RVP: Emphasis on Experience

It is important to remember that when executing a strategy, retailers should not try to focus on all four aspects of the retail value proposition, but instead excel at one to be successful. Many businesses have shown us this: Wal-Mart in price, Avondale’s in convenience, Sephora in selection, and The NBA Store in experience. Though we have been learning about the great expansion of retail experiences all over the world, North America is no stranger to this strategy either.

The NBA Store opened almost 10 years ago in New York City. And the strategy of focusing on experience was in place even before the store was built. When designing the 35,000 square foot store, the feeling of being on the basketball court was very important. The lower level of the store houses a half-court shooting area with a full size net for anyone to come in and shoot a few hoops while shopping. The store is two stories high, but you won’t see the traditional escalator anywhere, as they have built a ramp 170 feet long designed to move you from one floor to the other. The floors are all hardwood and the same style as on a basketball court.

The layout of merchandise is not in traditional straight aisles like many retail stores (we don’t walk like Egyptians), but feels more like an exhibit, where you are walking into different sections of the store and able to see different products. It’s easy to forget where you are in the store, but the layout naturally leads you through many areas of the store. Pat Pecora showed us how customers don’t move through the whole store, and The NBA Store has found a way to change this through store layout. Their heavy focus on experience however, means that something else needs to give. Prices are very high for merchandise. I think that many of the people shopping here would be willing to pay higher prices though, mostly for the experience but also the selection. They claim to have the biggest selection of NBA and WNBA gear in the world. The niche product means that fans of the NBA would be willing to pay more for their favourite team’s garb. And, as many tourists frequent this area of New York City, they are probably willing to pay more money on discretionary items while they are away on vacation.

Merchandise is only one way that they make money, however. In fact, on their website, www.nba.com/nycstore, there is more emphasis on the events that they can put on rather than the products they are selling, including birthday parties, corporate events, fundraisers and more. These events are hosted right in the store.

Other in-store experiences round off the shopping event. People are able to compare their hand sizes with those of NBA stars, stand beside life-sized NBA players’ pictures to compare heights (I didn’t even come close), play video games and watch game highlights on a Jumbotron. If their timing is right, customers might get the chance to see one of the many celebrities (mostly sports stars) or concerts performed right in the store.

Most importantly though, is not what The NBA Store offers; it is what they understand about their business. They realize that they can charge premium prices for average products because they offer a large, exclusive collection and a very unique experience. They know that their best strategy does not mean focusing on all four aspects of the RVP, but investing in one that the target customers want.

Online Source: www.nba.com/nycstore

I suggest taking a look at the site and the virtual tours of the store.