Finding Ways to Compete Outside of Price

Convenience can be a way to provide value

Author: Tricia Carr

August 21, 2017

Consumers have limitless options when they want to shop. To get the sale, retailers have to be at the right place with the right product the moment a consumer is ready to purchase. But it’s arduous to predict a shopper’s every move. Curtis Tingle, CMO at multichannel media solutions provider Valassis, spoke with eMarketer’s Tricia Carr about how retailers can be there for consumers when they’re ready to buy, and how retailers can compete with Amazon and Walmart without losing sight of their unique value proposition. 

eMarketer: What outside factors are driving change within retail organizations?

Curtis Tingle: One of the shopping habits driving rapid transformation right now is convenience taking over the definition of value. Value has always meant a lot of different things—you had to have quality, availability of inventory and the right price. Now convenience is disrupting value in multiple ways.

One example is the battle for share of stomach. The convenience of prepared foods is completely disrupting grocery retail. There's an all-out war to capture traffic and spending for meal solutions.

eMarketer: Sticking with that example, how has consumers’ desire for convenience played out in the food industry?

Tingle: It's impacting QSRs [quick-service restaurants], fast-casual restaurants, convenience stores and grocery stores—they’re all, to some extent, doing it to each other. There are healthy meal solutions available in all of those channels, and retailers are finding their true competitors in the marketplace.

For example, grocery stores now have sandwich stops, chicken shops, bakeries and coffee shops—those are four traditional QSR formats in the grocery store alone. Convenience stores and drugstores are also competing to bring healthy food alternatives and on-the-go meal solutions to the forefront of their stores. 

“Make sure you not only have the right experience for the customer, but also have the right motivators in place to disrupt the path to purchase.” 

eMarketer: What’s the broader takeaway here?

Tingle: You have to get closer to your customers. You have to know how they shop. You have to know what their interests are, and how those evolve throughout the year and even the day. You have to connect with them when they're on the go, at home, at work and in the store. All of this helps you to better understand their behaviors.

Then make sure you not only have the right experience for the customer, but also have the right motivators in place to disrupt the path to purchase. How do you stimulate interest in your brand? How do you connect with consumers and activate them when they may not have been thinking about your brand?

eMarketer: Amazon and Walmart are at the front of the pack, and convenience is a huge driver for both of their businesses. What can other retailers emulate from these two giants to compete with them on convenience?

Tingle: Amazon and Walmart both bring the integration of ecommerce and brick-and-mortar to life—Amazon is building the right presence in brick-and-mortar for the convenience of its customers, and Walmart is building better integration between the two.

For retailers to compete in that environment, it starts with merging online and in-store sales. Any retailer can make an effort to find data that gives them a better sense of who their consumers are, understand them, engage them and activate them. It’s not hard to do that, but you have to blend the right data and then ensure that you’re constantly engaged in staying true to your value proposition. 

“Retailers aren’t bringing enough relevance to both their loyalty and prospecting strategies.” 

eMarketer: What should retailers not do to try to compete with the likes of Amazon and Walmart?

Tingle: The alternatives [to competing on convenience] are to continue to lose customers to Amazon and Walmart or try to compete with them on price. But low prices become ubiquitous, so that's not a differentiator. Retailers have to bring out their true value proposition to compete and win in the long run, and they have to make sure everything they're doing to engage customers is effective in doing so.

eMarketer: It keeps getting harder for retailers to foster customer loyalty. What else should they focus on to retain customers?

Tingle: Consumers’ expectations are constantly evolving—they’re not even consistent with one consumer throughout the week. Therefore, retailers should have a consumer-centric strategy that gives shoppers control of where they shop and better anticipates what they're going to be interested in. And retailers should blend that with their engagement strategy so they can successfully activate consumers.

Retailers aren’t bringing enough relevance to both their loyalty and prospecting strategies, and that's where they can improve and better communicate to their customer bases. It's difficult to achieve the right level of relevance if retailers aren't taking the time to align the right data to do so. 

Photo by Christelle Bourgeois on Unsplash