Augustín did not validate his new strategy with customers. He came up with a new retail strategy and marketing campaign without conducting user research first. He designed a concept that did not serve current Emilia customers and that was tailored to a younger generation. He made two assumptions:
- Old customers will continue to buy even without discounts and sales
- Younger customers like the remodeling and will substitute old customers
Even though younger customers might be interested in the new store design and marketing strategy, Emilia must find a way to transition from their old customer base to the new customers before taking risks on unvalidated assumptions. Understanding and asking customers is key!
If Augustín had first validated the new strategy with both the traditional Emilia customer and the new, younger customer through focus groups or user interviews, he would have probably found out very quickly that the current customer base is not fond of stable prices but enjoys the bargaining process and that younger customers are very focused on online shopping. An idea could have been to remodel just one store to see the customer response. If the response was good over several months, Emilia could have gradually introduced the concept to more retail locations.
If I were to advice Augustín in the current situation, I would suggest caving and bringing back discounts. I would stop the current marketing campaign to limit the harm of it on the current loyal customer base and the brand image. In dialing back the aggressiveness of the new strategy, I would hope that the vision for the future of Emilia can still become reality over time, but that asking customers should really be a key component in whatever next steps! I would however not fully revert the effort of the new strategy but start by offering a seasonal sale for the holiday season to give customers the sentiment that Emilia is still the brand they know and value.
