In his process of reinventing the pricing model of Emelia, Augustin Rey changed a fundamental component of the retailer’s identity: their constant, significant sales. With his focus set on attracting a new, younger market, he ignored the value that Emelia’s traditional model held for their core customer base of middle-aged women. As his friend describes in the case study, the sales that Emelia was known for we a form of “recreation” for their market, who enjoyed bargain hunting and the sense of victory they felt when they found a “great” deal. He failed to validate his strategy through conversations and research conducted with current and potential customers of the store. Without learning about the true motivations and behaviors of these populations, Augustin was left to rely only on his assumptions which proved to be incorrect. Had he interviewed users as well as tested prototypes of his new pricing model, retail strategy, and campaign tone with them, he likely would have learned much sooner about the misalignment between his vision and the consumer perspective.
If I were to consult for Augustin at this stage, I would advise an immediate user and market research initiative to learn about consumer reactions to the new strategy, their fundamental needs, and how effectively new revisions to the strategy would meet these needs. This will be an essential step in identifying new opportunities for Emelia to create value for their target customer segments and test the viability of different approaches to leveraging these opportunities. As Shari Rudolph suggests in the case study, at this point, Emelia can then monopolize upon existing or newly established value differentiators that will allow them to compete with a more sustainable and profitable pricing strategy. Additionally, Augustin would benefit from a clear set of OKRs around which his team can focus their reinvention efforts and regularly monitor their progress.
