All through the 80's, 90's and even the early 00's specialty independent retailers had the misfortune of competing with the big box stores like Home Depot, Toys R Us, Michael's, etc. These Category Killers and the discounters like Wal-Mart, Target and K-Mart forced a dramatic shift in the marketplace.
No longer could we afford to carry much of the product that these guys carried. They used their size to bully vendors into better pricing, and used their centralized administrative functions to keep overhead down so that they could work on lower margins and sell that stuff much cheaper than we could.
We could still compete, though, because there was enough product those big boxes didn't carry. And they never could match our knowledge. Yes, in many industries we went from being big stores like them to smaller boutiques and smaller stores. But there was still plenty to be done by playing the differentiation card.
Today we are facing another dramatic shift in the marketplace. The Internet.
The Internet has taken away the differentiation card. Almost everything you sell can now be found and purchased online. Usually at a lower price than what you are offering. And with a convenience that you cannot touch - being able to shop at midnight in your pajamas in the comfort of your home with all of the information, product data, specs, and reviews just a mouse click away.
That's a pretty big card.
Sure there are some hold-outs. There are some wonderful companies like Trek Bikes and Stihl Yard Equipment that are supporting the independents fully 100%. But those are now the exceptions, not the rule.
The old model of product differentiation is dead. It isn't coming back any time soon.
The new reality is that we have fewer and fewer cards left in our deck to play. We still have the desire of the customer being able to touch and feel the product before she buys. We have the immediate, take-it-with-you convenience that Amazon is trying to copy with their same-day delivery model (that I believe will bankrupt them, but that's a discussion for another day).
And we still have Customer Delight.
That's the best card in our deck. That's the one card that will be difficult for our competitors to be able to take away. We have the ability to make a connection with her that resonates deep in her heart and makes her want to come back and bring her friends, too.
Instead of going blue in the face complaining about Amazon, Gilt, Zullily or any other online seller... Instead of complaining about which vendor is now selling the mass... Instead of complaining about the government and how its actions or inactions are hurting you... spend your energies bending over backwards to delight your customers. Spend your time anticipating her needs, meeting those needs, then exceeding them beyond her wildest dreams. Win her heart, you win the hand. The one that reaches for her wallet.
PS To win her heart, you have to surprise and delight her. To surprise and delight her, you have to know what she is expecting and then exceed that. The easiest way to do this is to quit thinking like a retailer and think like a customer. What do you want when you shop? How do you want to be treated? What do you expect when you enter a store to make a purchase? That is the bar. Now go over it!