The Profit Of The Path Less Traveled

Last month, a vendor was hawking one of those mall kiosk clothing-measuring systems that uses millimeter radio waves to take hundreds of thousands of measurements to deliver the perfect clothing fit. A company representative started pushing a columnist from a major Philadelphia newspaper to try the machine and write about it. As you can guess, this test didn't go well.

The columnist took the vendor up on its offer and tried the machine, working with company owners. At the end of the process, the machine is supposed to cough up a list of jeans that will fit that consumer perfectly and where to get them. In this case, though, the machine found zero. Zilch. But this is not merely a case of a vendor proudly doing a demo before the technology is ready. It's the latest example of a vendor focusing on the majority of consumers, when the gold actually lies in the minority.

The problem with the rollout of the MyBestFit kiosk at the King Of Prussia Mall in Pennsylvania was that the columnist was not a common size. Given that the kiosk was introduced only with apparel suppliers that focus on the most popular sizes, it didn't work.

Behind this problem is a deliciously non-intuitive retail truth. The kneejerk reaction of most business managers is to stock and otherwise prepare for the most popular of whatever is being hawked. But with technology offerings such as these kiosks—and many other advanced retail systems—the pot of gold lies in pursuing the opposite.

In the columnist and the kiosk episode, her attraction to the machine was precisely because she had difficulty finding jeans that fit properly. Unfortunately, the vendor designed its system for people with the most common measurements. In short, those are the people who will have little interest in such a system. If they can walk into most clothing stores and get a perfect fit off the shelf, why hassle with the kiosk?

This concept certainly doesn't only apply to kiosks. An ideal Web example would be search engines specializing in finding local inventory at brick-and-mortars. The idea behind these engines is wonderful. But this kiosk vendor tried to make life simple by initially focusing on SKUs that are common and easy to find and match.That approach, however, is the polar opposite of what needs to be done. No one needs help finding a best-selling book or envisioning the closest retailer that will sell them a truck. No, the power of specialized search engines is in finding things that are out there but hard to find. Recently, for example, my family tasked me with finding a judge's gavel. A week before that, it was a hanger for an autumn wreath. I just know there are places within 10 minutes of our home that sell both items, but I have no idea who they are. And such search engines routinely fail at these tasks.

This is a lesson Wal-Mart taught to the rest of retail when it launched many of its first stores in a rural communities, places no national chain would go and where those national chains knew there was no money to be made. (Historical note: Those chains were wrong. Wal-Mart was right.)

Anticipate resistance: Yes, of course, it is much harder to create systems that are designed to satisfy relatively rare requests. But that's where the power is. It's how you create a need that—for a while—only you can satisfy.

This is a recurring problem with retailers, which seem to need to be dragged into creating the kind of value-add that delivers true and lasting loyalty. Consider the recent problems suffered by Microsoft as it tried to get retailers to trial some of the more daring (OK, intrusive) aspects of its Tag barcode system.

A handful of chains tried Tag, but none wanted to experiment with anything outside the safe area where everyone else was. The value, though, is in experimenting with functionality no one else has. You want to watch your rivals in your rear-view mirror? Then you can't parallel them.

Offer functionality—and sizes, colors, flavors and models—that your rivals have, and you've pushed yourself into a lowest price death spiral. But add to that mix the less-traveled variants, and you become the favorite store of the few. And those few will buy more and bring their friends.

It's not an easy model to argue for, but it didn't seem to work that poorly for Wal-Mart.