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Every day there’s another discussion on retail, store closings, and many articles pointing the finger at Amazon. Aside from Williams-Sonoma, most retailers haven’t seen a significant shift to online sales. There are many retailers that are growing and they’re seeing increased foot traffic in stores.
This weekend I picked up a book, and even though it was from 2009, it still has significant relevance in today’s world: “Collapse of Distinction” by Scott McKain.
I picked it up suspecting I’d find some reinforcement of these trends we’re seeing in the marketplace today. Mr. McKain notes that organizations fall into one category among their competition: sameness, differentiation and distinction. He challenges that many organizations try to differentiate by changing hours of service, by offering discounts, holding more sales or making sales longer. These moves don’t differentiate because they’re easy for the competition to replicate. And the competition does replicate, creating world of sameness. In a world of sameness, organizations like an Amazon or Starbucks or Apple will come in and take over. Not because they’re so much different but because they are successfully creating a distinction between their organizations and others in the marketplace.
Take organizations like The Limited or J. Crew. These merchants began their business with a vision. A vision that was truly distinct in the marketplace at the time. The Limited created affordable, trendy clothes for the young professional woman. J. Crew was to be the price conscious antidote for the growing legions of yuppie shoppers, from “Forbes” The Cult Of J. Crew.
These are brands that lost their points of distinction as competition became stiff. They began discounting, merchandising shifted to compete directly with other brands vs. staying true to their core values and points of distinction.
As we look at others who are shuttering stores – Macy’s, JC Penney, Sears – they too have succumbed to the wars of discounting and “me- too” positioning.
So, what are we to do? How do we become distinct in a world of stiff competition and sameness? Mr. McKain points out that we most likely can’t change our products to be unique. The competition will just join us. The point of distinction will most likely come in the form of service. Think about Starbucks. Does the coffee really taste any better than any other? It’s the experience that Starbucks has created that has us all hooked. The barista at the store I only go to a couple of times a month when I’m at the office in Minneapolis remembers my name and my order. How she does it, I don’t know, but it sure makes for a quality experience.
There are four cornerstones to create distinction that are defined by Mr. McKain: Clarity, Creativity, Communication and Customer Experience Focus.
As a customer loyalty practitioner, these cornerstones are core to how we work with our clients and how we work to develop programs that support or drive the distinction.
As we delve deeper into the retail landscape, there’s also a sameness in how these organizations are marketing. We mentioned discounts and sales already. There is also what many are calling loyalty programs. In a world of sameness, many retail loyalty programs are the same. Spend a couple hundred bucks, get a discount. Use our credit card and you’ll get that discount sooner and more frequently.
Loyalty programs, done right, are designed to differentiate your brand and your customer experience to build strong, profitable relationships with your best customers. Using Mr. McKain’s cornerstones and a partner like Aimia, you can build a customer loyalty strategy that creates true distinction for your brand.
It’s time to be distinct again.
Erin Raese is SVP Customer Loyalty at Aimia Global Loyalty Solutions.