A Strategy for the "Hybrid" Retailer
The focus of the C-tailer should be on in-home installation, not custom integration.
By Ira Friedman
Last month, I wrote about Bjorn's Audio Video in San Antonio, commenting on an article that Bjorn's owner Bjorn Dybdahl had written in the June issue about the strategic direction of his custom department. I took issue with the strategy and want to expand on this point further.
First, let's understand the nature of a pure retail business—one that does no custom at all. These companies compete by offering a wide selection of products, available in stock, at the most competitive prices. The most successful operations have the widest selection, the deepest inventory and the most competitive pricing. Think Best Buy.
Now, let's look at the nature of a pure custom business. These companies compete by offering the most comprehensive problem-solving for their clients. By using a limited number of tools, these companies engineer a system unique to each client.
Do you see the overlap between these two business models? Well, if you do, you're wrong. But hang on there, angry guy, you're reading Custom Retailer magazine—the playground of the "hybrid" retailer. So there's got to be something I'm missing, right?
Do this fun experiment. Call up 100 custom-only business owners and ask them if they have plans to enter the retail market in the near future. (Laughter.) Now call 100 retailers and ask them about the custom market. They'll say it's the most important part of their businesses. So who's making the move to "hybrid"? The retailers are, because they see the cash-and-carry aspect of their businesses evaporating.
Why don't retailers shutter their doors, sell their inventory and move to a commercial district?
There are several answers.
First, retailers have invested heavily in their storefronts, inventory, advertising campaigns and brand awareness. Closing shop would squander those assets.