Wisdom Without Waiting: Destination Products or Commodity Categories
© John L. Mariotti 2003
There is an opportunity in retailing of products that is going unrealized amidst the wail and cry of ever more powerful retailers. Worse yet, this missed opportunity is denying the suppliers who fail to recognize it the resources and exposure to sell their core products.
Retailers advertise and consumers shop primarily for destination products. In other words, they go to the store to buy a certain kind of solution to a need or a problem they have recognized. The companies that are most successful develop products that speak to this need (or problem), and partner with retailers to tell consumer where to find the solution-and what it is all about.
The best example of this in the past few years is the best selling electric appliance of all time: The George Foreman Lean, Mean Fat Grilling Machine. This was nothing more than an electric sandwich press, which had been around for years, slightly modified but significantly repositioned as a destination product for people who wanted to conveniently cook in a more healthy fashion.
Many of the "As seen on TV" items use on this same approach (e.g., the Pasta Pot). Fitness products have, for years, played to the desires/needs of people to buy something that would help them achieve a goal or solve a problem they had been unable to solve.
When a marketer can position a product to meet a specific, and widely shared need, the product itself does not have to be all that different-but the difference must be visible, tangible and make sense. These products become "destination products" which are worthy of advertising and promotion by retailers to drive store traffic and sales.
Conversely, there are many good, utilitarian products which are well-known and respected, but for which there is a low sense of purchase urgency. In these cases the suppliers or the retailers or both often resort to price discounting or sale pricing to create this consumer purchase urgency. The problem with this approach is that there is no bottom to the pricing, and if some discounting drives some urgency, then more deals will drive more urgency-and so forth.
The product soon becomes a price-based commodity with little or no other differentiation. Not only is this outcome devastating to sales and margins, it also earns little respect from the retailers' advertising management. In retailing, the products, which are promoted in flyers and ads-or even in store promotions-have rich opportunities. They earn a disproportionate share of inventory and open-to-buy allocation. Advertised products also have a sort of incumbent's rights on flyer space-at least the first shot at the same kind of space each year.
Thus the challenge for marketers and product developers is to search out, recognize and then play to the lifestyle-based desires, needs and (especially unfulfilled) wants of consumers. Ironically, a few consumers have already begun adapting or using the old products to meet these new needs, albeit with less than ideal results.
Searching out the desires of consumers is the key. A longer, healthier life is one large consumer motivator. Convenience and timesaving ease of use is another. Prestige or peer group approval is a third. There are many more unmet needs and unfulfilled desires. The challenge is to recognize them, play to them, and capitalize upon them.
