Niche Retailing and The One Thing
What do you do better than anybody else? Nail your "One Thing" and everything else will fall into place.
Published by Inc.com
As a retail consultant, I tend to look at specialty stores differently than other consumers. When I walk into a specialty store, I find myself quickly taking in the overall concept, the merchandise assortment and display techniques, who the customers are, and how well the sales staff is servicing them. I'm looking at inventory levels and housekeeping and signage, and on and on. I'm always looking for something I haven't seen before, something I can learn, something I can take away and share with my clients.
Sometimes what I see concerns me greatly: Assortments and presentations that seem to be disjointed; housekeeping that's lacking a crisp attention to detail; a sales staff that seems indifferent; a concept that isn't immediately clear to me, and thus not likely to be clear to customers.
And then there are times when what I see just about takes my breath away. Stores that just have it all together. Stores that are exceptionally well thought out, and executed just as well. These are stores that know what business they're in, and what businesses they're not. They know who their customer is, and who their customer isn't. Just looking at the store you know they are very good at the little things. Another thing you notice about these stores -- they're always full of customers.
For any niche retailer, large or small, success can be defined as that point where clear-headed strategy intersects with precise execution. One without the other is like the chicken without the egg. It just doesn't work. But unlike the chicken and the egg, we know what must come first in retail. It has to be a strategy, a plan, a vision of where you need to get to as a business and how you're going to get there.
For any niche retailer, the critical characteristic of any successful strategy must be focus. Focus is a fundamental requirement of any business strategy, but it is critical if a small retailer is to compete successfully against larger competitors. Niche retailers don't have the luxury of doing everything their larger competitors do, or even everything their customers might like them to do. They simply don't have the financial or human resources. They must focus their time and resources on what I call the One Thing.
Strategic focus centers on your core competency, and it comes down to a central question: What is the One Thing that you do best, better than anybody else, better than any competitor, real or potential? What is the One Thing that your customers come to you for, before they go anywhere else? Answering these questions correctly, and precisely, is essential to a successful strategy. With limited time, attention and resources, it's the difference between doing One Thing exceptionally well, so well that you establish a formidable competitive advantage against other retailers, large and small, and doing several things not so well, or maybe just okay.
Here's a mental image that might be helpful. Think of the solar system, the sun and all the planets that orbit around it. The sun is your core, your focus, your One Thing. It's where the heat and light in your business emanate from. Everything else you do revolves around that core. Those products and services that you offer that are most closely related to your One Thing are the inner planets. They live off the heat and light of the core. There is great synergy between the core and these products and services. Conversely, the more distant planets are those products and services most removed from your core. They exist in relative cold and darkness. There is little synergy between them and the core. It is worth questioning whether they are contributing positively to the whole, or are taking more time and attention than can be justified.
You should be able to define your One Thing in a single sentence; two at the most. It should state who you are, what products and services you offer, and who your customer is. Most importantly, it should establish clear boundaries that limit the scope and range of our business to the One Thing. When well crafted, this sentence or two becomes your mission statement, and can serve as a valuable tool to keep you on track.
Identifying the One Thing, and focusing your time and energy on it, can be a very liberating experience for a small retailer. Suddenly, a business that seemed to have a million moving parts, all competing for attention, becomes much simpler. The fog of day-to-day chaos gives way to clarity. Priorities become clear. All of the peripheral, extraneous stuff that seemed to command more attention than it deserved, whether it's marginal product categories, unprofitable customers or struggling stores, suddenly becomes less important. You're able to quickly identify the business metrics that are critical for success. Margins improve. You're able to execute more effectively and efficiently, reducing expenses. Profits improve. You're able to move beyond the immediate moment, and focus on critical mid and long term issues. You're able to provide your team with a compelling vision and a clear set of objectives and expectations.
When you walk into that store that has it all together, what you're really noticing is a strategic focus, combined with precise execution. They make it look simple because they've actually made it simple. Find the One Thing in your business, build your strategy around it, and before long you'll start to notice other retailers coming around, checking out your store, trying to figure out how you make it look so simple, trying to figure out the secret to why you have it all together.