Tuesday, September 16, 2014

Two Strategies for Independent Retailers

I'm reading a fascinating book called The Man Who Wore Mismatched Socks about an indie brewing company in England fighting against the big corporate brewery who is trying to buy out and destroy all the competition.

Sound familiar?

In the book, the current head of the indie brewery says something profound...

"As you get bigger, you get more average." -Archibald Gack

How many times have we seen that the biggest company in our industry is really making quite average products? (Put your shoes back on. You don't need to count them all.)

Contrast that statement with this one said by a customer in an indie retailer.

"They must be the best because you see them everywhere." -unknown customer

Customer perception is since a product is everywhere it must be the best. The reality is more often than not, the products sold everywhere are really quite average. There is better stuff out there.

This begs two questions...

  1. Do you differentiate yourself by not carrying the most popular item in the category, thus flying in the face of customer perception?
  2. Do you carry the popular items to draw the traffic and then try to upsell to the better items?


Both strategies can work, but they each work with a different crowd.

Use the first if you only want to go after the innovators and early adopters, the people who only want the best. They are a small market, but they pay top dollar to be first or to have the best. You can make a lot of money off of them as long as you stay at the top of the market and as long as you continually advertise your cutting edge expertise.

Use the second if you want to go for the early and late majority. They are a much larger crowd, but they have more options to find what they want. And usually what they want has been commoditized so your margins on the everywhere items will be smaller and your profit will be based on your ability to upsell.

The markets are different for each of these strategies. Know which one you're in so that you'll know who you're trying to attract.

-Phil Wrzesinski
www.PhilsForum.com

PS You can trying being in both categories. Unfortunately, the message usually gets lost in advertising. When you advertise the popular items, you lose the innovator crowd. When you advertise the innovative items, you lose the popular crowd. That's why it is better to pick one and do it better than anyone else.

4 comments:

  1. Your postscript nails it down. This is just as meaningful in the kind of service work I do: I'm not the right choice for the average author — we work with clients who have a specific agenda and see their book as part of a whole, not an end in itself.

    And yet, I think our marketing has tried, inadvertently, to appeal to the early majority at the same time.

    Food for thought.

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    1. Joel, that last part is the toughest - figuring out how to market to your specific group. I believe it is because most people think of advertising as a means to reach the most people possible instead of a means to reach people in the best way possible.

      Munch on that idea.

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    2. True for most folks, no doubt. But now that I have your ear, I'm pondering what makes it hard for someone like me who knows full well you can't have it both ways.

      Are there some general rules or ideas I can look at in my own marketing to be sure I'm calling out to the right folks? I can see this in others' marketing, but my own is what it is and it's hard to see for myself.

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    3. You know this one, too, Joel. Speak the language of the audience. For innovators and early adopters, words and phrases like "cutting edge", and "game changer" are gonna garner more attention than "tried and true" or "category leader"

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