Pricing Strategy Inspiration: How a Little Retail Store Can Charge High Prices and Thrive Against the Big Guys
Recently I was at a business breakfast meeting and heard a very interesting “insider’s perspective” on pricing that I thought I’d share with you. The speaker at the breakfast was a successful entrepreneur who’s owned a small landmark store in Ann Arbor for over 20 years.
The store itself sells gardening/ home wares and has developed a kind of multi-generational cult-following over the years. Most notable, however has been its ability to thrive and grow despite being surrounded by all the big box stores offering very similar things at far lower prices.
I first stumbled across the store not long after moving here. I was late for a hair appointment and hurriedly squeezed my SUV into the last remaining parking spot. As I got out of my car the store’s huge windows and meticulously designed outdoor displays caught my eye.
It was winter – a time when most garden nurseries close or wind back on their operations.
Not this store.
Huge handmade wreaths. Ornately decorated Christmas trees. An old wooden sled hanging off the rafters (the kind you could just imagine your grandpa taking your grandma for a hair raising ride in when they were kids).
When I stepped inside it felt almost like stepping into the 1950s.
Hand crafted Christmas ornaments hung alongside radio flyer bikes with red tassels dangling from the handlebars. The latest kitchen gadgetry was expertly positioned against brightly colored hand painted dishware. Over on the right, a coat rack displayed an array of trapper fur hats and hand knitted scarves. The smell of freshly brewed espresso wafted through the aisles. Their tabby cat prowled the aisles like he owned the joint, allowing a lucky few to pet him (if he felt like it).
And the place was buzzing with customers.
Back at the breakfast meeting, the owner took to the podium.
“We’re not trying to compete with the big box stores, because we realized we can’t. What we’ve done instead is establish a sense of community with our store – parents bring their children, grandparents bring their grandkids. It’s become a kind of ‘locals hang out’ and that’s a strategy that has served us very well over the years.”
He is, of course, being humble.
What he didn’t tell us is that his staff knows practically every customer by name (and if you’re a first-timer expect to be asked at least 3 times). He’s also taken great pains to train his team on every product they carry.
In other words, their marketing message is never “we’re the cheapest so come buy from us.” If it were, this store would have been out of business years ago.
Instead it’s all about the “experience” of shopping there.
They make it easy to buy – not hard. They don’t overwhelm you with choices.
And their marketing “looks and feels different” from any other garden store – setting the tone for the experience right from the get-go.
The ability to charge high prices – perhaps the highest prices in your market, is the holy grail of marketing.
When consulting with a new client, I often find that raising prices and repositioning a business are the biggest opportunities for them to make more money.
I’m quite certain it is in yours too.
