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Understanding The Value Gap
You may have noticed how commonplace complimentary gift wrapping has become this festive season. In years gone by this service was offered by bigger department stores or as a fundraiser for charities in local shopping centres. This year though it seems that every retailer from the bookstore to the pharmacy has decided that complimentary gift wrapping might just be a way to differentiate. If the bricks and mortar retailer can’t be more convenient or cheaper, then it stands to reason that they need to add another service layer to their offering to address the perceived value gap. But just as the scripted, ‘have a great Christmas’ greeting you’ve heard the checkout operator repeat ten times before you reach him rings hollow—when everyone uses the same low-risk value adding strategy no experience feels authentic or unique.
It would be easy for retailers to panic in the wake of Amazon’s plans to reimagine the bricks and mortar shopping experience with Amazon Go. But it’s important to understand that there are as many reasons why people shop as there are to add value. Convenience, price and even service add-ons are only part of the value story. If we’re to truly differentiate our offerings we have to dig deeper and consider the value gap we’re hoping to fill for exactly what kind of customer. The good news is that not everyone wants to grab and go. There are people who want to shop locally or sustainably, and those who care about human connection more than the lowest price. You don’t have to market to everyone, but you do need to know the someone you’re filling the value gap for and what matters to them.
Image by Bill.