22 Oct Three Essential Ingredients for a Strong Retail Marketing Strategy
No one wants to own a mediocre brand, but few businesses take the steps necessary to become a dominant brand. Brands that donāt actively work to differentiate are generally defined and controlled by their competitors. In a cluttered marketplace of indistinguishable brands, developing a strong position in the heart of the customer is extremely challenging.
In the world of retail brands, you either grow or dieāthereās no in-between. In most cases, the winner of this game for the customerās heart takes all, leaving the rest of the competition struggling for minor market share.
In order to develop a strong position in the marketplace, Ā brands have to understand three key ingredients for developing a strong retail marketing strategy: relevance, growth potential, and category leadership.
Retail Marketing Strategy #1: Be Relevant To Your Customers
Key Question: How important is your brandās promise to its customer?
Everything (including your advertising) must create value for your customer. Anything that does not create value weakens your relevance in the customerās life. When the customer no longer finds value in your promise, the relevance dies and the customer does business with your competitor.
This is what happened to K-Mart as Walmart became more relevant by having what the customer wanted (deep inventory), when the customer wanted it (open 24-hours a day), at the price the customer wanted to pay (low price always, always). Combining these merchant-champion qualities with āreal peopleā advertising of their associates and customers, and the resulting relevance factor was beyond anyone in their category.
Even today it is hard for other retailers to be as relevant in the customerās life as Walmart is for the general public. This is simple to see when you consider the fact that 35 million people choose to shop at Walmart every day. Many studies showed that customers drove right past K-Mart in order to get to Walmart. Ā The power of a relevant brand!
Retail Marketing Strategy #2: Capitalize on Growth Potential
Key Question: How does your brand help customers grow?
A powerful brand helps its customers achieve growth. As people are always evolving, they tend to favor those who help them along their lifeās journey to grow and gain what they want. This is a crucial point: your brand has to give your customers a potential to grow from the interaction with the brand in a personal way. If the individual does not derive any growth from the interaction with the brand, the business enterprise failed at all levelsāthey didnāt have the foresight to think through the problem all the way to the customer.
It is important to remember that each of your customers is attracted to your brand for their own reason, not yours. Most marketing managers start by looking at their business rather than the customer who is growing from this interaction.
The successful retailer Build-a-Bear is a clear example of how to offer growth potential to each customer. By designing the experience of building a bear as a workshop, each customer is able to create his or her own unique teddy bear, giving it a name, a birth certificate and registering it to the creatorās name. Customers describe the experience as āpersonally enriching,ā as they are allowed to create their new best friend. Ā Build-A-Bear earns twice the national average per square foot of mall retail space. It pays to help your customer grow.
Retail Marketing Strategy #3: Go For Category Leadership
Key Question: How dominant is your brandās position in its given category?
Southwest Airlines summarizes this idea best when their former leader, Herb Kelleher, said, āI will tell your our strategic plan, its called doing something.ā As crazy as this sounds, most companies donāt do anything to establish category leadership.
Most brands, by default, choose the tried-and-true path and take their place in the rankings by simply doing what they have always done. In order to develop brand leadership, you have to own your category. There is no way around it; there canāt be anyone else that serve your specific customers better than you do. Great brands always stand alone.
Leading the pack is not easy, and itās not for every business. Creating market dominance means constant attention to the customer by taking meaningful action. Great brands are in a constant conversation with their customers, associates, and partners. Ā At each point in the chain they strive to add value and stand apart from their competitors with a strong retail marketing strategy.