We live in turbulent times. The report this morning in the Wall Street Journal talked of the 6th CEO of a publicly held company getting fired within the past eight days since the start of the year. While many industries are in distress, the one that caught my attention over the past couple of weeks is the retail industry. As consumer demand wanes, many retailers are falling by the wayside. So what is common amongst retailers that are likely to survive and even emerge stronger at the end of this downturn? While being financially well-run is a given, the defining characteristic of strong retailers today is a well-defined and commonly understood focus.
Whether it is Wal-Mart’s single-minded focus on helping their shoppers save money or GameStop’s allegiance to videogame buyers, the emerging theme amongst retailers that are better weathering the storm is picking a benefit area and sticking to it. In contrast many retailers that have filed for bankruptcy could not offer their shoppers unique experiences, price points or merchandize. Want to know if your company is focused or not? Ask 10 people in your organization to write down who your target consumer is and what unique benefit(s) your company offers. If you get widely varying answers, even from people in the same department, you know you have your work cut out.
So how can you find the right focus? An important foundation in a focused strategy is a needs-based segmentation of the market and the selection of a well-defined target segment. By knowing the relevant occasions and product needs of your target segments, you can be the best in what you do rather than trying to be many things to many people and failing in the process.
It seems natural in a recession to seek out as many consumers as possible. However that will lead to a diffused effort and a weak and diluted message to your consumers. Staying true to a focused set of consumers and uniquely addressing their needs has a higher likelihood of success.