3 strategies of the most successful retailers in the USA

It goes without questioning that the retail landscape is changing drastically. In the last five years we have seen heritage chains peril under the pressure of competitors like Amazon and Target. It raises a question - how can retailers win against capital-rich competitors like Amazon? In this blog post we will explore three unique strategies used by some of the most successful and creative retailers.

Alternative Inventory Strategies

Les stocks sont l’un des actifs pesant le plus sur le bilan de performance des distributeurs et il est difficile de maintenir autant que de prévoir le bon mix de produits en stock saison après saison, année après année. Opter pour des stratégies alternatives pour s’approvisionner, qui ne dépendent pas de l’achat de marchandises, est un moyen d’augmenter les opportunités de ventes à la hausse. Farfetch et Best Buy sont deux distributeurs qui ont élaboré des stratégies innovantes. Farfetch sert de marketplace pour les petites boutiques de luxe. En échange d’une commission sur leurs ventes, ces boutiques locales accèdent à une clientèle adepte du luxe dans le monde entier. Best Buy est un autre excellent exemple d’exécution de stratégie alternative. Best Buy a compris que les clients utilisaient leurs magasins pour découvrir et s’informer sur les produits avant d’acheter en ligne sur Amazon. Au lieu de lutter contre la tendance, Best Buy a choisi de louer de l’espace à certaines marques en tant que mini showroom, a diminué ses niveaux de stock et a adopté une politique d’alignement des prix. Alors que certains distributeurs déposaient leur bilan, Best Buy a augmenté son cours de bourse de plus de 500% au cours des 7 dernières années (décembre 2012 – décembre 2019).

A fair and attractive price range

It’s no secret that the consumer is pushing for lower priced goods. Eroding profit margins and a booming off-price business signal the consumer’s taste for markdowns, promotions, and off-priced goods. There is something very simple and powerful about a fair price point that speaks to all consumers without a markdown or promotion. Target, TJX, and Costco are three examples of retailers who understand this concept. Espacially Target is interesting because their apparel merchandise speaks to the more fashion forward customer without a heavy price tag - something Walmart has never been able to achieve. With younger generations focusing their disposable income on experiences, and rising debt to income ratios due to growing student debt- there is little room for apparel retailers to grab the consumers attention with expensive product. A product mix that includes democratic price points is sure to win market shares in these conditions.

An offer that meets the demand for products with a "practical" dimension 

Department stores and malls were incredible until online shopping became seamless and easy with free shipping. Department stores and malls failed to recognize that the priorities of consumers are changing. As the old saying goes “Time is money.” Our society is instant - we want information now, we want takeout delivered now, we want cars to show up at our doorstep in minutes to take us to our specific destination… now. All controlled from the palm of the hand.

What is so compelling about going to a mall, finding parking, fighting the crowds, looking for the item you want, waiting for a dressing room, waiting in line to check out, fighting the crowds, finding your car, and sitting in traffic? Nothing. With one click purchase, free shipping, 2-day delivery, and free returns, wouldn’t you rather spend your afternoon doing something better than sitting in mall traffic? Absolutely. Retailers who are winning understand that convenience is the new luxury. Between Uber, Seamless, Amazon, and luxury retailers like Net-a-Porter, our tolerance for the old retail model is declining quickly.

Nordstrom’s buy online pick up in store and the Nordstorm Local concept are seamless and convenient operations that still bring the consumer into the store location without the hassle. Amazon has shown a particularly deep understanding of this concept with the rollout of their 1-day shipping for Prime Members and also in their new brick and mortar presence. All Amazon brick and mortar stores are small, easy to navigate, and the checkout process is either completely gone (Amazon Go) or expedited with mobile check out (Amazon 4-Star, Amazon Books). Net-a-Porter is a great example of a luxury retailer who understands that their customers have better things to do than sit in a dressing room. Luxury goods can be white glove delivered anywhere in New York City or the Hamptons within hours… now that’s luxury.


Go further with Mercio: 

To analyse and optimise your stocks, an on-the-fly, real-time data mining and visualisation tool will link your product repositories to your stock and receipt information, with real-time changes in your financial results. Mercio's retail price optimization platform will enable your teams to implement and industrialise differentiated pricing strategies to accurately drive traffic, margin and price image across tens or hundreds of thousands of SKUs. 

La plateforme d’optimisation du prix pour la grande distribution de Mercio permettra à vos équipes de mettre en place et industrialiser des stratégies de prix différenciés pour piloter avec précision le trafic, la marge et l’image-prix, et ce sur des dizaines ou centaines de milliers de références.

A la recherche de lectures sur le pricing ? Laissez-nous votre email pour recevoir nos eBooks !

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Valentine Dreyfuss
Valentine Dreyfuss

Valentine is the founder and CEO of Mercio. She has brought together the price-image challenges of retail heavyweights and the cutting-edge innovations of our engineering teams. Deeply committed to European technological sovereignty, she is Co-President of La French Tech in Düsseldorf, Germany, and passes on her knowledge to HEC students every year.