A common mistake seen in all sizes and categories of retail from fashion to shoe stores, fast food to pharmacy is drift. You see it in many products and brands, not only in retail. When Hyundai launched here, it was positioned as a low cost entry level motor car. Over time it added features and the price crept up. This is called image drift; as the brand seeks to become more prestigious. The executives always find a (rational) reason why it must be so. But of course another executive suit
e argues (perfectly rationally) that this gap presents a good business opportunity and very soon there is a new entry level, low cost brand. (Hello Kia.)
The process repeats itself again and again. (Hello Ssangyong and then Great Wall ad infinitum.)
Image drift is the love child of feature creep, and the step child of retail (proposition) drift.
The diagram illustrates how the retail (proposition) drift occurs. Consider these examples:
A fish and chips shop adds chicken burgers, then hamburgers, then coffee.
A pharmacy adds beauty products, then shoes, homewares, and finally pet food.
A ladies shoe store adds men’s shoes, then kids’ shoes, athletic shoes, school shoes, bags, and then belts.
These are all examples of the blue arrow options in the diagram. They chase volume, seduced by the marginal sale. They convince themselves they are chasing an increase in basket size with no clear understanding of what it does to their offer, brand, and customer perceptions of their proposition.
Do you go to the fish and chips shop to buy hamburgers? Of course not. When the fish and chips shop does start selling hamburgers, it is Corner Café – an entirely different proposition.
Does a woman looking for those really special shoes (insert favourite band here) really want to wrestle through the aisles cluttered with kids and trolleys?
Too few retailers go for the red arrow option – because they would be going uphill. Only a rare few even hold their position.
The reason why great retailers are great is that they achieve consistency. Lowes is a great retailer for that very reason. And no wonder, it is more than a 110 years old. Good brands like Sportsgirl, Reject Shop, and Country Road have owned their proposition for as long as I have known them. (The Reject Shop resisting the temptation to go online shows to me that they understand their business model and proposition well.)
This does not mean you cannot reposition or adapt, but changes and additions only work when they fit the original proposition.
McDonald’s introduced fresh options to its menu and added (real) coffee. McDonald’s is about fast family food and the menu is modernised to reflect the tastes of their market, so that works.
Similarly there are newsagents who have added gifts. If you are selling cards, the same customer is happy to buy a gift for the same person on the same occasion at the same place.
But if Domino’s starts selling hamburgers, you can be sure to start selling your shares, because savvy consumers will perceive that as a cynical attempt to capture an additional sale.
In the long run, chasing that shiny, seductive incremental dollar at a lower margin is a counter productive chimera that will destroy your business. It kills your brand; the goose that lays the golden eggs (E.g. Toyota could not become Lexus, it had to create a new brand instead.)
Two strategies to consider instead are:
A service company should ‘productise’, and product companies should create services. For instance, BMW did it with BMW on demand. Patagonia’s Common Threads Partnership is an example of how Patagonia facilitates (offers the service) the recycling of their own clothes. This is completely counter intuitive, but it is exactly the right thing to do.
Strengthen your proposition by purifying it and focusing it. If you sell fish and chips, sell fish and chips that would make Jamie Oliver proud. That is, add some organic fish cake or gluten free batter or whatever. Become a fish and chips shop worth visiting because the service and offer together provide a unique and special experience. (I am not suggesting the shop becomes swanky – just different and interesting and worth visiting.)
“Would you tell me, please, which way I ought to go from here?”
“That depends a good deal on where you want to get to,” said the Cat.
“I don’t much care where–” said Alice.
“Then it doesn’t matter which way you go,” said the Cat.
– From Alice’s Adventures in Wonderland
Adding lollies on every counter is lazy retailing and a sure sign of a retailer drifting down the road to nowhere.
Have fun
Dennis
Read this: warts and all about Fifty Shades of Failure: A Personal Confession.
Ganador: Learning & development for the 21st century retailer dealing with the 21st century consumer.