What do mass retail giants Target, Sony, Future Shop, Mexx, Smart Set and Jacob all have in common? Besides the fact they are all exiting Canada, they all sell pretty well the same crap at the same prices. Coincidence? Not at all.
This middle strata of retailers will not survive because they don’t have strong enough points of differentiation – this is why we are also seeing a retail cleansing in the US on a much larger scale. Some retailers think cheap goods and best price is what they need to succeed. The truth is, consumers only shop for best price when there are no other differentiating factors to attract them. If you’re old enough to remember Wacky Wheatley’s TV and Stereo, a local retail chain that sold on price and only price, you’ll remember how quickly they became extinct when the large electronics chains came to town with even better prices. Wacky Wheatley’s simply had nothing else to position their brand around. Sadly the same occurred with Mahone’s Stationery.
While 15% of consumers spend their entire life chasing the cheapest loaf of bread, 85% of consumers will pay more. For quality, for convenience, for a great retail experience, for selection, for the brands they trust, or for some combination of these. Walmart owns consumers’ share of mind for best price because they are tyrannical about taking cost out of their system. We see this clearly in both their labour and product procurement practices.
The biggest retailers aren’t always the smartest, they’re not always the trend setters and they certainly aren’t nimble and agile. If you try to beat them at the price game they will outgun you quickly and arrogantly. To stand out, don’t be afraid to be different – noticeable, memorable and ownable difference is the foundation of every great brand. Just look at Pete’s, Sportwheels, Duggers, Kept, The Trail Shop, Touch of Gold, Sweet Janes, Thornblooms, P’lovers, Westgate 31, All Dressed Up, Liquid Gold and Biscuit General Store. Every one of these retail brands is successful, many even coveted. And while consumers know they will receive great value, not one of these brands promise the best price. That is the power of a strong brand.
More important, every one of these businesses is a vital part of the culture of Halifax. If experiencing and supporting the culture that our local independent retailers add to our city isn’t enough to persuade you, remember that only a very small portion of every dollar spent with a multi-national corporation stays in the local economy. Contrast that to how well local business promotes cultural and economic prosperity in our community. Small business is the backbone of our economy and the retail cleansing taking place right now, which has way more to do with lack of differentiation than the economic climate, is opening the door for our own local retailers to grow and thrive.