Get a Bigger Slice
So many businesses are trying so hard to be all things to all people these days. Do we just need to decide who we’re trying to serve? What would happen if we could confidently, and happily focus on one market segment? Could we be happy there if we did? Would our customers be happy if we did?This is not a small business problem. Large businesses do the same thing. The pull of Wall Street on growth and profit causes them to take their eye off their ball leading them to make decisions they shouldn’t have made. Take Walmart for example. Several years ago when our economy was booming they got greedy and went after the affluent customer they thought they wanted. Turns out they already had them and all they had to do was be satisfied if they came to buy their toilet paper, paper towels, milk, and eggs. and whatever they happened to graze upon along the way. But no, they had to go change the whole store around and lose the favor of their core customer – the masses that earn less than $70k household income per year. It seemed like such a good idea, and to some degree it was. Did they just take it too far? Time will tell as they backtrack stuffing their stores with lots more cheap stuff, a dizzying store environment and focus on everyday low prices just like their core customer found in the rapidly expanding dollar store format.
In short, Walmart realized that its core customers – those Americans with household incomes between $30,000 and $70,000 a year – liked the feel of stores so full of attractively priced merchandise that it could barely be contained on the shelves. A couple of years ago, under Project Impact, Walmart had stripped selection and focused on a clean-store look in an effort to attract upscale shoppers. But that group proved a fickle lot.
So where did the fickle lot of higher income folks go? Did their spending play out with the economy as they made do with fewer luxuries? Are they attracted back where they shopped previously as they escape frugal fatigue? Are upscale businesses ready for them to come back, or are they out chasing after a slice of great big Walmart pie with low prices?
Everyone wants a bigger slice of a bigger pie. A bigger slice of a smaller pie is often all we can handle.
Filed under: Consumers, Demographics, Economy, Marketing, Pricing, Psychographics | Tagged: Brandchannel, frugal fatigue, high income, low prices, Wall Street, Walmart |
Strategies Blog from Horticultural Advantage 
Why can’t we as locally owned garden centers get together to grow the pie – convince more customers to spend money on gardening versus movies, DVD, eating out, etc,
While at the same time growing our individual slice. Taking customers away from weaker independent garden centers. Especially those garden centers that are not interested in establishing a relationship with their customers.
I am one of the “upscale” shoppers Walmart was courting. I live in a rural area with few shopping options, and it was very convenient to pick up certain things at Walmart. All told there were less than ten items I consistently bought there. They also have a clean restroom, which is what typically brought me into the store.
After their facelift, they no longer carry most of the items on my short list. Now, when I stop to use the restroom I usually leave without making a purchase.
The shopping experience at our local Walmart always involves a long wait at the checkout. My time is worth more than the “savings” on a few items.
There are lessons here for IGC’s.
That’s a nice idea Ed. Unfortunately it just doesn’t happen on its own, and there are too many pressures against any huge organized effort toward it. We can grow the pie for ourselves when we learn to market meaningfully with a strategy and a plan. Winging it isn’t working any better than it ever did for sure. It’s hard enough when everything is done the best you can possibly do it. I like your attitude of taking it from the weaker independents that are sleeping at their switch. That’s more proactive than waiting for someone to organize a big effort that brings the business to them. Go for it!