REAL ESTATE

The Value Matrix

BY Jeff Green

At a time of year when much of the retail news we hear focuses on receipts and holiday sales performance, I can’t help thinking that the notion of value has become synonymous with price — and only price. You can make the argument that price has nearly hijacked the whole definition of value. Why is that, exactly? Should retailers be paying closer and more systematic attention to how they articulate (and how customers perceive) the value of their brand?

From my perspective, there are six key factors in the value equation. Actually, I see it as less of a straight-line equation and more of a “matrix”, with different retailers occupying their own strategic space based on their individual combination of strengths. While price is undeniably a big factor, there is also selection, quality, service, and convenience, as well as a category I refer to as “social consciousness”, which encompasses everything from environmental responsibility and charitable giving, to how you treat your employees.

Once we start thinking about retail value in these concrete terms, it’s not hard to see where certain chains fit in. Wal-Mart, Target, Costco, and many on-line retailers are known for their low prices; selection is a traditional strength of “category killers” like Dicks Sporting Goods and Best Buy; quality is the obvious selling point of luxury brands like Tiffany & Co. and Saks Fifth Avenue; Nordstrom has long taken pride in its high level of service; and convenience, while largely a location-specific trait, is definitely a plus for traditional supermarkets, fast food restaurants and pharmacies. Social responsibility, meanwhile, represents value for locally sourced operators such as Chipotle, stores specializing in natural products, such as Whole Foods, and local independents.

Many retailers boast more than one of these factors, of course, but, in the same way that certain key value metrics can help pin down a particular brand, this perspective clarifies what they are not. It’s not an especially controversial observation to point out that while Nordstrom does service quite well (and perhaps quality and selection), price and convenience are not traditional brand selling points. The lines, though, are not always black and white. Is Wal-Mart a socially conscious operator for its forward-thinking sustainability initiatives? Or is it seen as a pariah for maintaining a low wage scale with skimpy benefits package for its employees?

This all leads to the fundamental question: What can retailers do with this framework? At its most basic level, it’s about branding. Ultimately, who you are as a brand rests on how you express value to consumers — and where you fall on the value matrix is a huge part of your brand. But I also think that viewing the success, failure, and evolution of different brands though this more nuanced and expansive definition of value sheds some light on why some retailers have thrived, others have failed, and why evolving as a brand and changing consumer perceptions can be such a challenge.

The failure of some brands can be tied to a lack of any defining niche on the value matrix (K-Mart hasn’t recently excelled in any one specific area, for example). When you are not clear about where you fall on the matrix, you risk confusing the customer. I worry that Sears is one prominent brand suffering from an inability to define itself on the value matrix. That same issue of consumer uncertainty also makes it tough to change, and a real challenge to re-establish yourself at a different place on the matrix — as J.C. Penney is discovering. While J.C. Penney is incorporating more trend-forward brands (Sephora, Buffalo Jeans, Mango) and has undergone a comprehensive reworking of its brand identity, the future is still far from certain. Change can happen, of course, but it often takes time. Macy’s, for example, has gradually shifted from a quality proposition to a place on the matrix where it is known more for its great deals and wide selection. Change can also be more of an organic process (as in the case of Starbucks, where the brand is no longer defined quite so much by quality as by convenience).

So, while price will always be part of the equation, I believe it’s critical for brands to not let dollar signs overshadow other essential value components. Successful brands look beyond price to focus on the areas of the matrix where they connect with their target customers. Consumer behavior and customer loyalties make it clear that successful branding is about specializing: One size clearly does not fit all.

We’d love to hear your thoughts through a comment below or you can contact me directly at [email protected].


Click here for past columns by Jeff Green.

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REAL ESTATE

Dollar Tree to expand distribution center

BY CSA STAFF

CHESAPEAKE, Va. — Dollar Tree has announced that it intends to expand its distribution center in Marietta, Oak., by an additional 400,000 sq. ft. More than 100 full time positions will be created as a result of the expansion.

The facility in Marietta opened in 2003 and is currently 603,000 sq. ft. This facility supplies products to stores across eleven states, including all of Oklahoma, Kansas, Colorado, New Mexico and Texas, and portions of Louisiana, Arkansas, Missouri, Nebraska, South Dakota, Wyoming and Montana.

Construction on the expansion is scheduled to start in February 2013 and should be completed in the autumn of 2013. The total cost of the expansion is expected to be approximately $25 million, financed by Dollar Tree using available cash.

“Dollar Tree has grown steadily for 26 years,” said Bob Sasser, president and CEO of Dollar Tree, Inc. "The expansion of our Marietta Distribution Center is consistent with our long-standing practice of building infrastructure to support future growth of our business. The additional capacity will allow Dollar Tree to continue to expand its reach and provide more value to more customers throughout the region.”

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N.Smith says:
Mar-13-2013 09:21 am

The expansion will surely improve their way of serving the customers to excellence, and will also creates more job opportunities. - Scott Sohr

N.Smith says:
Mar-13-2013 09:21 am

The expansion will surely improve their way of serving the customers to excellence, and will also creates more job opportunities. - Scott Sohr

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REAL ESTATE

Outlet Shoppes at Atlanta will open earlier than expected

BY Katherine Boccaccio

Atlanta — CBL & Associates Properties and Horizon Group Properties announced that their jointly owned Outlet Shoppes at Atlanta will open one month earlier than previously announced – or on July 18, 2013.

Located in the North Atlanta suburb of Woodstock, Ga., the 370,000-sq.-ft. initial phase of the center will feature such designer outlet names as Nike, Saks Fifth Avenue OFF 5TH, Bose, Brooks Brothers, Columbia Sportswear, Cole Haan, White House | Black Market, Guess, Fossil, Michael Kors, Under Armour, and Talbots. Thirty new stores were announced just announced, including Aeropostale, Charley’s Steakery, Charlotte Russe, Claire’s, Gymboree, Jos. A. Bank, Lucky Brand, Sunglass Hut and Zumiez.

“Strong tenant demand, ongoing support from the City of Woodstock officials and the speed of the construction permit the accelerated opening date of the center,” said Gary J. Skoien, Horizon’s president and CEO.

“The sustained demand we are receiving from retailers interested in joining in The Outlet Shoppes at Atlanta demonstrates the tremendous strength of the project,” added Michael Lebovitz, executive VP – development & administration for CBL & Associates Properties.

The center’s site can accommodate an additional 30,000 sq. ft. of outlet shops and also features seven out-lots for restaurants, service business and other retail uses.

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duyentran607 says:
Apr-10-2013 07:56 pm

Strong tenant demand, ongoing support from the City of Woodstock officials and the speed of the construction permit the accelerated opening date of the center,” said Gary J. Skoien, Horizon’s president and CEO.dr oz recommended green coffee

P.Lopez says:
Apr-10-2013 07:52 pm

Thirty new stores were announced just announced, including Aeropostale, Charley's Steakery, Charlotte Russe, Claire's, Gymboree, Jos. A. Bank, Lucky Brand, Sunglass Hut and Zumiez. Chatrandom.com

P.Lopez says:
Apr-10-2013 07:52 pm

Thirty new stores were announced just announced, including Aeropostale, Charley's Steakery, Charlotte Russe, Claire's, Gymboree, Jos. A. Bank, Lucky Brand, Sunglass Hut and Zumiez. Chatrandom.com

J.Jaak says:
Apr-04-2013 12:36 pm

Astounding and tolerable post. I discovered this much useful, with reference to what I was precisely scanning for. Much obliged concerning such post and please keep it like a champ. Malachy

J.Jaak says:
Apr-04-2013 12:36 pm

Astounding and tolerable post. I discovered this much useful, with reference to what I was precisely scanning for. Much obliged concerning such post and please keep it like a champ. Malachy

lahmphil29 says:
Mar-30-2013 05:26 pm

Located in the North Atlanta suburb of Woodstock, Ga., the 370,000-sq.-ft. initial phase of the center will feature such designer outlet names as Nike, Saks Fifth Avenue OFF 5TH, Bose, Brooks Brothers, Columbia Sportswear, Cole Haan, White House | Black Market, Guess, Fossil, Michael Kors, Under Armour, and Talbots. Thirty new stores were announced just announced, including Aeropostale, Charley's Steakery, Charlotte Russe, Claire's, Gymboree, Jos. A. Bank, Lucky Brand, Sunglass Hut and Zumiez. “Strong tenant demand, ongoing support from the City of Woodstock officials and the speed of the construction permit the accelerated opening date of the center,” said Gary J. Skoien, Horizon’s president and CEO. “The sustained dema Florida accountant

J.Marson says:
Mar-13-2013 09:53 am

Imagine how bad the traffic is going to start getting on I-575! I live off exit 8 in Townes Lake. I am so scared of what the next Christmas shopping season is going to bring to our neck of the woods! UGH! Latest Breaking News

J.Marson says:
Mar-13-2013 09:53 am

Imagine how bad the traffic is going to start getting on I-575! I live off exit 8 in Townes Lake. I am so scared of what the next Christmas shopping season is going to bring to our neck of the woods! UGH! Latest Breaking News

lahmphil29 says:
Mar-06-2013 05:05 pm

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