When retailers do what everyone else is doing they become the same as everyone else. And when everyone is doing the same thing there is no advantage, no differentiation, no reason for a shopper to turn left or right or choose you.
Over the past year I have been working with several retailers undergoing transformation within their businesses. Often as a result of a leadership shake-up due to mediocre performance over a number of years, they have woken up to the fact that they are sitting in the middle. And the middle is not proving to be a sustainable, profitable or comfortable place to be.
The middle was a place they probably gravitated to quite rationally. In my past life I took some retailers into the middle as it was, at the time, the place with the best available market share and transactions.
But the middle is the place where you try to be all things to all people. It is the place where you may have been pushed by stakeholders who are after short-term gains or are risk averse. It’s also the place you sit when times are tough and you hunker down to watch out a storm.
The middle is where the landscape is vanilla and where what you offer can be bought somewhere else, perhaps cheaper, more conveniently, accompanied by other stuff or with a different experience. The middle is the place where you are a commodity with no discernable point of difference. The middle is boring and difficult to defend. It is where you are always watching others and your back, rather than crafting your own future.
Retail businesses need to be very careful about sitting in the middle and I’m glad to know many retailers working hard to secure their competitive point of difference. Pharmacies, gardening nurseries, bedding retailers, electrical suppliers, women’s fashion retailers – in all these areas, too many are operating in the middle.
But let’s swing by some of those who have carved out their own space and are staying true to a clear point of difference through expertise, specialisation, curation or experience.
Mitre 10 carved their space years ago around being big. Big was good. But with the entry of Bunnings into the market and with The Warehouse occupying the home of big and cheap there was a chance Mitre 10 could be stuck in the middle, only able to compete on price. However they understood their shoppers, the home DIY-ers and identified their dilemma, ‘How do I do it?’
Embracing that thought and putting it at the heart of their proposition became ‘ DIY, it’s in our DNA’.
Hence the birth of ‘Easy As’, a series of step by step instructional guides and videos to show you just how easy it can be. The guides demystify some of the craft and graft and enable a strong path to purchase for the shopper to get everything they need to do the job under one roof.
The fierce electrical appliance battleground is one I was all too familiar with when I worked at Noel Leeming Group. It was difficult to differentiate on product and bloody hard to continually compete on price, with margins screwed down tight. Whilst you could lock in exclusivity for a period, New Zealand is too small for this to be sustainable. Even having first mover advantage online was only for a fleeting period. Which is why I think the recent acquisition of Macleans Computing to support the Tech Solutions offer is genius.
In a world where technology is constantly changing, a mobile technician will come and make all your problems go away by getting you connected, fine tuning your technology and making it all come to life for you.
A new revenue stream for Noel Leeming means they can remain competitive on the widget and sell in the service they provide. They have created a point of differentiation over their competitors and found a way to stay relevant rather than sitting in the dreaded middle.
Ezibuy – Modern Curves and Luxury Linen
Beyond the catalogue to shopping at your convenience, Ezibuy has established its point of differentiation through Modern Curve, which caters for the fuller figure. By having the right combination of everyday staples, fashion forward products and even boots that accommodate people with real calves, they have attracted quite a following.
Talk to women and after a few drinks they will tell you their secret is to mix Ezibuy staples with their fashion and consider themselves quite the smart shoppers as a result. Ezibuy are also sitting on a goldmine with their home offer as well which is a sleeping giant, literally. Try out their Egyptian cotton sheets, luxury at a quarter of the price of brands such as Sheridan.
Tontine Freshness Stamp
One final example is Tontine pillows. OK, not exactly a retailer, but a great example of how to remain relevant and encourage repeat purchase over cheap Chinese imports by moving away from the middle.
Have a look at this case study which demonstrates how to create a point of difference through a fabulous, albeit simple, solution to a problem which, as a consumer, you weren’t even aware of. Brilliant.
Don’t remain at risk, move away from the middle.
JK recently closed its stores. Was it because JK sat in the middle? I could get cheaper, similar kid's clothes elsewhere, or more fashionable and individual clothes elsewhere, or brands I would be more proud for my kids to wear elsewhere.
There are many mediocre retailers at risk in New Zealand right now. Don’t be one of them, find your own way.
As you kick into 2014, make sure you understand (1) what is your market position and (2) what does this mean for your offer?
Once you have this clarity then defining and maintaining your positioning becomes the craft of focus, commitment and delivery. Always give shoppers a reason to turn left or right, to choose you.