Last week, I sat through a meeting with one of my clients where we discussed the infamous question of “who are we?” that faces every retailer. As retailers grow – both in store count and in product diversity – the ongoing challenge is to keep a laser focus on what the brand really stands for. Growth for the sake of growth can deteriorate the essence of the brand faster than any other catalyst.
Developing a Strategic Market Analysis is critical for companies that grow one of two ways: 1) organically or 2) through acquisition. For organic companies, the question is easier to implement with varying geographic nuances. Speed to market share is much slower with companies that build new stores (organic growth) then it is for companies that acquire locations. The challenge with growth through acquisition is that the company is buying someone else’s dream. Enveloping their dream into the go-forward direction of the acquiring company is the toughest part.
Companies in growth modes are faced with an ongoing dilemma of keeping their expanding portfolio on plan with regard to their strategic branding direction. In concert with maintaining a store database, creating a strategic market analysis helps act as a guide post for every new store entity that comes on board. While the vision of the founders may be more aspirational, how an organization plans to grow often predicates what their strategic market analysis ultimately identifies.
What Do You Want To Be? This is easier said than done. First and foremost, it has to be believable. Many brands aspire to be something they are not. If Waste Management were to claim they are the “Tiffany of waste hauling”, it would be a farfetched stretch. Secondly, it has to be practical. I once worked for an organization that did not like a certain word that was embedded in the logo of the brand. Simple enough, we will remove the word… until the estimated cost was north of $7 million since the logo was on the stores, uniforms, packaging, letterhead, etc. Great thought, impractical reality check.
Identify The Roadblocks: As mentioned above, some of the roadblocks are due to the type of growth the company expects or the capital expense to turn a vision into reality. With an acquisition growth model, the strategic market analysis should determine on a store-by-store roll up of what could be and that will determine who the company can be based on an acquisition model. When you buy others visions, there are limits on how far you can influence your brand unless you are simply buying dirt and plan to raze and re-build at an inflated capital expense.
Fantasy Vs. Realism: We all want to be best in class, but sometimes the reality is that we can’t. Either through the physical limitations or financial ones, the fact is that with a growth-oriented company, many outside factors influence “who we want to be.” If money is no object, then the issue is solved. For the other 99.9%, prudent investment is clearly the mandate in order to achieve the ROI on investments. It is time to check the ego or your pocket book will run amok.
“War Game” The Reality: Start with a list of existing stores – how similar are they? What enhancements would be required in order to get them all to the same level from a strategic market branding perspective? Is it even feasible or has growth over the years limited your ability to invest that much capital in your existing (and future) sites to align the vision? Going through this store-by-store will help identify the commonalities as well as creating a targeted strategic direction. Better to know this in advance than self-actualize halfway through your business plan.
Operationalizing Your Vision: Once a store-by-store list is completed, setting out a plan for capital investment is next on the list. This project plan must not only work for existing stores, but should also apply to new stores as they come into the fold. Store count growth can be a wonderful thing but left unmanaged when it comes to on-boarding new locations and the overall essence of your brand will quickly deteriorate. Capital investments should be made to ensure that the strategic alignment of the stores is consistent and fiscally practical.