Swimming With Sharks

Over the course of the year, I attend a number of trade shows. When I do, I like to educate myself by talking to exhibitors. I recently spoke with the president of an importing company that does lot of business with specialty and gift stores. I innocently asked her: "Do you sell to the mass market?"

She looked at me with a stricken expression, and, as if by magic, seemed to grow before my eyes, squeezing each inch out of every joint, tendon, muscle and bone in her body. Quavering in a state of indignation, she retorted: "No, we absolutely do not sell to the mass market! We would never think of selling to the mass market! We are loyal to the specialty market!"

Of course I exaggerate. She didn't actually inflate like that, but she sure was up in arms. Her loyalty to specialty market customers was visible. And it is certainly admirable. But I wonder, is it wise? Is she helping her own company and her customers by not selling to the mass market?

Here's a contrarian thought: Maybe … just maybe … manufacturers could actually help themselves and their specialty customers by selling to the mass market. Maybe specialty retailers could help their cause by allying with big box competition rather than fighting against it.

When you think about it, mass merchants are a lot like sharks that swim along eating pretty much everything in their path. Along with them are some very smart companions, called pilot fish, that swim with the sharks and eat what the sharks miss.

Maybe specialty retailers can emulate those smart fish and eat rather than be eaten. By cooperating, rather than competing, they might actually build their customer base.

Such a strategy would work particularly well with products that come in various levels of complexity, quality and price. Why? Because mass market retailers are interested in a low opening price point and possibly two or three additional SKUs. Their business plan is to sell a large volume of a few items. They're not in business to satisfy the enthusiasts who want to drill down deep into a particular pastime or indulge themselves with a little well-earned luxury. That is the exclusive domain of the specialty retailer.

By using the mass merchant to make products visible to legions of shoppers, the manufacturer builds brand recognition and, potentially, new enthusiasts, who will then only be able to find the products they want at the specialty retailer.

Manufacturers can do even more. They can cross merchandise pieces with products being sold in the mass market, identifying more advanced versions of the product. They could also include a web address that offers a store locater for consumers who want to find specialty retailers with the more advanced versions. A downloadable coupon with the name of a specialty retailer in the consumer's zip code and a map of how to get there would be the icing on the cake.

However, specialty retailers don't have to wait for the manufacturers to take action. Here are some additional ways that smart, "pilot fish" retailers can take advantage of the big, mass market sharks:

• Swallow hard and offer, for a fee, to package the product the consumer just bought from the big box competitor. Hire some high school kids to do the work. In the meantime, the customer will spend time looking around the specialty store. The retailer may even want to put the product together for free if the customer spends a specific amount. How about slapping on a sticker that says, "Packaged by the elves at [your store]"?
• Use a time-delay strategy when running ads for better versions of products promoted by big competitors. Don't run them at the same time; wait a month or two. This strategy recognizes the time element in a consumer's love affair with a new hobby or enthusiasm. They'll use the entry level product for a certain period before they want to move up. By giving them a couple of months to grow to like the product, you'll catch them right when they're ready to move up to a more advanced version.
• Specialty retailers could also visit their mass market competitors and become friendly with the folks at the service desk as well as the employees in the gift or decorative accessories departments. Let them know that if they get a request for an item they don't carry, they can send the customer to a specialty store. How does that help the mass merchandiser? By making the consumer happy without sending them to a mass market competitor. That way both mass merchant and specialty retailer win.

After all, if a pilot fish and the shark can get along, specialty and mass can too.