Finding the new balance in retail between price and value

In the retail sector, the expression "If you don't like what's being said, change the conversation" resonates profoundly, especially concerning price and value. This statement is more than just a catchy phrase; it encapsulates a strategic approach that can redefine how customers perceive a product or brand. This article will explore how this concept can be applied in the retail sector to shift the focus from price-centric discussions to value-driven narratives.

The price-value paradigm in retail

In retail, the conversation often revolves around the price. Price tags are tangible, easy to compare, and therefore a primary focus for both consumers and retailers. However, an excessive emphasis on price can lead consumers to overlook the inherent value of a product or service. This is where changing the conversation becomes crucial.

Shifting focus from cost to value

The key is to shift the customer's attention from the cost of a product to the value it provides. Value can encompass various aspects – quality, durability, brand prestige, customer service, the entire shopping experience, and so forth. By emphasizing these elements, retailers can create a more compelling narrative that justifies the price and increases perceived value.

Storytelling as a tool

Effective storytelling is an invaluable tool in this context. By creating stories around products, retailers can connect with customers on an emotional level. This connection can transform a simple purchase into an experience, associating products with feelings, memories, and aspirations, which are much more influential than just the price. One of the consumer trends that will come to the fore next year is “#unique_story_weaving”.

Unique story weaving goes beyond traditional storytelling by not just telling a story but intertwining different storylines and elements. It's an art of creating deep and layered narratives that resonate on multiple levels. Where storytelling is often linear and one-dimensional, unique story weaving offers a multidimensional experience where each story element is carefully chosen and intertwined to create a rich and immersive narrative. It represents a higher dimension of storytelling where the listener or reader is invited to dive deeper into the story, make connections, and even form their own interpretations.

In the retail context, unique story weaving represents an innovative approach to engage customers and form a deeper bond with them. Instead of merely presenting products or services, stores and brands become storytellers, taking customers on a layered journey. Each product, every display, and even the store layout itself can be elements of a larger story that customers want to explore.

In unique story weaving in retail, it's all about creating an immersive shopping experience. And this is not just offline! Customers become not just consumers, but (active) participants in the story. For instance, a clothing store might present a series of garments as part of a story about a journey around the world, with each piece reflecting the culture and traditions of a particular country.

It goes beyond mere marketing or branding; it's about building an emotional connection with customers. By weaving stories into the retail experience, customers feel more engaged and connected with the brand, which can lead to greater loyalty and a higher likelihood of repeat purchases. Unique story weaving in retail is about offering a unique and memorable shopping experience that goes beyond the traditional customer journey.

Change the focus from price to value in retail

Successful brands have developed a refined art in changing the consumer conversation from a pure focus on price to more towards the intrinsic value of products. This is particularly evident in the strategies of both luxury brands and eco-friendly brands, each with their unique approach to attracting and retaining consumers.

The approach of luxury brands

Luxury brands have developed a clear strategy focusing on aspects such as quality, craftsmanship, exclusivity, and brand experience. These brands put the superior quality and craftsmanship of their products at the forefront, emphasizing high-quality materials and detailed manufacturing processes. These elements not only justify the higher price but also increase the perceived value of the product.

Another crucial element in luxury brands' strategy is exclusivity. By creating limited editions and exclusive collections, these brands evoke a sense of uniqueness and rarity, making the products even more desirable. Additionally, the brand experience is carefully cultivated, focusing on the shopping experience, customer service, and even packaging, all contributing to an overall sense of luxury and distinction.

An effective tool that luxury brands use is storytelling. By telling the story behind the brand, the designers, and the inspiration for collections, they increase the emotional value of their products, making them resonate more with their target audience.

The strategy of sustainable brands

On the other end of the spectrum, eco-friendly brands emphasize sustainability and ethics. These brands focus on sustainable production practices, ethical working conditions, and the use of environmentally friendly materials. They are often transparent about their manufacturing processes and the origins of their materials, clearly making their impact on the environment and society.

A key aspect of these brands' strategy is highlighting the longevity of their products, as opposed to the fast-fashion trend. This not only promotes more sustainable consumption but also sets the value of their products in a long-term perspective.

Education and awareness also play a significant role in the strategy of sustainable brands. They invest in informing their customers about the benefits of sustainable consumption and the impact of their purchasing decisions on the environment. This not only creates an informed customer base but also fosters loyalty and trust in the brand.

Yes, yes, … I can already see the comments from the critical thinkers coming.

But … how can the mid-segment retailer change the direction of the conversation?

For mid-segment brands, it's more about finding a balance between quality and price. Efficient production and smart procurement processes can initially result in a strong price-quality ratio. But this approach will not suffice. There are other elements that can help strengthen the value story. Below, we describe 3 elements for inspiration:

- Create a distinctive brand identity. Developing a unique brand story and consistent branding is crucial. This strengthens brand recognition and builds customer loyalty.

- Incorporate sustainability and innovation into company values: Integrating environmentally friendly practices and innovation in product development and operations positions mid-segment brands as both ethically responsible and innovative.

- Ensure strong customer focus and digital presence: A focus on excellent customer service and a robust digital presence are essential for building a strong relationship with the customer base.

By combining these elements, mid-segment brands can distinguish themselves with their proposition. It seems clear that there is primarily a focus on a unique offering and experiences, while remaining accessible to a wide audience.

Implementation of the shift from price to value

In the current retail landscape, the shift from a focus on price to value plays a crucial role. To successfully implement this change, a holistic approach is needed, encompassing both internal culture and external customer experience. This transformation requires an integrated approach, where training, marketing, branding, and customer experience all play a key role.

Training and Culture

The heart of this shift begins with the training of the staff. It's essential that these individuals are not only trained in the fundamental aspects of the products but also in how to convey the unique value proposition of these products. This means moving away from traditional price-focused selling methods to a more story-driven and experience-focused approach. Such an approach requires a deep understanding of the product, the market, and customer needs, where staff learn to deepen the dialogue with customers and emphasize the unique values and benefits of the products.

This change should also reflect in the company culture. Retail companies should therefore create an environment where value creation, not just sales figures, is celebrated and rewarded. This encourages employees to think beyond short-term goals and contribute to a long-term vision focused on sustainable customer relationships and brand loyalty.

For instance, today there are brands like Polestar, where salespeople do not receive commission based on price but on NPS score. Rewarding employees based on customer satisfaction is new but will undoubtedly contribute to higher loyalty and connection.

Marketing and Branding

Externally, marketing plays a key role in shaping and conveying the value story. This goes beyond traditional advertising; it includes targeted campaigns, social media storytelling, and creating engaging in-store experiences. By effectively using these channels, retailers can build a narrative that emphasizes the unique values and the story behind their brand and products. This helps in building a brand identity that goes beyond price competition and focuses on creating an emotional connection with the customer.

Customer Experience

Another pillar of this strategy is customer experience. Modern retailers always aim for a seamless and enriching experience for the customer at every touchpoint. This includes not just the physical store experience but also online interactions, customer service, and post-purchase support. Each interaction is an opportunity to reinforce the value proposition and make a lasting impression on the customer. By focusing on delivering exceptional services and experiences, price becomes a secondary consideration for the customer.

This integrated approach, encompassing both internal and external aspects, is essential for retail businesses that want to succeed in a market where consumers are increasingly value-driven. By focusing strongly on training, culture, marketing, branding, and customer experience, retailers can build a sustainable competitive advantage that goes beyond price and focuses on the real value they offer their customers.

Conclusion

In retail, changing the conversation from price to value is not just about altering a sales pitch; it's about redefining the customer's perception of what they are buying. It's a strategic move that shifts the focus from the cost of acquisition to the value of experience and quality. By mastering this shift, retailers can build brand loyalty that is not easily swayed by price competition and establish a market position that resonates with their customers on a deeper level. Ultimately, it's about creating a narrative where the value speaks louder than the price tag.

Luc Campo – The Retail Engine

23 November 2023