The recession has pushed many retailers into a corner they hate: competing for the shopper’s dollar on low price alone. But if price becomes your only weapon, how do you keep competing? Where do you stop lowering prices? How do you differentiate yourself? How do you build the least bit of customer loyalty? What becomes of your brand?
Not that selling on price is new. It was the foundation of Sam Walton’s empire. “Everyday low prices” is a pretty unambiguous message.
Lee Peterson, creative director of WD Partners in Columbus, Ohio, feels strongly that if everyone’s selling on price, it ceases to be a weapon. Coupons and markdowns might get them in the door, but what will keep them coming back? Further coupons and markdowns? Or something arcane, like customer experience?
His answer, which he’ll share at next month’s IRDC in Toronto, is “quality.” Quality and low prices? Aren’t they the yin and yang of the business? Peterson’s session, “Getting Customers to Look Beyond Price,” will examine what messages are available to retailers once they’ve lowered their prices to the bottom-most rung without compromising the quality of their offering.
His examples will include Forever 21, our 2010 Retailer of the Year, who balances unbelievably good prices with what Peterson calls “the quality of fashion.” It’s not just low-cost rags you’re getting at Forever 21, it’s affordable trendiness and cachet. It’s getting people to ask, “Where did you get that?”
On Peterson’s panel will be Best Buy, who sells commodities by offering “the quality of knowledge.” Best Buy blue shirts will train and inform you, lead you to the product that best serves your needs and pocketbook and then even install and set it up at your home. Once you’re convinced the salesperson isn’t trying simply to upsell you, you’re hooked.
Also on his panel will be Frito-Lay, whose “science” of shopper marketing examines why some consumers respond better to price than others and how they have to adjust their assortments, their merchandising and their packaging accordingly.
Peterson himself has done a lot of work with Walmart, who has gone about as far as it can go with its price proposition. Lee will tell you how even Walmart is now emphasizing “the quality of the shopping environment,” with better-signed, more navigable, brighter, more pleasant stores with improved customer service.
Shoppers may seem like they’re responding to all the price cuts, but I think they’re bored with the same old same-old. They want excitement back in the shopping experience. If everybody’s offering the same markdowns and coupons, it’s the quality of the experience that will make you stand apart.
For more on IRDC and to register, visit www.irdconline.com.