In the April issue of Harvard Business Review, Ken Favaro, Tim Romberger and David Meer offer advice for retailers during the recession.
The authors explain that, while consumers are tightening their belts and retailers are suffering the effects, there are steps that can be taken to win new customers and earn their loyalty.
Favaro, Romberger and Meer offer this five-point plan for retailing in a recession:
1) Focus on disloyal customers: To gain a new share of the market, try to attract customers who switch between suppliers.
2) Close the needs/offer gap: Instead of offering more of what's already selling well, identify what the 'switching' customers need.
3) Reduce bad costs: If you need to cut costs, make sure it is in areas that add nothing to what customers value and are willing to pay for.
4) Cluster your stores: Identify a limited number of 'clusters' of stores that have similar customers, thus saving the need to tailor each individual store to its local market.
5) Retool core processes: Revise basic retailing processes to encourage everyone to apply the above rules.
Five Rules for Retailing in a Recession
Ken Favaro, Tim Romberger and David Meer, Harvard Business Review, April 2009
