A Retail Strategy For A New Recession
Have you ever noticed how every successful retailer has some kind of retail strategy hook that's very successful in getting the attention of the customer base they are aiming for? Trader Joe's happens to be a specialty chain. You don't go there for the best prices or for 625 brands of coffee. You go there for their high class selections. However, they know very well what kind of customer comes to their store. And they stack their shelves with specialty concoctions no one's ever heard of ?stuff like mango butter or chocolate pomegranate. They know that no one comes into their store thinking they need two packages of mango butter for the weekend. They do know that these things look special enough that they will stop people in their tracks. People usually pick one up because there's something very tempting and exclusive about it all.
We live in a time when stores have been reeling from the budget cuts most shoppers have been making. They抳e figured out that they need to surprise the customer if they are to get him to part with anything. You see something special like this, and you're temporarily flummoxed. Since you抮e at Trader Joe's, you don't really associate what you're seeing with some kind of expensive junk food. You really don't know if it could be worth the asking price since you have never seen such a thing anywhere else before. Perhaps it could be worth it, you tell yourself. And that's exactly what they're aiming for. That's their retail strategy.
People go to Costco, for what? They go there to buy large quantities of cheap stuff and save money. So there you are, picking up a few cans of cut-price tuna, when you find out that they are selling Burberry coats from Britain. At Costco! When else in your whole life are you going to be able to afford one of these, you ask yourself. You don't really know what Burberry's coats cost or whether they are worth it. You've just been taken by surprise and you spend on the thing.
Costco has really been going to town with this retail strategy. Among the towering stacks of cola, toilet paper and six-packs of shampoo, each store has a treasure section ?where you find decidedly high-quality stuff that you would ordinarily have to pay top dollar for in places like Nordstrom or Neiman Marcus. Mark Jacobs coats, Klipsch iPhone docks, and expensive Nike shoes are yours at bargain prices.
Walmart actually tried to go the opposite route. They believed that in the recession, people wanted the basics at the lowest possible prices and nothing else. As soon as they saw that they were losing out to the competition though, they tried to correct course and follow Costco's lead.
The thing that makes Costco's treasures particularly irresistible to people is that they only put them out for a limited period of time. If you miss out this week, you'll never get it ever again. People rush over to buy things this way. How could they resist?
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