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Less is more when it comes to specialty retail

Retailers are under threat from all sides. First it was the big discounters buying in bulk and passing on their efficiency as lower prices, then it was parallel importers and generic copies flooding the market with cheaper goods, and now e-commerce is allowing consumers to shop without having to visit a store. 

john saywellAt the recent Morgo conference for entrepreneurs in Queenstown, Rod Cuthbert, the founder of online travel experience company Viator, provided a secret for the survival of specialty retailers – a curated product range.

Viator is a world leader in providing online bookings for quality tourism activities. Whether you want to experience cruising on Milford Sound, trekking in Peru or wine tours in France you will find a range of tours on the Viator website. Because of its international credibility Viator takes the risk out of booking and payment - but the key to its success is the fact that the product range has been carefully curated to ensure a high quality experience.

You might think that internet search engines would destroy the Viator business model. Consumers can find all of these tours on Google and most operators provide a method of booking and paying direct. But the ready availability of online goods and services creates a big problem – too much choice.

A fundamental job of any retailer is to help customers to choose. By curating its product range, and adding its seal of approval to selected tours, Viator makes each customer's choice safer and easier. Viator has established a clear strategic position in the market as purveyors of high quality, unique tours, and built in a quality control programme to ensure that everything it offers lives up to expectations.

So there’s the lesson for retailers. Unless you want to be cheapest or carry the biggest range (and let’s face it – those positions are already taken in most product sectors) then you need to decide what range of products you can offer that will provide a uniquely satisfying shopping experience. What product attributes will attract a loyal, profitable group of customers to your stores?

It is relatively easy to put one of everything on your shelves, but the smartest retailers are defined by what they say no to. By establishing a strong product selection 'compass' based on attributes that matter to your target customers (like quality, efficacy or sustainability) your curated range becomes a symbol of what you stand for.

Getting this right endears you to your customers, staff and suppliers and is a great defense against competition – whether it comes from other retailers or new channels.

So there’s the challenge. Specialty retailers need to identify a differentiated position in the market, and then invest in expert curators to select and maintain a tight range of products that fits with their strategic positioning. That’s what makes a retailer truly special – but if it was easy, everyone would be doing it.

John Saywell is chief executive of RPM Retail and blogs at Retail Scientist