Why Play the Price Game?

 

I have found that so many times Specialty Retailers strategically take what seems to be the easy way out and focus all their attention on price. They allow themselves to be caught in the Wal-Mart trap and feel that every customer that comes in the door (or over the web, or over the phone) demands a low price.

This is simply not true.

One example of a company that doesn’t build on price is Hallmark. How many times have you visited a Hallmark store and expected “everyday low pricing”? Chances are you haven’t. You go to Hallmark for other reasons — selection, convenience or experience.

Hallmark has been quite successful with a multi-faceted retail strategy that doesn’t focus much time or energy on price. There are other specialty retailers that do a similar thing (and I’m not just talking about Starbucks). There are others, however, that are leaving valuable margin on the table by insisting that they must have low pricing in order to attract customers. Take a hint from Hallmark – you don’t need price if you focus on Experience and Selection.

Experience gives the customer something different from the ordinary and Selection gives them the ability to shop for what they want and see other items of interest within the same category. Barnes & Noble has successfully mixed comfort (overstuffed chairs, sitting areas, Starbucks coffee) with tremendous selection. Chicos has successfully mixed unique selling services with product selection and style. Hallmark has successfully given you the opportunity to shop in a store that’s full of selection and a well-lit, customer focused environment. Apple Stores are over the top in Experience and Selection.

Price is not necessarily a strong strategy for Specialty Retailers. Sure customers love a deal, but as a Specialty store you have so much more to give the customer than just a cheap price. Take a look at your strategy and see how you could create unique Experience and wide Selection in instead of price. You (and your customers) will be the beneficiaries.

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One Response to “Why Play the Price Game?”

  1. Scott Winter says:

    I was told unapologetically the other day by a carpet cleaner, “We aren’t the least expensive, but I guarantee you we will do a better job.” I believed him.
    He did a great job explaining their service and why their service was superior. Even better, he never once compared himself to any competition. He didn’t have to. Their quality and experience were obviously better and he didn’t once excuse the price for it.
    Too many times I am with a front-liner who can’t justify their pricing. That is why we all complain about it. If the people that work for these places don’t have full belief in the value of what they are offering, no wonder price is all we focus on.

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