During these challenging Covid times it is especially important to make sure you are operating your store at a profit. If you aren’t at least covering all your costs, the doors will not be able to stay open, no matter how many federal grants you were able to obtain So often we think the way to increase business, or at least maintain the business we have, is to lower prices or run some sort of sale(s). This business model absolutely works for some stores, but not for most. Does your customer want the lowest price, or does she want the best value?
What is value? According to Dictionary.com, value is “the worth of something measured in terms of the amount of other things for which it can be exchanged.” This definition doesn’t mention price at all. It refers to money, that is the medium that will be exchanged, but it doesn’t say anything about price. The lowest price is often the lowest product in perceived value.
What is the difference between price and value? One of Warren Buffett's most famous quotes (via Benjamin Graham) is, "Price is what you pay; value is what you get." This quote makes the whole thing so much easier to understand.
So how can you increase the perceived value of your products and your store brand? Rather than concentrating on prices, discounts, and comparison to your competitors, promote your service, unique merchandise, location, fun shopping experience and your connection to the community, however that looks, charity donations, team sponsorships, etc.
There is value in a product a customer can take home with them immediately. Not waiting for even a day. We are all tactile creatures. Being able to feel the material, the weight and the smell of the product has value. Stepping into a shopping environment that smells good, is well organized and has beautiful displays has value. Being taken care of in terms of hospitality, knowledge and service has great value.
Of course, price does matter, but know in your store, the lowest price isn’t creating value, it is often just a race to the bottom. And, who wants to be on the bottom? Focus on what you do better than anyone else, your store! Your entire store and the experience it gives to those who come in, who are looking for value, not just the lowest price.