You should be thinking about Whoville

Why businesses that focus on "who" they sell to will succeed

There is a little known about the community of Whoville that Theodor Geisel, (Dr. Seuss) wrote about in his stories. Starting with the mayor, Augustus Maywho, everyone residing in Whoville – starting with little Cindy Lou – is a who. Your trade area is also a Whoville with a lot of Cindy Lou Whos as residents.

This fourth generation retailer has no hobbies other than his love for observing independent retailers.  I enjoy watching and reading the stories of the Whos and Whoville. And I see a lesson that all of us can learn from.|

Only if you refuse to read newspapers and watch and listen to the news, are you unaware of the “retail apocalypse” the media has been talking about for the past couple of years.

If they were to be believed, traditional brick and mortar businesses are going away. They quote the thousands of businesses that closed last year as examples. We are to be replaced by online shopping because that is all the younger generation understands.

Before you go to the extent of considering the closing of your store, let’s take a look at some of the information behind the scene. The number of store closings is surpassed by the number of stores opening. While we expect you have seen some independent businesses closing, it pales to the number of chain stores with their mass closings.

There is, however, a need for there to be fewer stores overall. As a statistic, in 2018 there was 23.5 square feet of retail for every human in the United States. Comparatively, western Europe has approximately 3.0 square feet of retail for every human. Simply stated, we have too much retail. Figuratively speaking, retailing needs a “thinning of the herd”.

The key for each individual business owner reading this article is to not be one of those thinned. There are two keys to being not only a survivor but a business that thrives as retailing moves forward.
The first is to focus on being a better business owner; understanding your financial information; continually having an educational program so you have a staff that is exceptional; knowing how to market your business; and having a business strategy that evolves.

That is where Whoville comes into consideration. The evolution of retail also includes the evolution of manufacturing of the products for our stores. Those of us who have been in the industry for many years remember when the relationship with manufacturers, and wholesalers, was different. The partnership was stronger, and once the retailer offered a product line, the retailer could be comfortable in expecting the same items would not be sold in another store close by.

Not to put the blame on manufacturers, there is an understandable temptation when a regional or national chain store arrives. Or, better yet, there is a behemoth called the “Internet”.

Worse yet is when a manufacturer develops a secondary product line that is sold in chain stores while the original product line is in the independents. For additional information on this, go to your local library or independent bookstore and get a copy of, “The Distribution Trap”.

Finding a product line that can be exclusively yours is quite a challenge. And therein lies a major reason for the closing of many of the stores that have been around for many years; (think of Sears, Hancock and others).

When a business carries the same products as another and cannot find a way to differentiate themselves from the rest of the herd, the competition comes to one thing – lower prices. That competition only works so far because that business can cut prices only so deep and for so long.

The problem? It is within the “what” of their product offering. Focusing on “what” we sell may have worked for decades, but that time has past because of the lack of exclusivity and too many retailers.

Focusing on what you sell frequently occurs with independent retailers because of what the owner likes and knows about. The advantage of “what” an independent offers as superior product knowledge, a good line of products and love for the products is also the disadvantage of that retailer because the focus is “what” the retailer is selling.

This “what” can go further as a problem when you visit the independent store and see a collection of manufacturer displays and racks. The look of an independent is gone and all you see is a series of name brands. As the manufacturer advertises their name and product line, it makes it easy for the consumer to look in one store after another to find “what” they are wanting to purchase. As an independent this puts you at a disadvantage.

As an example, look at convenient stores and liquor stores. Their windows are cluttered with signage that is provided by vendors. Inside the store, the soft drink vendors have their unique displays as do the vendors for donuts and many other products. Once inside the store, there is no unique identity to the business. Your store should not be the same way.

There is also a lesson we can learn from the banking industry. Banks have a challenge because they all have the same product – money. People change banks because of convenience, change of employment, recommendations by friends, and poor customer service.

We read a report that when a customer goes to a bank and opens an account there is a 90% chance they are going to leave that bank (take their business elsewhere) because of one of the many reasons we described. An additional reason is that it is so easy to change to another bank when you have only one reason to do business with them.

Over the years because of the lobbying and changes in laws, banks now offer many “products”. They include checking accounts, savings accounts, certificates of deposit, direct deposits, safe deposit boxes, auto loans, mortgages, home equity loans, and in many states, various forms of financial services and insurances.

That same report goes on to explain that when a customer has “purchased” five or more of the products a bank offers, there is a 90% chance they will not leave that bank.

The most obvious reason is the bank is so well connected with the customer that it is challenging, and time consuming for the customer to move all their business somewhere else. The southeast United States has a bank that has learned this lesson and used it to their advantage. They offer a service to their customers that will take care of moving all the business from a competing bank to their bank. If that customer is Cindy Lou Who, all she has to do is visit one of their branches and sign the necessary authorization forms.

The banks, and this one particularly, learned what it takes to keep their customers and gain new ones starting with Cindy Lou and all the other Whos in Whoville.

There is a lesson here for all of us as retailers from Cindy Lou and the banks.

We are challenged in seeing our market territory shrink because of the Internet, chain stores and loss of uniqueness of products. What is not shrinking and is actually increasing, is the number of customers in our Whoville.

The population of the US was 226 million in 1980. Two years ago the population was 327 representing an increase of just under one third. There are plenty of customers if the retailer knows how to have the correct focus.

What if your business were to look at the opportunity of growing your business by focusing on the “who” instead of the “what”? How would you do that?

Let’s discuss the opportunity by thinking about your customers. They are not all the same but consider your customers by what they like and do. Not just a similarity in they like to sew.

Think about your own personal experiences. Imagine your shopping for a dress. Perhaps there are three stores that you visit as you make your selection. You shop at all three because you want to have just the right dress.

One store begins to adopt this strategy by noticing what they have seen you wearing when you shop in their store. They have noticed you enjoy jewelry and have worn several pieces of Pandora. You have also been seen wearing Brighton while shopping in their store, and in your trips to their store have carried various Vera Bradley bags. To top it off, they have complimented you on your shoes for which you have stated how you enjoy a variety casual, work and dress shoes.

Now this dress shop has added these product lines and other lines that are similar in quality and price. The next time you go shopping, which of the three stores are you most likely to shop first?

We have taken an informal survey since first reading the report of the banking industry. Our survey has shown the overwhelming majority of respondents telling us they would choose the store that has more of the products they would consider purchasing.

As an example, in our small community we have a business that has utilized this strategy to grow a very unique business. This business started with power equipment that was for professional lawn maintenance people. As they carried product lines that also had homeowner models, they added this to their product mix. Selling products that would require preventive maintenance and repairs means having a service department is a natural.

Compared to many other businesses, their service department takes care of items they do not sell as well as what they have sold. They studied their customer to find their customers were active outdoor people. This allowed their expansion to go to many areas; quality bicycles, kayaks, supplies for hiking and camping including boots, firearms and supplies for target shooting and hunting. When the two closest communities created disc golf courses, the supplies for this sport was the next addition.

If you were to walk into that business you would have a challenging time describing the store because it likely is unlike any other business you have seen. It could be a bike shop or it could be a power equipment store. Outdoors people think it is their store as do firearms enthusiasts.

However, for the community, and most importantly for their customers, this business is exactly what the business should look like because the business is focused on the Cindy Who and all the Whos in their Whoville.

A few hours drive away is a store whose main focus is knitting supplies. However the owner of the store began to notice the daughters of customers carrying a unique style of backpacks. The backpacks were added to the product offering. And because of the location and primarily female customers, a unique jewelry line was added which is kept in the customer’s freezer so it provides cooling comfort while being attractive on a hot summer day.

Cindy Lou Who lives in your Whoville. Is she buying her sewing machine elsewhere? If she sews does she also knit? Does she have daughters shopping with her? Can you sell to Cindy Lou’s daughter?
Is your Cindy Lou Who married to Charles Louis Who? If you have men as customers, a line of wallets, pocket knives and key chains could be the right addition. A unique line of barware is not out of the question.
There are already enough stores advertising they have the largest selection of fabrics as well as any other category of products you already have. This is not the way to be unique.

As the residents of your Whoville change, your product offering will change. Those of you who will experiment multiple times with this idea are sure to find some of your additions are not going to work. You will have to clear out the remaining merchandise at discounted prices because you were unsuccessful with this idea.

Granted this is a minus, but it is not like it will be the first time you have discounted something to get rid of it. However, giving up on one of these ideas is not an expensive situation as this new product category was only a compliment to your overall product selection.

Whoville is a wonderful place to grow your business. We have all tried selling based on “What” already.

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