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Monday, June 22, 2009

Retailers Shift Strategy, Sync With Seasons & Other Novel Approaches

The front page of the 6/20/09 New York Times featured a fascinating article titled In Recession, Strategy Shifts for Big Retailers. According to the author, Stephanie Rosenbloom, the country's largest retailers "are seizing the moment to reinvent their business strategies."

More specifically, "high end stores... will offer more midpriced merchandise. Many chains ... will carry less inventory and fewer brands. The likes of Sears and J.C. Penney will put self-service computers in stores so customers can browse collections or buy out-of-stock items. And retailers of all stripes will offer more exclusive merchandise and more attentive customer service... One of the biggest changes... is greater personalization and regionalization of merchandise."

On one hand, I consider this exciting news. On the other, I'm amazed that so many retailers have been asleep at the switch and not paying closer attention to their customers - especially when other non-US retailers [e.g., Zara and H&M] and US non-apparel retailers like Trader Joe's have.

Zara uses hand-held devices to immediately communicate product feedback. Macy's intends to send its merchandisers and other planners into stores each week to learn from the sales staff, who will "keep logs at the sales registers", and fine tune product offerings to meet the specific needs of a locality. Getting Ahead By Being Local makes sense, especially in an age where everything looks the same.

The article says that "at high-end stores, ... consumers will still be able to buy chic brand names, but at a wider range of prices." Furthermore, brands will be streamlined. "Consumers are 'time-starved' and looking for simplification in the entire shopping experience." I've walked away from purchase decisions where the choices were too many. It's exhausting to have to sift through so many choices, and I hate the negative emotions.

I'm particularly intrigued to read that "seasonal transitions for apparel will probably have shorter lead times." Makes sense to me. Retailers have been jumping the gun on too many seasonal fronts [see The Grinch Who Stole November's Christmas and Elmo Saves Christmas... But, Not From Retailers]. It's time to get back in sync as Retailers keeping clothes in sync with seasons by Anne D'Innocenzio explains. She brings up an interesting point in her article: that the change in strategy leads to a change in product quality in favor of innovations that enhance wear and durability. I'm hoping that means we can say goodbye to disposable products and instead focus on acquiring better quality products that last longer. That's sustainable.

Back to the NYT article. It brings up more designer - retailer collaborations for exclusive products, more blurring between on- and off-line store experiences with more opportunities to do research [including competitive research] in-store, and cellphone shopping [something already well established in Japan].

It also addresses an increased focus on customer service.

That's right, a lot more effort on improving the customer's retail buying experience and having knowledgeable, customer-focused sales staff on hand.

Music to my ears!

Now, although the article focuses on apparel [with a few Sears and Home Depot comments], it in every way applies to retail stores across the board including flooring.

1. Listen to your customer. Observe your customer. Pay attention to the trends that are relevant to your market place. What products styles, attributes and colors matter to your customer base? What problems can you help them solve?

2. Simplify your product offerings. Make sure they make sense to your customers. Can customers readily determine the value each offers?

3. Are your on- and off-line experiences fully integrated? Can you help customers do research within your store? Do you offer them all of the information they need to make the decision that matters to them both in-store and on-line?

4. Is your retail buying experience absolutely top-notch and memorable? From beginning to post-installation? Do you create long-lasting relationships?

Retailing is in for interesting change as strategies shift and we re-adjust to truly focusing on how to add value to our customers' lives.

Do you agree?

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