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Predicting Success for Upcoming Retail Products

Instructor: Beth Hendricks

Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

Predicting your business' future success involves understanding customer need, completing competition analysis and utilizing your strengths. In this lesson, you'll learn more about predicting future success and identifying areas of threat and opportunity.

Predicting the Future

It would be pretty cool to be able to predict the future, wouldn't it? You'd know who you're going to marry, where you'll live, and what type of career you'll pursue. In business, predicting future success would also come in pretty handy. Businesses would know what products will be hottest, the type of changes that need to be made to appeal to consumers, and the best place to locate their new business.

While you can't necessarily predict who you're going to marry or what particular product is going to be the bestseller, there are way for retailers to predict future market trends if they're paying close attention to a few key areas.

Target is one example of a retailer that has nailed the ability to predict its own success. The company appeals to customers' needs for low priced but trendy merchandise. It understands how to be competitive in a world of Walmarts where low prices also exist, but quality might be compromised. And, it did it all using its internal strengths as a one-time operator of high-fashion department stores.

While you use Target's model of focusing on customer needs, assessing the competition and analyzing strengths and weaknesses to predict your own future success, keep these key areas of threat and opportunity handy.

Areas of Threat and Opportunity

A business' future success relies on an understanding of a few important areas. Let's work through those below.

Demographics

Demographics, that data that breaks down consumer audiences by things like age, gender, ethnicity and income, can be useful for predicting buying preferences and behaviors. Demographic data changes slowly (think about the difference from one generation to the next) and thinking ahead on how to crack the code of different consumer groups can help a business innovate and remain successful.

Grocery stores are looking more closely at demographic data and adjusting their sales practices accordingly in today's market. The increasing availability of free grocery pick-up and grocery delivery services speaks not only to stores' understanding of aging Baby Boomers who will have increasing difficulty getting to the store, but also to an understanding of Millennials who don't like spending time walking the aisles of a grocery store.

Experiential Consumption

Experiential consumption is all about combining retail with interactive experiences for consumers. So, instead of simply wandering store aisles and making purchases, customers can play with a tablet before buying, grab a cup of coffee or try on a new shade of lipstick. The key for retailers is to ensure they have great products that are offered in a way that allows consumers to interact with them while easily figuring out how the product solves a problem they have.

Apple has excelled in this arena with its retail stores that are a combination of customer service and hands-on product testing. Enter an Apple retail store, and you'll find dozens of people handling Apple Watches, clicking on Apple computers and testing out Apple iPads.

Non-Store Retailing

Brick-and-mortar stores are never going to go away, but they are being joined in the retail space by non-store retailing models with an outside-the-box approach. These options give retailers an opportunity to reach consumers in new ways and places, from multichannel retailing to pop-up shops. Multichannel retailing is designed to integrate all of a brand's selling channels in a way that is beneficial to every other channel, such as catalogs, email and internet. Pop-up shops are another option that helps a retailer stand out because of their unique environment and marketing buzz. When Nike wanted to debut a new pair of limited-edition LeBron James shoes, it did so with a pop-up store in a popular area of New York City.

Selling Services

The future of retail success may be in moving the focus from the product itself to the service of the product that makes consumers' lives easier. Selling services is a move away from marketing the product that consumers can use for themselves to moving the product to the background and focusing on servicing the lifestyle. Think about the myriad meal delivery services infiltrating the market today. With these, the focus is less on ''go to the grocery store'' and more on ''we've done the shopping for you.''

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