Why retail businesses fail Part 3: Do you make this mistake in retail?

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Lack of Understanding of the Target Market

I visited Harrods for research purposes for my books on store design and visual display of merchandise. Harrods, for anyone reading this white paper that may not know it, is the mecca of the retail trade. Royalties, celebrities and "who-is-who" from around the world come to London to shop at Harrods.

You can now imagine my anticipation when I visited Harrods. In my mind everything in Harrods was made of gold. I was disappointed when I noticed that a toy bus that I had bought for my son from ASDA, was also sold at Harrods. It was exactly the same toy bus, exactly in the same package as the one sold in ASDA.

A question has come to my mind, why is it exactly the same bus, probably made exactly in the same factory in China? sold to Harrods for twice the price for which it is sold in ASDA?

The answer is decidedly simple – ASDA sells a "toy bus", however, Harrods sells a "smart toy bus". There is a difference. That's marketing 101: people buy emotionally but logically justify their decision.

Shoppers at Harrods do not shop there to buy Harrods products; they shop at Harrods to buy "elegance and class". Harrods sells them the class even though it is "Made in China".

How does Harrods tear it off? They achieve this through the combination of a stylish store design and attractive visual merchandising displays. When you pass from one department to another in Harrods, it's like going from one store to the other. Their ability to use their store design to create the illusion of differentiation is one of the keys to Harrods success. Harrods understands their customers; they know what their customers want for them to design their store and exhibit their products to satisfy the desire of their customers.

Marcus Buckingham, in his book "The first thing you need to know," said when he interviewed Sir Terry Leahy, who turned Tesco into a global brand, he asked him what was the key to successful transformation from Tesco. Sir Terry Leahy replied that he was asking and answering the simple question: Who are we serving?

When Tesco determined who they were going to serve, they changed their store layout and products to serve their target market. As a result of this change; Tesco increased the number of cash desks, which reduced customers' queuing time at the checkouts, which resulted in a dramatic increase in Tesco attendance.

Wal-Mart serves the person who lives: paycheck

Body Shop serves the ethical consumer

Waitrose and Holland & Barrett serve the consumer who wants to live longer.

Ann Summers took goods that were hidden in secret adult shops; made them fashionable and brought them to High Street. They made a taboo subject acceptable to the mainstream.

If I had to take my other important clothes at John Lewis, she would probably phone my mother to inform her that I had a nervous breakdown. She would not want to be caught dead in John Lewis's outfit. She describes John Lewis's clothing department as a Bridget Jones museum where they stock a collection of Bridget Jones costumes.

However, John Lewis continues to increase his profit year after year because John Lewis understands his target market. Someone like my other significant might not want to be caught up in John Lewis's outfit, but there are people in the UK who love Bridget Jones's memories, these people are John Lewis's target market , so John Lewis takes care of them. 19659002] The most successful retailers understand their target market and show their understanding of their target market through the design of their stores and visual displays.

Retailers who go bankrupt do not understand this basic concept. struggling because they still use the business model from the 1960s to the Amazonian era. Borders failed because she did not properly develop her internet business and she invested heavily in compact discs when the music became digital. WH Smith earns only money through sales at airports and train stations. The rest of his stores are in trouble. Waterstone is also on a downward trend. Sales are down and customer traffic is down sharply.

Why are bookstores under threat? Amazon! They will all scream. Of course Amazon is the cause because Amazon better understands their market than them. As it seems that Amazon will not be going anytime soon, will all bookstores close?

WH Smith and Waterstone will they close? Or will they take up the challenge and modernize their stores? Instead of complaining about Amazon, they have to redefine their target market and redesign their stores to attract their target customers.

On Christmas Eve, I had not done my grocery shopping and was afraid to enter a supermarket, knowing how packaged they were going to be. But as I drove past my local Lidl store, I noticed that it was empty. I rushed and finished my shopping. Coming home, a question has come to my mind. why, even today, most supermarkets are packed to capacity, Lidl was it empty?

The answer, in my opinion, is that Lidl does not have a target market. One of their biggest sins was to make the decision to force customers to pay for carrying bags. Marks & Spencer can afford to do this because they appeal to a different category of customers.

At Tesco and ASDA, environmentally conscious customers have the opportunity to pay for their purchases. However, those who do not want to pay for the transport bags also have the opportunity to get them for free.

This is because Tesco and ASDA understand their customers. On the other hand, Lidl's senior management felt that having implemented a similar strategy in Europe, it could introduce the same thing in the UK. If the British do not like it, difficult! Well, the British show their discontent with their feet.

I have tried to demonstrate with the examples above, that success or failure in detail is the result of the strategies that every retailer adopts. Retailers who understand and target their target market will continue to move from success to greater success, while those who roll the dice and expect customers to show up are the ones who will struggle or enter. the

administration being the one that breaks this type of news to the retail industry, I guess someone will have to do it: the internet is not going to go away. This means that retailers are not only competing with each other, they are also competing with the factories manufacturers in China whose name they have never heard. Buyers now order directly from warehouses and distributors, for example an individual can connect to eBay and order a pallet of goods.

Here's the good news: Most people still prefer to shop in physical stores. The question is how does an individual retailer ensure that consumers are attracted to their store? This can be done by adopting the concept of the "Blue Ocean" strategy.

Adopting the "Blue Ocean" strategy is the only hello for retailers of books, DVDs, music and furniture. What is the "Blue Ocean" strategy? The "Blue Ocean" strategy is "the simultaneous pursuit of differentiation and low cost" which leads to the creation of a new market space making competition irrelevant.

The concept of "Blue Ocean" is practiced troubled companies pursue what is called the "Red Ocean" strategy. The "Red Ocean" strategy fights to compete on the existing market

The "Red Ocean" strategy is adopted by many retailers of books, DVDs, music and furniture. They are trying to compete with the internet and this is just not possible. A brick and mortar store can never go head-to-head with the Internet and win. It can never be cheaper than the Internet.

However, what they must do to attract customer traffic to their stores has become innovative and creative. For example, a bookstore could organize periodic book signings; Of course, the authors want to sell their books, which is a win-win situation for all concerned.

For book signing to be a successful marketing platform for bookstores, it would be desirable for retailers to work together.

Promoting book signing could take many forms such as the effective use of social media sites, local press and captivating signage inside and out. Outside the shop.

Another idea might be to organize book clubs for different kinds of books, which would attract a variety of customers to the store, these book clubs would also need to promote in the same way as for the promotion of book signatures. The trick is to be innovative.

Richer Sounds is a classic case of a retailer who has adopted the "Blue Ocean" strategy. They understand that people always prefer to interact with other people. While other electronics retailers focus on the price, they focus on excellent customer service and knowledge of the staff. Their "Blue Ocean" is excellent customer service and superior product knowledge.

For retailers of books, DVDs or music, they need a "Blue Ocean" strategy that goes beyond price reduction. They need soul. They need to understand the perception of their target market.

• What do they want?

• What are their hopes and fears?

• What is their perception?

I can order an Amazon book or DVD and receive it the next day. I can download music instantly from iTunes. There are millions of me in the world. What kind of Blue Ocean strategy can WH Smith or HMV get me out of my laptop? It takes me half an hour to get downtown, pay for parking, spend half an hour at WH Smith or the HMV and another half an hour to get home

Smith or HMV do it for that it is worth it?

Let me give them a hint, I could order my shopping online, however, I chose to go to the supermarket. What is the difference? This is for retailers of books, DVDs, electronics and furniture to discover. They probably need to visit Starbucks, he might just hold the keys to unleash their creativity.

The only point of difference that most retailers know is price reduction. Price reduction is not a business strategy, it is a wish of death.

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Source by Romeo Cliff Richards

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