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Core Elements of Positioning Strategy
Successful retailers differentiate themselves by delivering on four core variables:

©2006 Retail Forward, Inc.

• Core Customer
• Core Merchandise
• Core Competition
• Key Appeals

Their strategic messages are reinforced with merchandising, pricing, advertising/marketing, customer service, and physical facilities.

Core Customers are those you target to drive into your door. Expertly targeting core customers are Aeropostale and Escape.

Aeropostale wants tweens and teens more than other retailers do, so they evaluated this demographic and gave them what they want: high-quality, low-price active wear and fashion basics. This also appeals to a secondary core segment, parents who prefer not to spend much on clothing for growing kids. Further appeal for core customers: savvy marketing promotions to win college scholarships.

Escape, a new concept by Best Buy, targets 18- to 39-year-old male video gamers. The Chicago test market location addresses the needs of "technosexuals" with a residential-lounge environment designed to induce lingering, cutting-edge technologies highlighted by exclusive Japanese products, skyboxes for gamers (merchandised to be rented out for parties), and a value-oriented subscription for a year of game time.

Core Merchandise comprises the products you stand for, the wares that drive customers into your door. Retailers whose core merchandise sets them apart include PacSun and West Elm.

In an apparel market overflowing with players, PacSun (aka Pacific Sunwear) has become a leader by honing in on beach and surf lifestyle clothing. PacSun “owns” this narrow category, pulling consumers in with private-label, trendy, and unique brands. Every stitch of apparel in the store reinforces the defined merchandise segment.

Part of the Williams-Sonoma brand, West Elm stands out in the competitive home furnishings marketplace. Rather than aiming to be a one-stop shop for every imaginable style perspective as others in the category, West Elm focuses on a modern aesthetic for the masses and offers pricing that won’t break the bank. It supports this perspective of merchandise throughout the store environment. The Chelsea West Elm is the highest-grossing store in the Williams-Sonoma portfolio, and West Elm is expected to become the company's top brand.

Core Competition comprises retailers from whom you will steal market share. Since the pie is relatively stagnant, retailers must steal market share to attain a larger piece of the pie, so you must identify vulnerable businesses and develop attack strategies. Tractor Supply Co. and Whole Foods Market have excelled at such strategies.

With some 600 stores, Tractor Supply sells equestrian items, hardware, farm and ranch equipment, and other must-haves for recreational farmers and ranchers, going up against Wal-Mart, The Home Depot, Lowe’s, western wear outlets, and other specialty retailers without a hitch. Through focused merchandise offerings, in-store merchandising, and branding efforts such as Out Here magazine, Tractor Supply communicates an understanding of what its core customers need.

With independents constantly dropping out and Wal-Mart dominating the big-box category, Whole Foods Market became a player in the highly charged supermarket arena by bringing natural and organic foods into the mainstream. The stores' strong home meal replacement component draws lots of traffic at lunch and dinner hours. Whole Foods stock is now a sizzling commodity.

Key Appeals are attributes you can "own." They influence your core consumer to shop with you versus the competition. Retailers with outstanding key appeals include Guitar Center and Anthropologie.

In addition to guitars, Guitar Center carries an array of instruments for beginners and professionals along with accessories, software, and equipment. While massive selection at competitive pricing is integral, Guitar Center also romances the musical community through educational clinics, demos, and community involvement. The result: soaring same-store sales comps.

Anthropologie, not unlike its parent Urban Outfitters, is all about the shopping process. The store charms its urban-minded Gen X women with a discovery experience. Every corner brings something new. Eclectic mélanges of home furnishings, apparel, and accessories meld in settings that provoke desire based on the presentation of non-commodity merchandise.

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