How consistency and familiarity quietly eliminate your competition.
Every retailer wants customers to choose their store over the competition.
We invest in advertising, merchandise selection, store appearance, employee training and promotional campaigns, all designed to convince consumers that our business deserves their patronage. But perhaps the greatest competitive advantage a retailer can achieve is something considerably less dramatic.
Becoming the store customers think of first, without having to think about it.
When customers need a particular product and automatically consider your store before exploring alternatives, you’ve accomplished something that even the most expensive advertising campaign may struggle to achieve. You’ve become their default choice.
And in retailing, being the default choice can be considerably more valuable than being the cheapest choice.
The Power of Being Familiar
Think about your own purchasing habits. You probably have a preferred grocery store, pharmacy, restaurant or automobile service provider. You may occasionally visit competitors, but most of the time, you return to the same businesses.
Why?
Perhaps their prices are competitive. Perhaps their employees are friendly. Perhaps their locations are convenient. But more likely, your preference developed through a series of satisfactory experiences that gradually eliminated the need to reconsider your decision.
You know what to expect. You know where things are located. You trust that the business will deliver what it promises.
Familiarity reduces the effort required to make a purchasing decision.
That is a powerful advantage, particularly in a marketplace where consumers are confronted with seemingly unlimited choices. Retailers often focus on giving customers reasons to visit their stores. Equally important is eliminating reasons for customers to shop elsewhere.
Consistency Is More Important Than Occasional Brilliance
Many retailers believe that exceptional customer service means occasionally doing something extraordinary. Perhaps an employee goes to unusual lengths to locate a difficult-to-find product. Perhaps management resolves a complicated complaint with remarkable generosity.
Those experiences certainly matter, but customers develop long-term loyalty primarily through consistency.
A customer who receives excellent service on Monday, indifferent service on Wednesday and poor service on Saturday doesn’t know what to expect. And uncertainty encourages comparison shopping.
During my approximately 40 years operating an independent footwear business, I learned that customers didn’t necessarily expect perfection. They expected reliability.
They wanted knowledgeable employees, properly fitting merchandise, reasonable prices and a shopping experience that respected their time. More importantly, they wanted those things every time they visited.
Consistency transforms individual transactions into customer relationships.
A retailer who delivers a dependable experience 95% of the time may develop stronger customer loyalty than a competitor who occasionally delivers something spectacular but frequently disappoints.
The Hidden Cost of Making Customers Start Over
Every time a customer considers purchasing a product, a decision-making process begins.
Where should I shop? Who carries what I need? Will the employees understand my requirements? Can I trust the quality? Will I receive assistance if something goes wrong?
When a retailer becomes the customer’s default choice, many of those questions have already been answered. The customer doesn’t need to investigate alternatives because previous experiences have established confidence.
This saves the customer time and mental effort. It also saves the retailer money.
Consider two specialty retailers. Retailer A constantly attracts new customers through expensive advertising and aggressive discounts. Retailer B has developed a substantial base of repeat customers who return regularly and recommend the business to others.
Both may generate identical annual sales, but Retailer B could enjoy substantially lower customer acquisition costs, stronger gross margins and more predictable revenue.
Of course, every retailer needs new customers. But a business that continually replaces lost customers must work harder simply to remain in the same place.
Employees Are the Foundation of Familiarity
One of the greatest advantages independent specialty retailers possess is the opportunity to develop personal relationships with customers.
A customer who walks into a store and is greeted by an employee who remembers a previous purchase immediately experiences something that is difficult for many competitors to duplicate. That recognition communicates that the customer matters.
In footwear retailing, an experienced salesperson might remember a customer’s shoe size, preferred brands, fitting challenges or previous purchases. The customer doesn’t need to explain everything again. That convenience has value.
However, this advantage depends on employee retention, training and management consistency. When experienced employees leave, retailers lose more than their product knowledge. They may also lose valuable customer relationships.
Retailers should therefore recognize that investments in employee development and retention can directly influence customer loyalty.
Customers often develop relationships with people before they develop relationships with businesses.
Smart retailers make certain those relationships strengthen the store’s reputation rather than depending entirely on one employee.
Make Doing Business With You Easy
Retailers sometimes unintentionally create obstacles that encourage customers to explore alternatives.
Inconsistent operating hours, confusing return policies, unreliable inventory availability, unanswered telephone calls and poorly trained employees all introduce uncertainty. Each inconvenience gives customers another reason to reconsider where they shop.
Fortunately, many of these problems can be corrected without substantial financial investment. Start by examining the entire customer experience.
Can customers easily determine whether you carry the merchandise they need? Are your business hours accurate everywhere they appear online? Do employees answer questions consistently? Are special orders handled reliably? Are customer complaints resolved promptly? Does the checkout process respect customers’ time?
These details may appear insignificant individually, but together they shape a customer’s perception of reliability.
Convenience isn’t always about location. Often, it’s about removing frustration.
Marketing Should Reinforce Familiarity
Advertising is frequently designed to generate immediate transactions. A retailer announces a sale, promotes a new product or introduces a limited-time offer.
Those messages can be effective, but they represent only part of marketing’s responsibility. Marketing should also reinforce the reasons customers already trust the business.
Consistent messaging about knowledgeable service, merchandise quality, dependable selection and customer satisfaction strengthens the store’s position in consumers’ minds.
The objective isn’t necessarily to persuade customers that your store is better every time they see an advertisement. It’s to ensure they remember your store when a purchasing need arises.
This is particularly important for specialty retailers selling products purchased infrequently. A furniture retailer, for example, may not see the same customer every month. But when that customer eventually needs a mattress, dining table or recliner, the retailer wants to be the first business considered.
Maintaining familiarity between purchases requires consistent communication, not necessarily constant discounting. Email newsletters, relevant social media content, community involvement and helpful product information can keep the business visible without sacrificing gross margin.
The best marketing doesn’t always create urgency. Sometimes it simply preserves preference.
Measure Loyalty, Not Just Sales
Retailers devote considerable attention to daily sales reports, average transaction values, gross margins and inventory turnover. Those measurements are essential.
But how many retailers regularly evaluate the strength of their customer relationships?
Consider tracking repeat-customer purchase rates, customer retention, referrals, complaint resolution and the percentage of sales generated by existing customers.
For businesses with customer databases, these measurements may already be available. They can reveal whether the store is developing lasting relationships or simply generating isolated transactions.
A growing customer base means relatively little if existing customers are quietly disappearing. And a successful promotional campaign may provide only temporary benefits if the customers it attracts never return.
The Competition You Never Have to Fight
The ultimate objective isn’t to prevent customers from ever visiting competitors. That would be unrealistic. Instead, the objective is to become so consistently dependable, familiar and convenient that customers see little reason to explore alternatives.
When that happens, competitors must offer something sufficiently compelling to interrupt an established purchasing habit.
A slightly lower price may not be enough. A flashy advertisement may not be enough. Even a new store opening nearby may not be enough. Because the customer already has a business that meets their needs.
The strongest competitive position isn’t always having customers believe you’re better than everyone else. It’s having customers feel no need to find out.
That advantage isn’t created overnight. It’s earned through thousands of ordinary transactions, dependable employees, consistent communication and promises repeatedly fulfilled.
Retailers spend enormous amounts of money trying to get customers through their doors. Perhaps they should spend more time making certain those customers never feel the need to look elsewhere.
Alan Miklofsky is a semi-retired retail business consultant and former owner of Alan’s Shoes, an award-winning independent footwear retailer in Tucson, Arizona, which he operated for approximately 40 years. He founded Shoes.com in 1998 and served on the National Shoe Retailers Association Board of Directors for 29 years, including as Chairman from 2009 to 2011.
