How to Add Value to Accessories
I recently ate lunch with executives from a number of retailers, including ABC Appliance, BrandsMart USA, the NATM Group, Nebraska Furniture Mart, OneCall and the PRO Group. The conversation focused on how to compete in an economy where consumers shop price on their phone even for a $20 item.
Young consumers prefer Amazon to the in-store experience; Wal-Mart and Target have succeeded in merchandising and selling an expanded selection of core CE products and accessories at low margins; and consumers are looking for retail experiences that rival the Apple Store.
We then talked about what consumers want—VALUE—and what that means today. Traditionally, we define value as the benefits and features that a consumer receives for a product based on the price they pay for it. Increasingly, value is a matter of offering more features for the same price or keeping the feature set the same while lowering the price. While these both are great offers for the consumer, they result in lower margins for the retailer.