The following information was provided by Mike Bills at Fitch:RPA:
1. Accept that your consumer, not you, is in control. With very few exceptions, the consumer has innumerable choices in acquiring ei-ther exactly the same, or very similar, products that you create and/or sell. The choice is no longer merely about minimizing cost and maximiz-ing efficiency, but also about pleasmaximiz-ing and even surpassmaximiz-ing the expecta-tions and desires of today’s multichannel shopper, who has more choices than ever. Acceptance will allow you to focus on what really mat-ters, regardless of what Wall Street might be telling you. Also recognize that control is a relative desire, often served by perception more than
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ality. For example, with the plethora of choices often comes confusion and indecision, inducing an overwhelming “out of control” emotion.
One resolution to enhance the perception of “control,” and thus the consumer’s reality of it, is for retailers to become an editor of choice.
Thus, often, less can be more.
2. Really get to know your target consumer. Get to the heart of understanding who your target consumer is both in market size and po-tential, and, more important, what drives and motivates consumers’ in-terest or potential inin-terest in your products and services. Don’t just observe their shopping preferences and buying habits regarding fre-quency, convenience, price points, and selection, but also explore their deep, emotional desires relating to your offer—wants versus needs, tastes versus habits, emotional interests versus rational, pragmatic choices.
3. Invert your development process to begin with the consumer.
Develop products and formats based on what consumers want and need versus residual output from R&D that the organization wants to find a use for.
4. Understand and play to your strengths. Embrace your core capabilities and competitive differences and emphasize your strengths.
Determine the values your brand truly believes in and can support and back up—not what the competition is doing, but what your company does best and how your offer can enhance the lives of your consumer.
Most critical, do not promise what you cannot deliver. The market sets base-level expectations. If you promise above those, be prepared and ca-pable of delivering on the expectations that you set. It is better to sur-prise and delight than to disappoint.
5. Don’t keep your positioning a secret. Talk to consumers di-rectly and consistently about what makes you truly different and best at something that your competitors can’t do better.
6. Let go of your weaknesses. Accept that on some fronts the competition is better, stronger, and more proficient and, as a result, may have a permanent lead on you. This doesn’t mean not to try and improve and compete in these areas. It means finding a niche and a particular tar-get consumer that values your strengths over those of your competitors.
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7. Force organizational innovation. This is not about the CEO’s perspective. This is about a wake-up call to your company, preferably when you are doing well, so you can continue to ideate, test, and stay ahead of the competition. Instill a sensibility of innovation among your employees. Remember, innovation should be tested constantly, and mis-steps won’t hurt the bottom line because you won’t roll it out until it works.
8. Don’t confuse design with decorating or an experience with entertainment. Making your store or product more visually appealing and easier to use or shop is important but provides only a temporary competitive advantage. Identifying, communicating, and encouraging interactive experiences between your consumer and your product or store environment, on the other hand, can provide a long-term compet-itive advantage. And remember, experiential design is an interactive ex-perience, not passive entertainment that a consumer watches.
Interactive experiences invite repeat patronage; passive entertainment is over the minute the consumer has “seen the show.”
9. Stop decorating around existing operational parameters.
Consumers don’t care about how much product you lose to theft. Nor do they care that product is positioned in a particular department due to lower placement costs. They also don’t care that a particular product function was cheaper to develop than if you’d given them the function they wanted. Instead, they want what they want, and they’ll get it from whoever gives it to them in the manner they insist on. The first to do so stands a far greater chance of being rewarded with long-term loyalty and financial success.
10. Create compelling retail experiences. Emulate experience leaders. If you are a pet supply retailer, offer grooming and obedience school. If you’re a toy retailer, test party concepts that mom and child both desire. Electronics? Offer videotaped instructions of installation of their purchase. DIY? Offer meaningful classes in home improvement within an environment that facilitates both awareness and learning. Fur-niture store? Provide a playground environment with child supervision.
If it puts more product in the average basket, increases dwell time, in-creases average ticket, steals market share, and begins to build loyalty, then there will be a way to operationalize the solution and minimize in-creases to staff costs. But if you don’t, you may never know and are
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ing yourself up to the possibility that your competition will implement these or other ideas that emphasize their strengths and positioning.
11. Stay on top and start early. Early warning signs are often missed by retailers mired in the day-to-day, short-term myopia created by operational efficiencies and Wall Street. More often than not, retailers try to make paradigm-shifting decisions too late. And while they still manage to create new and differentiating decisions, they no longer have the time to allow for the ideas to manifest with consumers and produce the desired impact. Thus, we find that the retailer ends up “Killing the CureSM” and not saving the ship.