What's so special about specialty retail?
Beginning in the 1970s, specialty retail came into its own, as merchants focused on capturing leadership positions in niche segments. Over the years, lines have blurred with dramatic changes in consumers' lifestyles.
Plummer Insight: The successful retailer preserves and burnishes its unique franchise while adapting to constantly changing tastes.
Specialty retail includes:
Hardgoods specialty retailers:
Fashion specialty retailers focused on:
Businesses that offer services rather than specific merchandise have grown tremendously as consumers have become increasingly pressed for time. With both spouses having careers, the demand for businesses that offer needed services risen dramatically.Plummer Insight:
Branding a service through retail locations means the consumer's experience must meet the brand's essence in each and every location.
Retail service includes:
(tools, tuxedo, video, party supplies)
Beauty salons/hair cutting
Rent to own
Phone/cable service retail
Unique factors in retail services
The industry quickly learned that consumers' expectations
must be met to be successful. Everyone chased building recognition, not
brand building. Now they've learned that — like most direct-to-consumer
businesses — even virtual retailing requires that a brand must
be built first so the consumer will have an expectation to be met or
Retailers go to market through multiple channels — store, catalog and Web site. Merchants who are proven brand builders and savvy merchandisers will capture cross-channel synergies without diluting the unique qualities of the franchise.
More than ever, direct marketing appeals to consumers
because of their busy lifestyle. The challenges are achieving and maintaining
visibility in this crowded market and communicating genuine differentiation.
The ability to think outside the box — to zig when everyone else is zagging — is critical. We believe that the primary requirement is creativity — i.e., a merchant who can create knockout advertising and a "wow" assortment is headed for success in this segment.
Merchandising a page is much different from merchandising
a wall. But the overall shopping experience must match the brand's essence.
This is a crowded arena but it still offers great appeal to the consumer,
who is short for shopping time or prefers the convenience of catalog
Building a brand with an essence that matches the targeted consumer is of utmost importance — followed by a consistently positive experience, from catalog to ordering to fulfillment.
Although the Fuller Brush man and the Avon lady seem
long gone, direct selling is on the rise and is a wonderful way to reach
many customers who don't have the time to shop. Party planning as an
approach seems to be fitting the bill.
Find the person who can organize a database and sell belly-to-belly and you've got a winner.
Consolidation is the byword in this segment. It means:
greater buying power, regionals either "differentiate or disappear" and
efficiencies in operations.
The value segment is highly competitive with very efficient operators. If you cannot operate at this level then you need to focus on your customers lifestyle and build an assortment and services to best meet the customer's expectations. There is no middle road.
servicing customers based upon price and lifestyles includes:
Prepared foods to go
Drug store chains
Mass merchandisers (Kmart, Walmart, Supertarget)
Compared with "big box" retailers, these are smaller
boxes with assortments limited to better-selling products. These stores — such
as Kohls, Mervyn's and Goody's — offer convenience shopping, which
makes them more appealing to today's busy lifestyles.
Advertising and promotions drive these businesses, creating a sense of good value and safe fashions.
These retailers — which include Marshalls, Ross Stores and TJMaxx — sell
branded apparel for less. These organizations are facing increased pressure
from traditional department stores, which are becoming more promotional
with the pricing of branded merchandise.
The off-price retailers must constantly restate their case in the form of a convincing quality/value proposition to stay competitive.
The entire food service industry experienced dramatic growth through
the '70s and '80s and is now seeing equally dramatic change, as lifestyle
is becoming so important in the market place. Lines are blurring between
quick serve and dining segment.
Success in the rapidly changing food service industry means leadership. The better players are able to match consumer tastes with high quality product in format with low operations costs. The trick is to keep initial capital costs low.
The industry grew significantly as the "value meal" grew in importance.
Now, consumers are looking for differences. There is demand for higher
quality and more fashionable products as well as healthier food (hence,
the growth of Jamba Juice and similar chains). The quick serve industry
is facing competition from organizations offering prepared food to go
(supermarkets, natural foods markets, convenience stores, delivery services
and freestanding prepared foods to go stores). There is also the emergence
of quick casual, a category of restaurants offering purchase at the counter
with seating in the restaurant. With labor challenges — both high
cost of labor and scarcity — the industry is looking for ways to
simplify operations at the unit level. Commissary operations are being
developed so that much of the food preparation can be done at a facility
at which the quality of labor is less of an issue.
The future belongs to organizations with adroit, quick moving retail executives, superior operations managers, and sharp-minded financial professionals.
We have seen the growth of chains in the casual dining category offering
trendy meals with consistent quality and atmosphere. In addition, we
have seen the development of chains serving the business meal customer.
With the advent of restaurants in the quick casual sector, dining operations
are facing more pressures to increase the speed of service and match
the pricing structures of the quick casual sector.
The quality and cost of labor is an increasingly big issue for this sector and it affects the ability to operate at the level defined by the brand's essence.