I guess we all remember James Carville's famous line during the first Clinton run for the White House: "It's the economy, stupid." In those four words, he crystallized the misgivings Americans had about another Bush presidency, which was perceived as paying too much attention to foreign policy at the expense of the pocketbooks of folks back home.
After going through the spring earnings release cycle for the majority of our nation's retailers and listening to an endless stream of conference calls, I'm coming to the conclusion that many of these companies need to hear these four words: "It's the customer, stupid!" Whether it's Wal-Mart's
Fortunately, a few retailers still have their heads screwed on properly. Witness a tight customer focus at Target
In that vein, I was intrigued by a recent press release from Best Buy
This is a continuation of the company's "customer-centricity" strategy that it began a few years ago. The initiative identifies key customer groups within the trade area of each store and tailors the merchandise assortment and service offerings to those customers' individual needs. The company has even gone so far as to add labor expense to drive an improved customer experience. Quite a novel idea in an age where self-checkout, self-service, and self-anything-else-you-can-think-of are the North Star for most big-box retailers.
Best Buy is taking customer-centricity seriously. The company has segmented its customer base into five targeted groups: the affluent professional looking for the latest technology with top-notch service, time-starved suburban moms, small-business customers looking for integrated solutions, the family man who wants proven technology, and the early-adopter social customer. The goal is to transform the company into a delivery system that satisfies the needs of these customer groups better than any other technology and entertainment retailer does.
Time will tell how well this strategy pans out. Admittedly, the stock has had a bit of a choppy ride over the past year. But in a world where retailers are looking more and more alike, focusing on the hot trend for the season, I admire the independent players that have a clear strategy to differentiate themselves from the pack. And the fortitude to follow that strategy, even if it means a quarter that doesn't meet analysts' expectations.
For retailing insights sure to satisfy, read on:
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- Are Dollar Stores Approaching Saturation?
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