There seem to be escalating competition in the specialty retail business industry. Apparently this can be attributed to the lucrativeness of the industry and the ease with which people can enter the market. Additionally, there are other factors ranging from creativity, innovativeness and availability of resources which could either hamper or promote growth of companies in the specialty retail industry. Specifically focusing on Williams-Sonoma Company abbreviated as WSM, the company which was founded in 1956 has gone through much economic shake out and competitions which have made it stronger. In addition the company has been on the forefront in investing in research and development of not only new products but also new brands, catalogues, marketing strategies and sales channels (Belleflamme & Martin, 2010). Among the most common competitive strategies have been cost cutting strategies and product differentiation which has been exhibited through investment in wide ranging household products so as to reach out to more customers and market segments. Again the company has extensively invested in leasing of office spaces as compared to purchasing buildings which could be expensive in the short run.
In addition to market segmentation strategy which has enabled Williams-Sonoma to reach out to many customers in 42 countries, the company has established its supply chain in such a way that it is diverse and devoid of possible inconveniences that could possibly be experienced by a company depending on one customer thus it’s management of the supply chain is the biggest strength. Therefore despite the increasing competition from competitors such as Crate & Barrel, Restoration Hardware, Pier 1 Imports, and Bombay Company, Door Store, Rolling Pin Kitchen Emporium, Home Elements, and Expressions, experienced management and the diversification growth strategy that was institutionalized into William-Sonoma’s culture will help it attain sustainable growth and higher profitability margins in the coming five years (Brenda, 2010).
As a potential CEO of William-Sonoma, I would recommend the implementation of soft selling strategy. The soft selling strategy is supported with the realization that increased globalization and liberalization of international markets among specialty retailers, suppliers and service provider’s demands establishment of personal relationships with customers. Unlike traditional forms of marketing, modern marketing has been revolutionized to embrace two major philosophies; the transaction approach and relationship approach to marketing (James, 2007). Transactional approach to marketing can be defined as a form of promotion where the marketer is focused on attracting customers for the sole purpose of purchasing their product while relationship marketing describes a situation where a marketer develops a personal and interactive relationship with the customer after making a sale. Whereas the former philosophy is more focused on making a single sell for a given products, the latter is aimed at ensuring that loyal customers are kept for future transactions. The soft selling strategy falls under relationship marketing relationship where selling is aimed at promoting repeated interactions with customers so as to induce them into making repeat sales. In order to foster the soft selling strategies, William-Sonoma would further embrace niching strategies. This is whereby a company focuses on specific sections of the market with certain product lines.
All of William-Sonoma’s competitors use broad product differentiation strategies to attract desirable customers for their multiple lines of products. From the case study, most companies in the specialty retail business industry have diversified their activities thus embracing product differentiation strategies. For instance local, national and regional competitors such as Crate & Barrel, Restoration Hardware, Pier 1 Imports, and Bombay Company are using the differentiation strategies like those used by Williams-Sonoma. The areas of broad product differentiation include investment in specialty retail stores, mail-order catalogs, and Internet web sites which have enabled companies in the industry to effectively compete against other retail stores, other mail-order catalogs, and other e-commerce web sites that market similar lines of merchandise (James, 2007). Moreover competing companies in the specialty retail industry use best cost provider strategy. This strategy involves companies giving the customers quality products at the most affordable prices. The main aim of such a competitive strategy is to attain a higher customer satisfaction rating so as to attract more customers by word of mouth as compared to competitors. In addition given the nature of specialty goods, customers are more appeased with unique products since each and every customers wants to have a product that is unique but equally superior to that of the other buyer. For example Crate & Barrel have endeavored in getting beautiful furniture and unique home décor from smaller, out-of-the way factories that make beautiful products that consumers can afford. Broad differentiation strategy is the better of the two competitive strategies used by companies in the specialty retail industry.
Williams-Sonoma is currently using the internet to promote its products and reach out to both customers and suppliers thus making it more of a distribution channel but in the near future the company could invest in personalizing its websites to provide avenues that promote online selling as well (Sandhusen, 2008). This strategy could be fueled by the continued use of social media because modern marketing is now a notch higher as compared to the last decade when social media had not taken a Centre-stage. As a result, several industries are faced with dynamic factors ensuing from the use of social media and the most affected is the specialty retail industry. To begin with, marketing is a deliberate process undertaken by a firm to increase its publicity and product visibility thus incorporating social media into the definition gives the description of social media marketing a more specific meaning. Social media marketing hence represents the process of increasing traffic for an organizations website by use of social networking sites such as Facebook, Twitter, YouTube, LinkedIn, Pinterest, Google + and YouTube among others. Apparently the use of social media and company based websites in addition to online selling could help attract more traffic to Williams-Sonoma’s web pages which then will facilitates sharing of the company’s links on social networks.
Belleflamme, P & Martin, P. (2010). Industrial Organization: Markets and Strategies. Cambridge: Cambridge University Press.
Brenda, K. (2010). Crystallizing knowledge of historical Company performance into interactive landscapes. New York: Wiles Press.
James, S. (2007). The Business Communication Casebook: A Notre Dame Collection. (2nd Ed). Cengage. United States.
Sandhusen, R. (2008). Chapter 6: Organizational markets and buyer behavior, Rohan, UK
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