LORETTA'S CHANNEL

Posted on Dec 07 2017

Pillars of a Successful Retail Strategy

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Price. Selection. Convenience. Experience. 

Those were the four pillars of a retail and Ecommerce strategy in 2005. According to Lee Peterson, in this article, today they are discount, convenience, and “Third Wave”. While I agree with Lee, personally, I’d never eliminate selection and experience, and I prefer value over discount.

On a trip to Rome in 2011, my husband, three kids, and I visited the Colosseum. The dependable pillars of the colosseum symbolize many things, including strength, pride, and resilience. But the fragility of the pillars is often overlooked and losing one means a total collapse. Similar to the ancient roman structure, retail strategies require firm pillars and without one, the remaining ones are nullified. So what do these pillars provide, and how can you apply them?

Value: This is the psyche of consumers wanting a fair price and a good deal. There is nothing more important to shoppers than price, and how customers perceive price is as important as price itself. As a retailer, you should start with the “magic” price for an item or a category, and work backwards to negotiate the cost and MU%.  If you offer great value by setting prices correctly and fairly up front you will drive more sales.

Convenience: As a survival strategy this includes excellent, free shipping, BOPIS, home delivery, showroom (smaller) stores, lockers, pop ups and more. Amazon changed retail forever with this approach, but retailers (online and offline) can quickly deliver on several of these tactics if they use the consumer as their filter for their decisions. In today’s market, free shipping and free returns are points of entry, and all other conveniences should open for consideration as well depending on how your customer defines convenience.

Third Wave: Thinking and acting like a small, unique specialty store. This requires you to be entrepreneurial, invest in your people, create exciting experiences inside the store, and work hard at quality and being a part of a customer’s identity and lifestyle. In stores, retailers need to be in the business of creating unique spatial experiences as opposed to simply housing and selling merchandise. Online, the editorial aspects of product curation is more important than the product shots themselves. Whether online or offline, product collaborations, styling services, and experiential sampling are just a few ways to differentiate yourself.

No matter how you deliver on these pillars, each are critical to a successful strategy and the bedrock of your business. They can be uniquely applied to engage consumers and increase revenue while preserving margins, but the specific application requires a deep dive into your business to determine the best tactics. Like the Colosseum, consistent assessment and reinforcement breeds enduring strength and success.

For direction on building our your growth strategy, and ideas on how you can win across all three pillars, email me at lorettasoffe@live.com

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Loretta Soffe - Principal

lorettasoffe@live.com