retail news in context, analysis with attitude

There is a terrific piece on The New Yorker website that highlights the power of small:

"Consider a few surprising and optimistic facts for the new year: nationwide, independent bookstores have grown by about twenty per cent since 2009; meanwhile, American craft breweries collectively now sell more than 16.1 million barrels of beer annually, outpacing, for the first time, Budweiser. This isn’t the only evidence that small-scale businesses are making a comeback. Over the last ten years, the long-running decline of small farms has levelled out, and more than three billion dollars was spent last year on more than four thousand independent feature films. Over all, since 1990, small businesses (with, generally, fewer than five hundred employees or less than $7.5 million in annual receipts) have added millions of employees, while big businesses have shed millions.

"None of these developments has individually transformed the American economy, but taken together they represent something."

And, the piece cites as an example an industry dear to the Content Guy's heart:

"Consider the story of craft beer. Large-scale breweries destroyed their smaller rivals in the twentieth century because they were able mass produce the stuff for cheaper (reaching wholesale prices of about fifty cents a beer or less) and because their fat margins allowed them to pay for things such as television advertising. In the late nineteenth century, there were thousands of breweries in the United States; then, Prohibition came, and, after it ended, a consolidated industry emerged. By 1979, there were just forty-four remaining. The giants had won again.

"But the small breweries came back. Their beers were not better advertised and certainly not better priced. Rather, the crafts went after an enormous blind spot for the big breweries—namely, flavor. I don’t entirely mean to be snide; more precisely, craft beer succeeded by opting not to compete directly, instead pursuing what can be called a “true differentiation” strategy. That means they established a product that, in the mind of the consumer, is markedly and undeniably different (as opposed to “false differentiation,” which is more or less the same thing with different packaging). True differentiation, if it works, actually changes consumer preferences. The dedicated craft-beer drinker, once he’s hooked, no longer cares if Coors Light costs three dollars less. Today there are once again thousands of breweries in the United States (more than 3,000, in fact)."

It can't work everywhere, or in every industry ... but it can work in a lot of places, where people of independent thought and innovative mindsets look for places where they can find a differential advantage. You can read the entire column

KC's View:
This sort of ties into the points we've tried to make above - the importance of finding points of differentiation that can appeal to customers and persuade them to change their behavior. "Independent bookstores (whose sales are actually rising) can’t beat Amazon on price or selection," the story points out, "but they can curate intensely and make the act of browsing for books an enjoyable experience that cannot be matched online."

That's what retailers - of all sizes - have to do. But my question remains ... how to make these course adjustments while still trying to win the day-to-day battle for market share, sales and profit.