Be A Great Niche Retailer

By Rich Gordon AKA Retail Rich

As a writer and retail consultant, I tend to look at specialty stores differently than other customers who walk the aisles of a store. In fact, I’m one of the few men I know that enjoy going shopping, even though I’m not necessarily shopping to buy something, I’m always looking for ideas and especially something that knocks my socks off.  When I walk into a specialty store, I find myself quickly taking in the overall concept and atmosphere, while looking for visual impact and interesting displays.  I’m looking at the merchandise assortment, lighting, inventory levels, cleanliness, signage and even how the employees are dressed. Mostly I’m interested in the customer experience and how well customers are being taken care of. But I’m always looking for something I haven’t seen before, something I can learn, something I can take away and share with my followers on line at retailrichez.com as well as clients.

What I See

Too often, what I see makes me shake my head in disbelief: I see merchandise that doesn’t even seem to belong in the store.  I see stained ceiling tiles and vents loaded with dust and dirt.  I see poor housekeeping in general. The kinds of things that really make a store look fresh and crisp.  Worse than anything, I see too many employees and even managers that seem indifferent to the customers.  It’s like they take them for granted, or they can’t be bothered to taking time with a customer to interrupt what they consider to be more important work.

On the other hand, there are times when what I see just blows me away.  It’s like the mother ship has landed.  Why is it that some stores just really seem to pop?  They’re fun, the employees are nice and helpful and everything seems to run like a top. These same stores seem to be the ones that are exceptionally well thought out, easy to move around in and often a new surprise wherever you turn.

The Best Know Their Niche

They know who their customer is, and who their customer isn’t. They know what business they are truly in and what business they’re not in!  Very little else matters! Just looking at the store you know they’re on top of every detail.  There is no doubt that these people could teach us all something. One more interesting fact:  They seem to have customers in them more so than anywhere else, especially on the days when it really counts.

Planning, Imagination and Discipline Are All Important

For any specialty retailer, large or small, great retail success can be defined as that point where well thought-out planning and imagination combine, and are supported with disciplined execution. It’s kind of like adding 3 + 3 and getting 8.

The fact is that plans and imagination are almost worthless without real discipline and follow through. So you need planning, focus and discipline. Some retailers that have the discipline and follow through may create a nice clean store, but the store isn’t always too exciting, special or cohesive without some planning and some real imagination. You’ve got to know who you are and where you’re taking your store.  There has to be some inspired creativity to be truly special!

The Best Store Owners Are Extremely Focused

We all know that as small specialty retailers, we don’t have the budget, the marketing and the strength of competing with the big boys, and they can’t always do everything their customers would like to see.  We just can’t afford to make too many mistakes or missteps. We absolutely must have focus on that “one thing”.  Remember Curly in City Slickers?

REMEMBER CURLY??   JACK PALANCE

Curly: Do you know what the secret of life is?

Curly: This is.  (holds up one finger)

BILLY CRYSTAL-MITCH: Your finger?

Curly: One thing. Just one thing. You stick to that and the rest don’t mean SQUAT!

BILLY CRYSTAL: But, what is the “one thing?”

Curly: (smiles) That’s what “you” have to find out.

I’m sure that most of us would say that it’s not one thing.  It’s a myriad of things—all critical. But if you think about it, it really does come down to one thing. . . one central question: What is the “one thing” that you do better than anybody else out there. Do you know what that is?  Do you have any one thing or more than one thing you do better than anyone else?  What is the “one thing” that your customers come to you for, before they go check out any other store?

Answering these questions with careful thought, some research, some soul searching and a clear focus is essential to a successful strategy. With a limited budget and resources, we don’t have the luxury to flounder around a whole lot, trying to figure out what we’re going to be when our store grows up. You need to find that “one thing” NOW!  And you need to do that “one thing” so consistently and so exceptionally well, that you begin to build a reputation, which in fact becomes your rock solid competitive advantage against other retailers.  It shouldn’t make any difference whether they are large or small, next door or across town.  The market (this market niche) is your focus and yours to own, period. . . end of story.

A Little More Explanation

Think and breath exactly what the core of your business is to be. Don’t let there be the slightest doubt for your people or your customers as to what your store’s focus is. You must constantly analyze everything you bring to your store in terms of whether it will add to your stores focus as well as the appeal of your core customers who love you because of that “one thing”. Store atmosphere, which includes things such as lighting, fixtures, design, smells, surfaces and touch, music and sound—all most compliment and enforce your core. Everything you do in your store, in terms of efforts, time, energy, peripheral products and services are there to support and play off your core.  There should be great synergy between your core business and these things.  If not, you may be diluting your effect or wasting time, money and energy. Any other products and distractions may be hurting you, your sales and possibly confusing your customers.  Think of these things as possibly “the dark side”.  If you can’t describe what your store is all about in a few words or one simple short sentence, you may still not be focused enough!   I’ll give you two sentences to describe what your store is all about, but you need to include who you are, what products and services you offer, and who your target customer is. The target customer should be the person that absolutely loves you. It may sound crude, but nobody else really counts for much in this objective. By the way, you need to craft this simple sentence to help you establish clear boundaries that limit the scope and range of our business to that “one thing.” Next, I would tell you to read the chapter from my book, “A Line Out The Door” on mission statements. I’m serious. Just keep in mind this won’t be a mission statement that no one understands like you’ve heard or seen before.

Metrics That Matter

I never said that finding and specifically identifying the “one thing” would be easy, but it should be a very energizing and exciting exercise or experience for you.  If you truly are focused, things become a bit more simplified, believe it or not.  It really is like jumping on an exciting train to “clarity,” and you’ve just left behind unneeded chaos and stress.  This train is helping you leave behind the old baggage of questionable product categories, customers who are only shopping you for low prices and unprofitable use of time or expenses. The fact is it’s hard to try and please everyone.  My only fear with this exercise is that many of you may be saying, “I’m already focused on my specialty.  My point is, you may still not be focused enough to be the absolutely best at your “one thing”.  Having that “one thing” should allow you to focus on the metrics that matter.  Zero in on the product information, customer preferences and all other numbers that help you do that “one thing” with a laser-guided focus.

With a new and compelling crystal clear vision of the customers you want to focus on and how you’re going to knock their socks off, you want your customers to come into your store with their mouths hanging open and exclaiming, “the mother ship has landed!  The best stores often look clean, crisp, and exciting because they actually made things cleaner, crisper and are filled with what their customers want.  They have simplified and focused. Things ARE probably simpler for them.  Find that “one thing” in your business, and build an amusement park or wonderland of nothing but your niche, for your niche customers!  They’ll love you for it!

©2011 Retail Redefined and retailrichez.com. All rights reserved.

The Real Thing  (Emotion & Reality)

(Buyer’s don’t look at reality when making a decision)

by Rich Gordon AKA Retail Rich

Have you ever heard the quote, “perception is reality.”  In other words, however you perceive something is what is real to you. Our perception of reality is what really matters in our lives.  If your store is perceived by a given group of customers as the best place to shop in town, to them, it IS the best place to shop in town.  Things don’t have to make sense or be logical.  Reality is not what is important when it comes to things we want to buy.  Perception and emotion take over where reality leaves off.

A company that knew and understood all of this for years forgot this lesson one time and had to learn the lesson once again in a very hard and expensive way.  For years this company made a special product that had no real value at all other than people seemed to like the way it tasted.  It had no nutritional value. It was not really good for you and it was even artificially colored to change its appearance. There was even a movement to have it banned from store shelves, because it was considered harmful to the people who drank it. Over the years, many competitors came on the market and tried to give the company a run for their money.  As it began to approach its 100^th year of business, the company began to see a disturbing trend. For twenty years, the market share of this company had been dropping.  On top of that, one of its many competitors had been gaining ground for years on their commanding market lead and in private and closely guarded company tests, it had now determined that even though it had a commanding market lead. Its competitors product was actually preferred in a blind taste test by the company’s own customers. This was a fact that the company felt it could not ignore.  Even though the company had tinkered quietly with the recipe for the product off an on for years, the number 2 selling product was still preferred in taste tests by most customers. But recently even the competition was performing blind taste test in public to show the world that there product was preferred in taste to the old #1 selling product.

After quietly searching and testing a new recipe for a product that would test and taste better than the upward trending competitor, the company finally felt confident they had a product that could end the disturbing trend and solidify their market position as #1 in the marketplace for years into the future.  In the largest and most significant marketing blitz ever undertaken the news was announced to the world.  The formula belonged to an American icon that had been around for close to 100 years was being changed and improved.  It was a new improved version of Coca-Cola. The company had decided that it was more important that the drink continue to be the best tasting drink in the world than to stay with an outdated formula that studies had shown people no longer preferred.  Research showed that consumers wanted a smoother and sweeter tasting drink, for marketing purposes; focus groups had also shown that the word “new” provoked an immediate and positive response.  Coca-Cola spent approximately $4 million to research and create New Coke.  The research, taste test and tons of data revealed the following:

#1 In Preference  New Coke

#2 In Preference  Pepsi

#3 in Preference  The Old Traditional Coke

The figures easily indicted that New Coke was preferred over both of the other drinks!  A news conference was held in January 1985 by the company CEO who announced to the world ”the best soft drink in the world, Coca-Cola, is now going to be even better.” The news made front-page headlines all over the country, and topped the news around the world.  On the same day as the announcement, Coke’s major competitor, “Pepsi” put out front page ads in the nations leading newspapers saying, “the other guys just blinked” and that Coke was reformulating their brand to be more like Pepsi,” because the fact has been, that “Pepsi tasted better than Coke.”

A whole new look was adapted for “New Coke” while still keeping the traditional company logo and trademark that was the most recognized and valuable in the world. In spite of Coca-Colas very expensive and very detailed planning, within days, 96 percent of all Americans knew about the change to Coca-Cola and the large majority of them were not happy.  Coca-Cola in it’s efforts to be proven right, in their decision invited millions to taste the New Coca-Cola at grocery stores and other locations around the country.  It made no difference.  Coca-Cola drinkers were not happy!

40,000 letters protesting the change came in to the company.

Tens of thousands of unhappy calls were coming in to company switchboards.

At the Houston Astrodome audiences booed New Coke commercials on the giant video screens.

A Washington Post columnist chided that, “next Week they’ll be chiseling Teddy Roosevelt off the side of Mount Rushmore.”

One customer wrote in, “Would it be right to rewrite the Constitution? The Bible?  To me changing the Coke formula is of such a serious nature.”

On PBS MacNeil-Lehrer News-hour, 20 minutes was devoted to the New Coke debacle.

Coke held taste tests to prove their findings and to prove that all the criticism and hate mail was mistaken.  Taste test again showed

1.  New Coke

2.  Pepsi

3.  Old Coke

“New Coke’s taste, continued to beat out both old Coke and Pepsi in blind taste tests.  No Contest! The management of Coke was ecstatic. They were sure they had made the right decision after all.  However, considering the major backlash and it’s public relations nightmare, Coca-Cola decided to keep the old Coke, calling it “Coca-Cola Classic” in an effort to placate its loyal customers. This too made front-page news in virtually all newspapers around the country.  The idea was that in time, the stubborn traditional Coke lovers would learn to love “New Coke” too.  But, by the end of the same year, after all was said and done the sales figures over the following months indicated the following:

#1  Old Coke (now called Coke Classic)

#2  Pepsi

#3  New Coke

The taste test proved conclusively without a doubt that the New Coke tasted better than the others.  How could they have possibly screwed up?  Coca Cola had just made the largest marketing mistake in history!  The problem was that Coca-Cola researchers had missed one very critical factor.  The researchers had never told their consumer/testers that the potential new formula would replace the old formula. Evidently Coke drinkers had thought it would be an alternative to their traditional Coke!

The facts of history will show that America loved the taste of “New Coke” better, but yet consumers would not even admit it to themselves, thus making things miserable and embarrassing for Coca-Cola. New Coke had become a dismal failure and amounted to no more than 3% of the market by April of 1986, a little over a year later.   The fact is that Coca-Cola had done such a tremendous job of marketing over the decades and becoming interwoven into the American fabric, that replacing Coca-Cola was indeed “like breaking the American dream, or like not selling hot dogs at a ball game”, as one loyal consumer put it.  While everything else was changing in the world, consumers wanted their Coca-Cola to stay the same.  They loved their Coca-Cola and all of the studies and all of the brains, marketers and analysts had never considered the most important emotion of all. . . LOVE.  Yes consumers buy based on emotion, not logic, and for 100 years Coca-Cola had sold and built a brand based on emotion.

©2011 Retail Redefined and retailrichez.com. All rights reserved.