These days
more than ever the competitive advantage pursued by many is to discount and
commoditize an industry. Prime examples of this include warehouse pharmacy
stores, electrical retailing and hardware. As a result, the relentless pursuit
of being the cheapest product and service provider has meant that the smaller,
service focused business is eventually forced out of business.
In many
circumstances, the failure of these businesses has been due to the smaller
business forgetting what made it successful in the first place – rather, trying
to compete on price only, which was bound to be unsuccessful. Why? Because only
businesses that will succeed by discounting will be those that have the lowest
costs of operation, including buying power and whose discounting generates
enough volume to compensate for the margin given away.
Now, with the
continued growth in on line sales, the challenge of meeting this additional
competition becomes even greater.
Businesses
need to reinvent themselves in this brave new world.
But there is
still hope. Studies like the J.T. Kearney survey “What Do
81% Of Shoppers Do in Stores That Only 19% Of Shoppers Do Online” indicated that a large percentage of customers (61%) still prefer to
shop IN STORES for many reasons. That means that stores can survive and thrive
by making some adjustments in their physical and psychological offerings. The
key is for retailers to understand and focus on how and why their customers
shop, and then retool and redeploy the store network accordingly.
Categories
where customers especially favor the personal experience of in-store shopping
include beauty and personal care products; footwear, apparel and accessories;
consumer electronics, pharmacy and grocery products, home and furniture, home
improvement, and office supplies.
In an article
written by Gilon Miller of Upstream Commerce some suggestions are provided to transform
themselves into more interesting and attractive places:
1) Make the store a place of DISCOVERY. A place where consumers can learn more about products, try them out
(think Apple) and hunt for (or happen upon) hidden treasures. This, by the way,
is part of the thrill of the hunt for product and pricing consumers say they
want.
2) Make the store a place of ENTERTAINMENT. Provide an exciting in-store environment that engages shoppers,
especially those who enjoy shopping and consider it a social experience. This
can be literal entertainment -- music, shows, happenings, etc. A more
entertainment-focused venue builds longer-term engagement with the retail brand
and the lifestyle it represents, says the Kearney Study.
3) Make the store a place of great RELATIONSHIP. That is, make the store the ideal place for personalized
service—before, during, and after the sale. (Customer quote: "Stores
that treat me like a person and not a number get my business.")
4) Make the TRANSACTION the key. A convenient, enjoyable transaction through
short checkout lines and service-oriented cashiers helps build brand loyalty. The point of sale also affords an opportunity to boost profits by upselling or offering value-added services.
short checkout lines and service-oriented cashiers helps build brand loyalty. The point of sale also affords an opportunity to boost profits by upselling or offering value-added services.
In summary, it is as important as ever to make your
store the place where people WANT to shop. What are you doing now to innovate
and transform your business – to ensure that it will survive and thrive in the
brave new world of community pharmacy? A new world where price is not the only
determining factor!
Some possible actions:
Some possible actions:
·
Brainstorm
each of the four points above with your team
·
Ask your
customers (a Client Advisory Board may be a great start) – what are you doing
now that customers value and therefore you need to keep doing? What could you
be doing to make their experience better?
·
Look at other
industries
·
Do something!
We have facilitated many Customer Advisory Boards,
It’s something that customers can really value and provide engagement with the
business. If you would like to know more about this process, feel free to
contact us.
And finally, we wish you all a Merry Christmas and
happy and prosperous new year!
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