Added On: Saturday, January 19, 2008

Slouching to Commoditization

As director of national marketing for a grocer, I read with great interest the Fast Company December cover story - "The Wal-Mart You Don't Know." As you know, Wal-Mart is single-handedly responsible for the drive to commoditization that is happening in the retail business. I love what Seth Godin said in his book Purple Cow that a low price strategy is the last resort of a marketer that is out of great ideas. Commoditization is all about exploiting the low price strategy.

The impact commoditization is having on the game of business is tremendous and Wal-Mart seems to be killing nearly everyone with their quest to deliver the lowest price possible.

In my work, I approach transcending the commoditization trap by following these simple rules...

Stand for Something, Not for Everything
It's the Experience Stupid
Tell the Story. Don't Make up a Story.

Stand for Something, Not for Everything
Companies that are meaningfully unique to consumers and that focus supremely on their uniqueness are successful in the face of Wal-Mart's commoditization approach. In the grocery industry, Trader Joe's and Whole Foods Market (parden the plug) are two such companies that are meaningfully unique enough to consumers to transcend commoditization.

It's the Experience Stupid
If a company treats customers as being curious and discerning and not boring and indifferent then they will reap a reward. Taking customers on a journey is one way to deliver a great experience. Build-a-Bear Workshop and IKEA are two retailers that are masterful at deliver great store experiences.

Tell the Story. Don't Make up a Story.
When you communicate your uniqueness, do it in a way that is authentic and genuine. Dasani advertising makes up a story while HBO always tells a story.

If you are interested in learning how you can help your company transcend commoditization, check out Joe Calloway's book Becoming a Category of One: How Extraordinary Companies Transcend Commoditization and Defy Comparison. It is a worthy read.


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