Howard's
Storage World and Payless Shoes have something in common - they have both gone
into receivership. The reasons for their demise are poles apart although in a
sense the same. Let me explain.
Howard's
Storage World was expensive - super expensive. One of their products was a $529
Recycler Step Bin (kitchen waste bin) which had features like carbon filters to
absorb smells and silent lid closure but in the end not enough features to
justify the price tag particularly when competitors had much cheaper
alternatives. Commentators are suggesting that high prices generally caused
their demise.
Payless
Shoes on the other hand went super cheap, claiming to meet fashion demands of
the modern family but in fact only generating a race to the bottom on price. In
the fashion world, cheap prices alone are not enough.
Both
retailers lacked the balance necessary to win over consumers. There are
retailers who are expensive but they offer other benefits like quality,
innovation and brand strength that justify their consumer support. Similarly
there are retailers who are cheap but offer enough other qualities to make them
desirable. How to get the balance right is the $64,000 question and a quandary
for every retailer.
The
ingredients that make a successful retailer are many and varied but If there is
one quality that stands out it is probably innovation. Exciting your customers
and showing them that you are on their side with constant improvements in your
product range, and how you deliver retail service, could be a great way to
avoid the experience of our high-profile failures.