Wal-Mart will be selling a Compaq Presario notebook for $298 – down from a similar unit that currently sells for $548!
And Wal-Mart’s home entertainment V.P. calls it a “screaming value”. Wow! I guess so!
Every other retailer in the consumer electronics space had better hold on to their hats and kick it into high gear. If they don’t, they’ll get left crossing the finishing line in last place…..or more accurately (in today’s world of retail failures), not even being in a position to finish the race when the economy starts to turn around in earnest.
Whether it is apparel, housewares, food, toys, sporting goods, school supplies, or HBA, the Wal-Mart model works. A few months before the beginning of our current economic troubles, people were questioning whether the Wal-Mart model was dead…or at least facing some hard times. But no-one can match the Wal-Mart model head-to-head. Their powerful relationship with vendors and their supply chain systems is unequaled. And that statement is coming from someone who has had questions about some of Wal-Mart’s historical tactics when it comes to “associate” relationships and the environment.
But the fact remains that when you talk about providing value – at least perceived value – no one does it better. Costco is close, no doubt. But for everyday value, Wal-Mart calls the shots.
So what does that mean for everyone? If you’re going to compete, you have to find…and clearly define…your unique retailing niche. And you need to do so with a clearly defined position and products that can’t be found anywhere else. We’ve been talking about it here for a couple of years now, but this latest example drives it home one more time. Retailers MUST start taking their private label strategies to a new level. It’s not enough to simply source products from existing suppliers in an attempt to equal the national brands. Retailers have to compete with the national brands in terms of real innovation – and then link that innovation to their own proprietary brands with long term legs.
Why? Because anything less than true brand differentiation is a short-term, fleeting competitive edge. Retailers must compete not just on price or marginal product improvements, but also by building an emotional relationship with their customers. This is where proprietary brands deliver unexpected value to the body and the heart. That’s how to win over today’s savvy consumer.
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