Positioning Family Dollar (and others) for trouble ahead

Tom Dougherty, CEO – Stealing Share

14 October 2013

Family Dollar could have prepared for government shutdown

Last week’s remarks from Family Dollar CEO Howard Levine make sense. He said that the government shutdown is hurting those on government assistance – which make up more than half of Family Dollar’s customers. (And, logically, those of Dollar General and Dollar Tree as well.)

“Like most of the rebranding garbage out there, Belk ended up with a new logo and color palette and not much more (smells like politics to me).”

 

Family DollarThis was, of course, a plea from a businessman to stop the madness that results in fewer customers going through his chain’s doors.

What interested me was his statement later, saying, “We have repositioned the company for the tough sales environment.”

That sounds good on paper. Business must always look ahead to trends and make adjustment. But that isn’t what has happened here, at least from the point of view of the customer. The chain is still “my family. my family dollar.”

First of all, that’s not new positioning and it’s redundant. (The name already says that.) But Family Dollar must believe its positioning works in this government crisis.

Would this positioning stave off lost market share in a long-term crisis? I don’t think so, which is why I suspect Mr. Levine is worried. You must position your brand so that it is so emotionally intensive that it succeeds regardless of the nation’s economic situation.

Recently, dollar stores have increased market share because of the general economic climate, and they do share a position that is different than the retail market. But they are not emotional brands, which means they are easily discarded.

Even Apple, with its expensive products, always succeeds no matter the economic climate because its brand is emotional.

My point is that, to “reposition the company for the tough sales environment,” you should do it before that environment comes to fruition by being about something bigger than something so literal. Be about something emotional. Then you are resistant to bad economic times.

See more posts in the following related categories: Dollar General Dollar Tree Family Dollar Government shutdown

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