Retail has always been a tough category. But thanks to technology and choice, it's getting even tougher. The barriers to entry are at an all time high, while the ability to differentiate is at an all time low. Think about it – when is the last time you didn't hear a grocery retailer talk about fresh or price?!
It has been interesting watching Walmart shift away and back to their EDLP focus. Today's news demonstrates how they are pushing EDLP even further. For example, shoppers in select cities can take a photo of their grocery receipt, upload it, and get an email back showing the money WM would have saved them. This is a great marriage of digital and physical that has the potential to shift trip behavior.
Shoppers expect price competitiveness from grocery stores. Tests like WM's continue to train shoppers that researching pricing helps them get the lowest price. Amazon's price check app is another example of empowering shoppers to find the right price. All of this eliminates price as a competitive advantage for 99.999% of all retailers. In today's price sensitive market, price and value are tablestakes for traffic.
A retailer's biggest challenge is to narrow their focus instead of trying to be everything to everyone. This is especially true when it comes to positioning and targeting shoppers. So where should retailers focus their brand? While each retailer needs to consider their competitive and shopper realities, here are some quick thoughts based on our work in retail activation:
1. Redefine convenience beyond the physical: While proximity matters when determining where to shop, it is not the determining factor. Understanding your shopper behavior and defining convenience to attract that shopper is a critical step in relevance.
2. Focus on the experience: Shopper engagement, when done right, should result in shopper empathy. And vice versa. Understanding how your shopper experiences your brand across all channels and tactics is essential to understanding what your brand means to them.
3. Make service work: Every retail outlet has employees. Yet very few retailer make service work for them. Employees and their service are a tangible way your brand comes to life. Make it work for you.
4. Make location matter: It is amazing how many retailers don't integrate their real estate and marketing divisions. Ultimately, location of your store says as much about your store as what you sell inside.
It takes courage to define your brand by differentiating yourself. Yet in today's market, you must differentiate or die.