retail news in context, analysis with attitude

Interesting piece in Fast Company about how the retail universe may look to the airline industry for inspiration as it tries to find new ways to generate revenue and profits.

An excerpt:

"Over the past few decades, the airline industry, pressured by skyrocketing fuel prices and roiling global competition, learned that customers care about price. They learned that customers care about price so much that they are willing to switch airlines to find a ticket that is just a dollar or two cheaper.

"And, over nearly three decades, airlines became exceptionally capable of monitoring, managing, and matching the prices of their competitors–-and it happens lightning fast, hundreds of millions of times per day. There is no marketplace more fast-paced or technically advanced than that for air travel: mobile boarding passes, loyalty points for using the 'right' credit card, added costs for in-flight food or checked luggage, and ticket prices that change by the second or faster."

The lesson has been that "customers will pay extra for what they value."

Traditional retailers may need to take a page from the airlines' book, the piece suggests. Rather than competing with online retailers by offering, to varying degrees, the same products and services that they've always offered, perhaps there ought to be an effort to think about services and pricing differently - that they ought to "deal with a shopper’s lust for price-parity, and compete on a new level based on providing the features that customers value and are unique to brick-and-mortar retailers."

It is an interesting and provocative story, and you can read the whole thing here.
KC's View: