Retail is customer development at its best, as the main objective for retailers is to satisfy the wants and needs of consumers better than the rest. Most retailers are selling primarily business-2-consumers (B2C), but there could be exceptions as some retailers are also suppliers to businesses (B2B) customers. Costco, the LCBO and beauty supply stores would be examples of stores that target both B2B & B2C. We will consider those examples as exceptions, more than the rule.
Serving the customer is not easy, particularly if you are a buyer and have to anticipate the wants and tastes of your customers. How do retailers know what their consumers want and how do retailers serve their customers with the best products? I recently ran a full 2-day entrepreneurship program for SHAD Waterloo Innovation Challenge students and we stopped by Quarry Marketing. A student asked "What happens when companies need help and there is nothing you can do for them?" Ken Whyte, Quarry’s President, had a chuckle at that question and said that there is always something to do and it usually begins with how a company sees their customer. Being an effective retailer needs to be able to do accurate trend analysis, have an economic understanding and be able to manage cash flow even with varying inventory levels. More than anything though, retailers need to be receptive to their customers.
Identifying, understanding, and listening to a target customer are key to any businesses strategy. This is even more important in a retail setting as it drives a company's marketing tactics, and it impacts how a company determines objectives that ultimately leads to a brand image in the customers mind (positioning). Drug stores, fast food chains and grocery stores use a undifferentiated marketing, or mass-marketing, as they want everyone and anyone into their stores. Golf stores, women retailers and comic book stores are much more concentrated (or niche) in their marketing efforts, as these customers are much more specific. As companies grow and scale, or the disruptive technology moves into the early and late majority segments from niche markets, they implement a multi-segment strategy that gives different messages aimed at different channels.
Once you have identified your customer, study them and talk to them to get all the information you can to make better buying decisions and determine the merchandise your customers will buy. What problems do they face? What do they value in a purchase? Is it convenience, quality, price? It is through listening to customers and giving them what they want that will give a company a sustainable competitive advantage.
So what will you do to talk to your customers? Interviews? Focus groups? Online? Or will you outsource it? Customers will tell you what you are doing well, where you are wasting time and what needs to be improved, the only thing you have to do is listen. In a competitive retail environment, it is listening better that will drive your brand image, sales and ultimately profits.
Light & love,