All it takes is enhanced basics to win
Thanks in no small part to our obsession with technology, retail has become un-necessarily over-complicated and confused in an era when adoption of technology promised the opposite. As a result the vast majority of retail has lost the plot as it tilts at windmills that don’t exist and invests in mirages that don’t deliver customer or profit gains. Yet if you look at the few stand out performers in contemporary retail and examine what they do that makes them better, you come back to one glaringly unavoidable truth.
All it takes is enhanced basics to win at retail.
There are seven key areas of retail that facilitate success and of those, three – merchandise selling, environment and cultural behaviours – are the primary drivers.
The acronym I use is C.O.M.P.A.S.$.®. It stands for Cultural behaviours, Organisational model, Merchandise, Promotion, Access, Selling environment and $ Dollar dynamics.
Winners start with cultural behaviours that result in customers feeling that the retailer is in the business of making their life better through great service at every touchpoint. They build on that by creating processes and an organisational model that makes it easier, simpler and more efficient for customers to spend their money with them.
Their merchandise offers a real choice that delivers value for money, acknowledged functional and emotional benefit and is always in stock when the customer wants to buy. Their promotion is informative, seductive and leads the customer to a great outcome for them. Their access model (distribution strategy) is connected omnichannel that facilitates the ability for the customer to choose how, when, where and how they buy.
Their selling environments are multi-sensory delights that work on a deeper level with the customer to create enriching experiences that make them want to spend more time with them. And their dollar dynamics start with an unshakeable belief that if they continue to improve the value of what they do for the customer they can continue to increase the prices they charge over time. They strive to be the best, not the cheapest.
To win in retail you don’t engage in a race to the bottom.
To win in retail you must have the margins and the profit to support continual investment in talent, differentiation, superior customer experience and real innovation that provides genuine, recognised benefit to the customer in a way that can be monetized. Authentic merchants get it. It is the unavoidable basics that need to be delivered day in and day out. Everything else is nothing more than an enabler.
And if you spend more time and money on your enablers than the essential pillars that touch, reaffirm and transact with the customer you will not be successful in retail for an extended period of time. The best retailers in the world are proof that enhancing the basics is what drives the level of sustainable profit that supports real market leadership.
Peter James Ryan is a retail expert and head of Red Communication. 02 9481 7215 or [email protected].