Fireproof Warehouse?
I found this rehabbed building down the street from me; I’m used to seeing old mercantile and other office buildings converted into lofts, but I’m pretty sure this is my first time stumbling across people now living in a former “Fireproof Warehouse”.
It piqued my interest not only from a ghost sign perspective, but also when it comes to our ability to navigate and counter perception.
As marketers, perception is the a name of the game. What do I think about this brand? Does it have everything I’m looking for? Can I find it for cheaper? Do I want to find it for cheaper?
We’ve been continuously struggling with this idea over the course of the week: “Can price alone be a sound marketing strategy?”
Plain and simple: we have the lowest prices in town.
In the current retail landscape you hear everyone shout it: “Save $144 a week by shopping at W*****t” | “Save $14 by signing up for the Savings Club” | “Preferred Shoppers Save 20% on Tuesdays” | “So and so: always low prices”
It’s nothing new, and the “Great Recession” has spawned a price war that makes the Great Price War of 1931 look like child’s play (that’s a halfhearted joke, but really it’s pretty intense out there if you haven’t have noticed).
Regardless, we worry about protecting our brand’s dignity and giving it the best opportunity to fight in an unruly and competitive market place, but do we really take the time and think how our shopper is perceiving the banter?
We’ve long advocated that you can “save 40% on your grocery bill” (as compared to traditional grocery stores), but that’s basket to basket, or full order (ie. cart or buggy depending on your side of the pond). Meaning that after you get done buying all of your groceries from us, we’d expect you to save about 40% as opposed to the name brands of the same product in a traditional retail outlet (hey, milk is milk).
This also means that in any given week, our banana price may be the same as a traditional store that is running a special, or even more expensive depending on promotions or coupons at another retailer.
More times than not, if a shopper is looking at two products and Grocer X is selling bananas at $.29 this week and Grocer-Y is at $.33, well then Grocer X has the lowest price. The perception is formed; her litmus test (canary in the coal mine) shows that bananas are cheaper at Grocer X, the data proves it.
Pretty simple right?
But what it doesn’t take into account is that for the previous 13-weeks Grocer-X has been selling at $.59 and Grocer-Y has stood stringently at $.33 for over a year; it doesn’t matter, this week Grocer-X has the lowest price.
This is the confine we fight in. Marketers love to go out there and broadcast “lowest prices” or “price matching” to ensure you that you are getting the absolute lowest price when you step into a store. It’s an addiction that most likely will eventually cause a tipping point in the retail industry, and quite possibly be outed as its fatal flaw; the recession has empowered folks to shop around, cherry-pick, and become non-profitable customers at a variety of flailing outlets.
Perception is a fickle, fickle thing when it comes to retail pricing. Sure, stores need to be smarter, and optimized in a fashion to drive costs down, but the industry created this mess when store’s introduced “loss-leaders” and other non-profitable tactics to get folks to the store. The perception was that the shopper wouldn’t notice when the price normalized, or that she’d never come to expect price-matching as an inherent right. She did. And now the retail world is in an upward battle to win her back.
“No, Virginia, price (alone) can never be your marketing strategy.”
It sure would have made quite a few tenants pretty angry if that “Fireproof Warehouse” was ablaze.
Photo(s) courtesy of my Photostream on Flickr
