Retailers who chase this, will drift nowhere

The curse of retail drift, and how to avoid it

A common mistake seen in all sizes and in all categories of retail from fashion to shoe stores, from fast food to pharmacy is ‘drift’.

You see it in many products and brands, not only in retail. When Hyundai launched here, they were positioned as low-cost entry level motor car. Over time they add features and the price creeps up. This is called ‘image drift’; as the brand seeks to become more prestigious.

The executives always find a (rational) reason why that must be so.

But of course another executive suite argues (perfectly rationally) that this gap presents a good business opportunity and very soon there is a new entry-level, low cost brand. (Hello Kia.)

The process repeats itself again and again. (Hello Ssangyong and then Great Wall ad infinitum.)

Image drift is the love child of feature creep, and the step child of ‘retail (proposition) drift’.

 

Repositioning a Strategic Context.PNG
  • The Fish & Chips shop adds chicken burgers and then hamburgers and then coffee.
  • The Pharmacy adds beauty products, then shoes, then home wares and finally pet food.
  • The Ladies Shoe Store adds Men’s shoes, then kids’ shoes and then athletic shoes and then school shoes and then bags and then belts.

These are all examples of the BLUE ARROW options in the diagram above. They chase the volume; seduced by the marginal sale. They convince themselves they are chasing an increase in basket size with no clear understanding of what it does to their offer and to their brand and to customer perceptions of their proposition.

Do you go to the Fish & Chips shop to buy hamburgers? Of course not. When the Fish & Chips shop does start selling hamburgers, it is Corner Café – an entirely different proposition.

Does a woman looking for those really special shoes (insert favourite band here) really want to wrestle through the aisles cluttered with kids and trolleys?

Too few retailers go for the RED ARROW option – because they would be going uphill. Only a rare few even hold their position.

The reason why great retailers are great is that they achieve consistency. Lowes is a great retailer for that very reason. And no wonder they are more than a 110 years old. Good brands like Sportsgirl, Reject Shop (please get rid of that annoying auto play video) and Country Road have owned their proposition for as long as I have known them. (The Reject Shop resisting the temptation to go online shows to me that they understand their business model and proposition well.)

This does not mean you cannot re-position or adapt, but changes and additions ONLY work when they fit the original proposition.

McDonalds introduced fresh options to their menu and added (real) coffee. McDonalds is about fast family food and the menu is modernised to reflect the tastes of their market, so that works.

Similarly there are newsagents who added gifts. If you are selling cards, the same customer is happy to buy a gift for the same person on the same occasion at the same place.

But if Dominos starts selling hamburgers, you can be sure to start selling your shares, because savvy consumers will perceive that as a cynical attempt to capture an additional sale.

In the long run, chasing that shiny, seductive incremental dollar at a lower margin is a counter-productive chimera that will destroy your business. It kills your brand; the goose that lays the golden eggs. (E.g. Toyota could not become Lexus, they had to create a new brand instead.)

Two strategies that you could consider instead are:

  1. A service company should ‘productise’, and product companies should create services. For instance, BMW did it with BMW on demand. Patagonia’s Common Threads Partnership is an example of how Patagonia facilitates (offers the service) the recycling of their own clothes. This is completely counter-intuitive, but it is exactly the right thing to do.
  2. Strengthen your proposition by purifying it and focussing it. If you sell Fish & Chips, sell fish and chips that would make Jamie Oliver proud. That is, add some organic fish cake or gluten free batter or whatever. Become a Fish & Chips shop worth visiting because the service and the offer together provide a unique and special experience. (I am not suggesting the shop becomes ‘swanky’ – just different and interesting and worth visiting.)
"Would you tell me, please, which way I ought to go from here?"
"That depends a good deal on where you want to get to," said the Cat.
"I don’t much care where--" said Alice.
"Then it doesn’t matter which way you go," said the Cat.
(From Alice's Adventures in Wonderland) 

Adding lollies on every counter is lazy retailing and a sure sign of a retailer drifting down the road to nowhere.

Have fun

Dennis

Read this: warts and all about Fifty Shades of Failure: A Personal Confession.

Ganador: Learning & Development for the 21st century retailer dealing with the 21st century consumer.

 

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