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  • The Battle For Shopper Share

    Prior to writing my book, Predatory Marketing, I studied the critical issues that business leaders stressed they needed to know.

    That research on 1,000 business leaders revealed they have six really big concerns. This is the second of that series. Their first concern was, "How do I avoid making the wrong decision?" Their second concern is, "Why don't more people buy my products/shop my store?"

    Do you have two days?

    And that would not be enough time to fully answer this nagging question that frustrates business executives. But, here's how our research says you need to focus your decision-making to conquer this age old problem.

    Before there can be market share, shoppers must exist. Our research shows the "time-short" American visits fewer stores today than even just 3-4 years ago. Today, Americans visit .5 fewer stores to buy home furnishings, electronics and major appliances. That shopper who visited 2-3 stores in 1990 is today only going to 1.8 stores. As you can see, in 1990 three stores had a shot at potential buyers, while today only two stores are that lucky.

    During 1988-1989, our research showed this trend developing.

    That is why we coined the phrase, "Be First, Be Right or Be Dead!" As shoppers reduce their shopping time, the battle for shopper share will become the key determinant for judging survival in America.

    And shopper share is not only restricted to retailers because manufacturers will need to determine the right channel or distribution strategy, as well as the ideal location within the store to survive. There are only so many end-caps or bargain table locations so store placement will become the next real battleground for manufacturers.

    According to our findings, there are five core reasons why products don't sell or stores do not get shopped.

    In order of importance, the first and most important reason is lack of awareness.

    The consumer didn't know the product or the store existed. That's hard to believe, but with 83% of consumers saying all furniture stores look the same and 74% of consumers saying stores look the same in other retail sectors, these numbers reflect how retail stores have created a "sea of sameness". With this dulling of the consumers' store awareness, stores must have a bold marketing strategy to get on the consumer's radar screen. This bold marketing strategy must take form in either an unique advertising position, outstanding merchandising strategy and/or dynamic store exterior. The absence of these three means a store is falling into that "sea of sameness" and never gets noticed.

    The second core reason why more don't buy a product or shop a particular store is no compelling reason.

    When one walks into a store to make a purchase, why should they buy one product and not another? In today's fast-paced, competitive environment, consumers need to know. They want a reason to buy or shop that makes sense to them. Marketing executives express belief in their marketing strategies because they helped to create them, but consumers rate many of these strategies as "failures to communicate".

    The inability to communicate to the targeted customer results in consumers never understanding why they need a particular product. Without this understanding, there is no reason to buy or to shop a particular store.

    The third core reason is no identity to force a positive action.

    Too many stores have no product identity, which means they never reach a high enough level on the consumer's shopping list to be the first or second store shopped. Sears has a product identity in laundry, which brings them half of American shoppers who buy a washer/dryer.

    Those retail stores which are "merchandise blobs" stand for nothing except another store selling a product category.

    Manufacturers must also be aware of this problem, because if they select the wrong product identity like Zenith which dominated color console TVs at a time when the category was shrinking, your product identity must change as the market dictates.

    The fourth core reason is lack of a unique selling proposition (service element) to build repeat purchases.

    Unless you have the largest advertising cannon, you better offer something unique in order to cut through the advertising clutter. The more dynamic the selling proposition, the more effective your advertising.

    In the world of retailing, something unique today can be accepted practice in one year and boring in two years. The appliance and electronics superstore was unique, now it's expected.

    Retailers who offered a quick delivery program in major appliances or in mattress/box springs have to do more today to get the same impact. Having an impressive TV wall was once exciting, now it's called "a nice presentation".

    Retailers are re-discovering that consumers who want "price" want "lower prices" next time. The lack of something extra has produced a mass of shoppers who demand lower prices making many retail categories unprofitable.

    Without a unique service, the customer is unable to build a sense of loyalty to that retailer. In the 1950's when 66% of America was loyal, advertising had to drive 1 in 3 shoppers. Today, advertising is driving 7 in 8 shoppers since only 12% of Americans are loyal. Advertising expenses have risen largely due to the fact that it must pull a much bigger wagon.

    Offering a unique selling proposition on a unique service costs more, but it's money well spent.

    The final reason is an awareness level exists, but nothing more.

    This is the best example of why the independent "ma and pa" retailer is vanishing in America.

    Consumers who shop at a superstore or a new retail format drive by many local retailers. When we ask them, why did they shop here but drive by this locally-owned store, the answer is: "I have heard of them, but I haven't been there for years," or "I have heard of them, but I didn't realize they were still open".

    These responses reveal that some awareness exists, and maybe prior shopping experience, but these stores have been lost in the shuffle and survive only as long as the owner is willing to devote his whole life to the store.

    Hopefully, when reading this analysis, you have noticed that many of these five points are inter-related. Some could argue these five points are actually versions of the same problem: A missed marketing message to the desired customer.

    The lessons to be learned are: What does it take to have a merchandising offer or product area that is truly superior to your competitors in the marketplace? And, what unique service will you offer that gives the customer a reason to make you first on their shopping list?

    By not fulfilling these two vital functions of either a retail store or a manufacturer, your ability to be profitable long-term is doubtful.

    This will be a year when more companies will face extinction because they have this attitude: "Things will turn around, they always have".

    With a shrinking pie due to consumers trying to save more, it may be a long time before "it turns around".