Posts tagged ‘pricing strategy’
May 10, 2012
“Variety is the spice of life,” and of your shop. I have entered countless boutiques who sell several of the same products…typically national brands. For example, we all love Melissa & Doug toys, right? I would guess so because they are sold in almost every kids’ boutique I enter. There are a few flaws with selling the same product as your competitors…especially if they are local:
- Price. If every boutique in the area sells the same product, it will come down to price and price alone. Speaking as a consumer, one could love ABC Boutique and patronize it often, but if they sell the same product as a local competitor, for a few dollars or percentage points more, a consumer would shop at the less expensive shop.
- Commonality…and Price (again). Boutiques aren’t the only supplier of the aforementioned toys. Big box retailers (i.e. Target, Wal-mart, Toys R Us) also sell them. Guess who can price them lower? The big box retailers, of course! Many of them (Wal-mart is famous for this) use toys as a “dog” in terms of pricing strategy. This means they may price them at cost (or even below! <gasp>) in order to draw customers into the store. Customers come for the inexpensive toys, and stay to buy household necessities (and possibly splurge items) while there. So, although the store is perhaps losing money on toys, they are more than making up for it for on other products purchased which have a much higher profit margin. Put yourself in the average consumer’s shoes…would you shop at ABC Boutique for a national brand toy, or would you shop at Target where you could get it cheaper (and pick up some milk while you’re at it)?
- Being Forgettable. You want repeat customers, correct? The answer should be a resounding “yes!” A primary way of achieving this is by being memorable. Selling unique products, being in a niche market, offering services or products which differentiate you from your competition. Common, national brands do not accomplish this. Unique accomplishes this, and that can easily be done with handmade products and products made by local artists.
- Brand Name Designers. I have seen boutique ads touting “big name” designers…not as big as say Vera Wang, but perhaps big in the boutique / retail scene. However, the flaw with solely carrying and advertising these names is that many of your customers have no idea who they are. The average boutique customer, be it a local homeowner or a tourist, is probably unfamiliar with these lessor known, (but big name in some circles) designers. An ad or shop solely showcasing these artists would not reach many in their target market. Some, yes, but not many. It may even intimidate or isolate some (“ooh…I’ve never heard of her, perhaps I’m not chic enough to shop there”). However, touting local artists, and truly unique products, could reach more of your target market by tugging at their heart strings or their curiosity. Afterall, consumers nowadays are more touched by buying from a local designer, than they are buy purchasing a national, or “big name” designer, who quite possibly manufacturers their items overseas.
Consider this when you are sourcing your next line of products. Then, peruse our Gallery and envision some of these items in your shop and how they might draw in more of your market, or an additional part of your market on which you are missing out.