Specialty retailers span many categories and come in many shapes and sizes. Building the right strategies to succeed requires an acute understanding of the consumer, a finely tuned brand proposition, and a go-to-market approach that delivers on the “specialty” attributes that distinguish the brand and retail experience.
The changing consumer purchase behavior and associated channel landscape evolution (e.g., challenging mall traffic, ecommerce share shift and Amazon’s strengthening), the changing role and influence of brands and retailers, and emerging brands and business models are making it particularly challenging for specialty retailers to find the winning recipe.
Our leaders and experts help clients design and activate strategies to address these challenges and deliver top- and bottom-line growth. We assist clients in areas such as strategic consumer segmentation and brand positioning, store portfolio configuration and productivity enhancement, concept evolution, merchandising strategy, pricing and promotions strategy, geographic expansion (domestic and international), pinpointing of overlooked and underserved growth opportunities, marketing mix evolution, M&A support, and much more.
Key questions and challenges
Our experienced professionals have a deep understanding of the opportunities and challenges facing specialty retailers. We believe management teams need to be asking themselves a number of key questions as they seek to ensure they are well-positioned to thrive in the future:
- Do we have an accurate view of the different consumer groups within our addressable market, accounting for demographic and psychographic differences and consumers’ evolving values and spending priorities? Do we have targeted strategies to ensure we are winning with the most important consumer segments?
- How do we react and adapt to the strengthening of Amazon, proliferation of brand direct-to-consumer ( DTC) strategies and other new business models (e.g., subscription services)?
- How do we build a compelling multichannel and, ultimately, omnichannel business? Are we focused on what is most important to consumers? What does this mean for investments we need to make, and how do we evolve our organization to function effectively in this new environment?
- What role, if any, should a loyalty program play in our business, and how can we get the most value from it?
- How do we ensure our store experience is a winning recipe in the marketplace?
- How can we optimize our marketing mix to acquire new customers more effectively and cost-efficiently?
- How do we better manage our store portfolio to maximize productivity?
- Should we/how do we grow outside our core markets (U.S. geographies or international)?
Examples of our work
To learn more about how we help clients create value in the specialty retail sector, please refer to these insights and case examples:
- A national home improvement retailer with a significant store base wanted to critically evaluate its strength of position, vulnerabilities and strategic options as a specialty retailer in light of growing competition from online marketplaces such as Amazon, as well as other disruptive business models in the home improvement and services sector. The client engaged L.E.K. to drive an executive- and board-level dialogue around various strategic alternatives, their likely effect and feasibility. This involved the development of a detailed fact base, analysis of the strategic implications, framing of strategic options and associated business cases, and the facilitation of an executive off-site meeting. Ultimately, our work was a catalyst in elevating various strategic imperatives to reshape the strategic agenda and take the offensive on these critical issues.
- For one of the world’s largest vertical apparel retailers, L.E.K. helped develop a strategy to dramatically accelerate growth of its ecommerce business. The result was a renewed focus on the customer experience, and a digital strategy that distinctly delivered on key needs and expectations across the entire consumer lifecycle and related points of interaction.
- L.E.K. assisted a major pet retailer in developing a new store concept. The concept was shaped to target a different purchase occasion that our client was underserving, and strengthen its overall position and share of wallet with existing customers.
- L.E.K. helps clients probe beneath the surface of shallow consumer insights and reveal hidden opportunities that provide them with the true market intelligence required to focus on the areas of highest strategic importance and growth potential. Without this level of understanding, we have seen many companies run blind strategically and pursue imperatives that fail to deliver real value. Read More
- Loyalty is a key strategic tool for acquiring, engaging and retaining customers, but our research shows that too many rewards programs are poorly conceived, resulting in initiatives that don’t meet retailers’ goals and loyalty cards that are passively exploited by consumers. We help clients create programs that generate effective customer engagement and foster long-term relationships. Read More