As many business owners will now testify, recessions are very unforgiving for poor business models. Look no further than the carnage that has taken place on your local high street. The giant that was Woolworths sold Pick & Mix to people whilst paying premium retail site rates and couldn't make it pay. The guy that took this business online has become a millionaire within 3 years.
However, many retail businesses continue to flourish whilst charging premium prices, so what is the secret? Well Apple supply things that people want and John Lewis provide the necessary levels of customer service. Luxury brands such as Louis Vuitton supply both and are enjoying record sales. At the lower end Primark thrive on filling a certain market segment with 'value' product without much service. The retail sector, like many others, is polarising at both ends. Those retailers stuck in the middle with no point of difference are in a world of hurt. Think of HMV who sell products available cheaper on the internet via stores staffed with average staff to a target audience who prefer to shop online! Ouch.
Remember only 15% of people only buy on price. That means 85% of customers do not. But they still demand value, so what is yours? If you think I am wrong and there is no money to be had in the economy go to a high end retailer and see what occurrs. I can assure you there is no lack of money. 90% of people who were in a job in 2008 are still in one. There are still hundreds of thousands of wealthy potential clients out there with significant disposable income. How are you going to reach them and convey your value message?
The winners will successfully deliver their marketing message and have trained staff who don't just pay lip service to customer service. How will you fare?