Articles

The Genuine Article Or A Pretender?

The great thing about retail is the relentless tidal nature of customer relevance.

It doesn’t matter how good you were yesterday, if you can’t deliver today you won’t get the sales. In reality there is no such thing as customer loyalty – just relevance right here, right now. That’s what makes a shopper open their purse. That’s what makes retail dynamic.

When the cycle is in growth new sub-segments emerge leading to opportunity for new retail concepts and new retail competitors emerge providing twists on established retailer’s offers that deliver perceived relevance to these new sub-segments.

When the cycle is in consolidation or decline many of these sub-segments collapse and are assimilated back into the bigger segment from which they emerged leaving fringe or niche retailers having to compete head-on with the very retailers from where their opportunity originally emerged. This is when we find out who – in the customer’s perception – is the genuine article and who is the pretender.

As this is a natural cyclical pattern, we’ve been here many times before through the history of retail. At these times we see retailers step up to the plate and establish themselves as winners. GAP for example made it’s move from being the USA’s biggest seller of Levis Jeans into a vertical apparel brand in its own right – capable of going global – at just such a time.

This is the time for you to be brutally honest with your business and work out whether you are the genuine article or a pretender in the customer’s hearts and minds at a time when their relevance criteria is shifting.

Einstein’s theory of insanity is fitting at this time. “Anyone who does the same thing, time after time – expecting a different result each time – is insane”. If you see the obvious tell-tale warning signs you need to do something different.

Listen to the dialogue between your staff and customers. Look at your foot-traffic. Look at your sales mix. Pay careful attention to your average finished margin dollars and your stock sell through rate. Look for the signs of customer’s changing their perception of your relevance to them and their lifestyle.

At a time when they were impacted by 9/11, the SARS Virus, a United States recession and the Gulf War in quick succession, Louis Vuitton still managed to maintain more than 20% compound growth for three years in a row by maintaining relevance – not by trading off their history.

If in the customer’s eyes you are not in some way uniquely placed or the most relevant option to serve their needs and wants you are in trouble. After all they have choices and most customers today want to narrow their choices – not expand them. Dig deep. Find what makes you the genuine article, make it as relevant as you can to the widest group of people you can, then scream it out loud so they know about it. The greatest sin in retail is to die with your secret.