How to Execute Retail Strategy:

strategy

What do you focus on when you shop? Do you prefer the latest and greatest innovations with the biggest price tags? Or do you prefer to purchase the lowest priced products?  For most consumers, it’s likely dependent on the object and a combination of the two.  But what should you really base your decision on, price or performance?

While consumers have this dilemma daily in stores, it directly relates to retail professionals.  For many buyers, the most stressful time of the year is determining their “shelf” or product assortment.   With numerous manufacturers and products to choose from, they must pick the item that their customers will hopefully purchase.  And of course, every potential comes with a pitch that points out how their product is the best in class AND at the best price.

But whom should the retailer pick?  With multiple brands competing for limited shelf space, the options seem limitless and the strategy developed over the past six months seems impossible.  How can a retail professional properly EXECUTE their strategy?

The solution comes proper assortment based on performance.  Proper assortment, or diversifying product space with varying price points, gets you halfway there.  The classic solution is carrying an Opening Price Point (OPP), Middle Price Point (MPP), and High Price Point (HPP).  While proper assortment sounds directly related to price (and it often is), the second half of the equation is HOW the strategy is executed, and often where retailers miss the boat.  Product performance must be identified and verified.  Only basing on price leaves gaps for weak, over-priced items to disappoint customers and tarnish a store and brand reputation.  Customers must assume that retailers properly execute strategy and therefore assume the following about their shopping experience:

  • HPP – Best price & performance
  • MPP – Mid price & performance
  • OPP – Lowest price & performance

Sounds simple, right?  Unfortunately, with many retailers, we have found that performance does not always correlate with price.  Often, a poorly performing product will come with a high price tag.  Occasionally, a less expensive product performs better than expected.  Consumers are more educated than ever before, and the best will rise to the top through independent reviews, word of mouth, and many other sources of information.  In today’s educated environment, retailers HAVE to analyze the performance of potential products BEFORE they put them on their shelves.  It’s like test-driving a car.  You wouldn’t buy it before driving it, right?  Those who don’t properly execute strategy through product performance testing risk disappointing their customers with poor products, losing business to competing retailers as consumers find brands they can trust.

If you are a consumer that has identified a trusted brand, stick with it and share it with your friends.  It is likely that this retailer has the steps in place to ensure proper assortment based on performance, providing you a great experience.

If you are a retailer that is not conducting product performance testing BEFORE selection, consider embracing the future.  Spending a little up front can reap tremendous benefits down the road.

Have you ever paid too much for a poor product or gotten a great product for a low price?  Share your experiences by commenting below!

Don’t miss a post!  Stay connected with 4th Strand by subscribing to this blog and connecting via LinkedIn, Facebook, and Twitter..

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>