Brands and companies mostly focus on the designing, production and sending out remarkable products to the market that are capable of engaging their respective demographics. On the contrary, retailers mostly concentrate on optimizing their brand diversity, demand generation and inventory quantities that drastically enhance the product fit for a particular retail location or property.
Retail brands should now give up traditional one-dimensional merchant roles in favor of multi-dimensional identities. Retail is extremely operational focused, which makes brand thinking and management difficult. But when a company sets it right, the brand becomes a value creation tool.
Small retailers can exploit stand still markets created by the big retailers by understanding exactly what customers are looking for and quickly producing a product or service to serve them. This is what Warby Parker, an eyewear industry did when they started. They found out the eyewear industry is dominated by a single company, which keeps prices artificially high while gaining huge profits from consumers who have no other options.
Warby Parker was started as an alternative. They produced better looking eyewear at less than half the ongoing price. What is noteworthy about this strategy is that the focus is on additional revenues generated and not the profits. They are in for market share, not profitability.
Similarly in 2011, Mark Burton highlighted Hershey’s victory over Nestle in Krackle vs. Crunch war. Using an aggressive pricing strategy that is 30% trade discount on Krackle, Hershey increased its revenue by $25 million. Another fine example is Chobani Inc., a yoghurt making company. Ulukaya turned this $1 million Small Business Association loan into a company with $1 billion in annual revenue in 5 years. Today Chobani is America’s #1 Greek Yogurt and controls 47% of the US Greek Yogurt market with more than twice the market share of the Number 2 brand.
Focusing on brands rather than profits could be a viable idea for small brands.