by John Stanley

It takes time to become a recognized leader in retailing, but the slip
down the ladder can happen rapidly. This really came home to me when Tiger
Woods came to play golf in my home town of Perth this week. After 623
weeks as the best golfer in the world, he slipped rapidly to 56th in
the world.

The same can happen to retailers, often for different reasons, but the
lessons can be just as hard to learn.

A recent article by Patrick Stafford in the November 3rd edition of
Smartcompany.com looked at a similar situation between the two Australian
supermarkets and why Woolworths had let Coles back into the grocery game
and start gaining market share.

There are lessons all around us of why companies and brands slip from
number one and the lessons are worth relooking at…

Lesson One: Keep to your Values and Your Brand Strategy

The last few years have been difficult for all businesses. Retailers have
been especially hurt during the Global Financial Crisis and many are finding it a slow journey
of recovery. The easy way for your competitor to gain market share is to
announce to the consumer they have a cheaper offer than yours. Price is
and has always been an issue in the consumers mind, but you cannot let it
dominate your marketing strategy. The fashion industry around the world
has seen numerous brands damaged by the 70 percent off sale strategy that has
occurred over the last three to four years. It works for some time and it
will work for some retailers, but over-focusing on a price strategy at
the expense of the values within the brand can dilute the brand in the
customer’s mind.

Retailers need to look at what the perception of the brand
is in the customer’s eyes and then start building on that perception. Only
one retailer can “own” the cheapest price perception, other retailers have
to find their Unique Selling Proposition.

Lesson Two: Keep to the Knitting

When retailing gets more difficult, there is a tendency to look at what can
you add to the range to encourage people to buy your products. I always
remember visiting a supermarket that was in financial trouble. The owner,
being aware of the problem, went to the Middle East and introduced cheap
clothing and table lamps into the store, to boost sales. The customer was
expecting to come in to the store to purchase groceries, not clothes and
table lamps. The owner had missed one of the important lessons. When
retailing gets tough, you keep to “knitting” and become the destination for
what you do in the customer’s eyes. It can be difficult, but the consumer
will look to the perceived retail expert, that includes having a wide and
deep range in your core retail activity zone and not diversifying so you
look like a “me to” retailer.

Lesson Three: Do Not React by Copying

Yes, you should always keep an eye on the competition, but you should not
copy the competition. The competition will be flattered if you do copy
them, but it will not win you many new customers in the long run. Copying
just flatters the competition and, in the customers eyes says, you are a “me
to” retailer rather than a retailer who is out there creating your own
experiences for the consumer.

Lesson Four: Be a Proactive Leader

You need a strategy you can own that differentiates you from the
competition. This means developing your own ideas that are unique to you.
This may mean you need to look at retailers in other retail sectors that
are doing something different and translating their ideas to your own
retail sector. It is rare to find new and novel ideas by just looking within
your own retail sector.

Lesson Five: Identify Winners in Store and Promote Them

What are the winners in your store and what are the losers”
Shed as many of the losers that you can while still maintaining your
integrity in the eyes of the consumer while promoting the winners. I work with many retailers that do not even know the winning and
losing products in store. Get to know them and develop them. Retail leaders know
the winners and know how to keep developing them.

Ensure you maintain your leadership and keep the competition guessing a what
you are going to do next.

John Stanley provides conference presentations, workshops and consultancy to the retail industry in 30 countries. He can be contacted at john@johnstanley.com.au