A Toyworld has opened near the newsagency, three shops away, and has started discounting lines we stock. One major licence range is being discounted 28.5% off suggested retail. Theses a range that easily sells at suggested retail. We never have to discount. Nor to the three other retailers with the same products in the shopping centre.
I am not matching the discount being offered by Toyworld as I know it is a mug’s game. Any customer they will win because of the discount will not stick with them, unless they continue to discount, which they cannot do as they are in a major shopping centre with shopping centre rents.
We will beat Toyworld by having a better range, displayed more appealingly, backed by a loved loyalty offer and supported with excellent shop floor customer service. The whole experience will be different.
Comparing the two shops as dispassionately as I could on Sunday, our offer is visually more appealing from outside the shop. We have the same products promoted with context that will appeal to the target shopper. At Toyworld, price comes first and a long distance, in terms of visual focus, than the product itself.
It is a tough call to not match the Toyworld discount as matching them or beating them is the easy move to make. However, as I say, it would be a mug’s move that does not serve the long term plans and needs of the business.
We have invested considerably in providing a premium retail experience and this commitment is paying off. Reacting to an ignorant small business competitor who thinks price is a good strategy is not for us. We confronted a similar situation with a discount ink outlet that opened three metres from our front door. We saw them off.
Specialty retail is a long game. Discounting is not a long game. We need to create stores that are interesting, entertaining and remembered for more than price. We want customers happy when they think about us and our stores.
Shoppers who remember a shop sole because of price are not shoppers delivering the level of margin dollars one needs in an expensive shopping centre situation in my view.
Totally Agree