These days more than ever the competitive advantage pursued by many is to discount and commodities an industry. Prime examples of this include warehouse pharmacy stores, electrical retailing and hardware. As a result, the relentless pursuit of being the cheapest product and service provider has meant that the smaller service focused business is eventually forced out of business.
In many circumstances, the failure of these businesses has been due to the smaller business forgetting what made it successful in the first place- rather, trying to compete on price only, which was bound to be unsuccessful. Why? Because only businesses that will succeed by discounting will be those that have the lowest costs of operation, including buying power and who’s discounting generates enough volume to compensate for the margin given away.
Now, with the continued growth in online sales, the challenge of meeting this additional competition becomes even greater.
Businesses need to reinvent themselves in this brave new world.
But there is still hope. Studies like the J.T. Kearney survey “What Do 81% Of Shoppers Do in Stores That Only 19% Of Shoppers Do Online” indicated that a large percentage of customers (61%) still prefer to shop IN STORES for many reasons. That means that stores can survive and thrive by making some adjustments in their physical and psychological offerings. The key is for retailers to understand and focus on how and why their customers shop, and then retool and redeploy the store network accordingly.
Categories where customers especially favour the personal experience of in-store shopping include beauty and personal care products; footwear, apparel and accessories; consumer electronics, pharmacy and grocery products, home and furniture, home improvement, and office supplies.
In an article written by Gilon Miller of Upstream Commerce some suggestions are provided to transform themselves into more interesting and attractive places:
A place where consumers can learn more about products, try them out (think Apple) and hunt for hidden treasures. This, by the way, is part of the thrill of the hunt for product and pricing consumers say they want.
Provide an exciting in-store environment that engages shoppers, especially those who enjoy shopping and consider it a social experience. This can be literal entertainment — music, shows, happenings, etc. A more entertainment-focused venue builds longer-term engagement with the retail brand and the lifestyle it represents, says the Kearney Study.
That is, make the store the ideal place for personalised service-before, during, and after the sale. (Customer quote: “Stores that treat me like a person and not a number get my business.”)
A convenient, enjoyable transaction through
short checkout lines and service-oriented cashiers helps build brand loyalty. The point of sale also affords an opportunity to boost profits by up-selling or offering value-added services.
In summary, it is as important as ever to make your store the place where people WANT to shop. What are you doing now to innovate and transform your business- to ensure that it will survive and thrive in the brave new world of community pharmacy? A new world where price is not the only determining factor!
Some possible actions:
We have facilitated many Customer Advisory Boards, It’s something that customers can really value and provide engagement with the business. If you would like to know more about this process, feel free to contact us.
And finally, we wish you all a Merry Christmas and Prosperous New Year!