this: This particular company was bought by another well-recognized retailer. This well-recognized retailer soon began changing the product lineup dramatically-”value added” merchandise. During a corporate visit, one of the company’s top management folks ask me, “What would it be convenient for you to carry?”
“Well,” I replied. “It would be convenient for us to carry bread and milk, but it’s not practical.”
The fact of the matter was that this company, like so may others. . .and understandably so. . . set out to score big profits. They wanted to capture every dollar they could from every customer walking in through their front doors.
The challenge becomes that not every store can be Walmart or Meijer. And not every store was meant to be. When retailers begin to differentiate their established product lineup in such a way that it confuses their customers (i.e., does Smith & Sons sell shoes or do they sell watermelons), the last-ditch attempt to continue on with the business is lost.
Customers walk away from businesses that have “too much going on.” If, as a retailer, you want to add line extensions to give your business a little boost. Outstanding. But track the feedback from closely from your customers. And stay within the product family – don’t stretch it and, please, avoid trying to be everything to everyone. That was my point when I replied to the corporate executive who wanted to know what it would be convenient for us to carry. We could have added coolers for bread and milk, even offered to do an oil change for every customer, but where would we stop?
The reality is that we needed, like so many current retail businesses today, not to differentiate to infinity, but take a step back and assess what we sold and how we sold it. If the industry had changed, we needed to change with it. If our customers weren’t going to shopping malls any longer, did we need to go to them? I could rant for several paragraphs about what the company I worked for at the time needed to do, but it’s long it the past.
I’d just like to see our struggling retailers today take a step back and evaluate their business models before they differentiate themselves into oblivion.