Value

This is the third in our series based on Challenges of the
Future: The Rebirth of Small Independent Retail in America
, a 64 page white paper by Jack Stanyon, underwritten by the George H. Baum
Community Charitable Trust, the Illinois Retail Merchants Association, and the
National Retail Federation Foundation.

The second trend Stanyon identifies is Value Equation.  He says that "American consumers are becoming more interested in getting more value for their money and less interested in getting less for less." 

As we noted in an earlier post, Your Business Strategy "’Always the low price’ doesn’t move everyone.  Year-to-date through April, 2006, Mercedes Benz sales in the United States are up 15.9%."  Today’s consumer wants quality and  low price.   Since you normally can’t have both, her actual purchase will fall somewhere along the line between low price/low quality and high price/high quality. 

Our jobs as manufacturers and retailers is to come up with a mix of quality and price that equals the customer’s definition of "value."  A certain amount of value can be designed into the product, but the independent retailer has the flexibility to add services at the point of sale that increase value without adding substantially to the cost.

Whether it’s after-sale service, delivery, installation, or a play area in the store to occupy the kids while mom and dad shop, each dealer can provide added value to their particular customers. 

Stanyon points out that "the traditional power structure has permanently shifted from sellers to buyers….Buyers now hold the trump card."  Every customer is different.  Every customer’s definition of value is different.  The mass retailers can only market to the "average" customer.  The independent can market to every customer.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

<span>%d</span> bloggers like this: