As we’ve discussed in class, it is critical to test our assumptions before building a fully-fledged product or even a minimum viable product. If we build a product based on faulty assumptions, then we waste time, effort, and money as Emilia did. Augustin has good intentions with trying new tactics and appealing to different customers, however, he needs to experiment as Yashodhard Shroff mentions. Emilia did “endlessly discount,” but a drastic, untested change was not the solution. Instead of getting rid of discounts, they could have tried introducing a premium line, taking discounts off certain products, or offering discounts at certain times, etc. Instead of completely discarding what has, somewhat, worked for years, they should have taken incremental steps to innovate. If testing was done, Augustin would have better understood what value Emilia provides its core customer base and how to capitalize on that in a new way rather than cannibalizing all of the existing business.
I would recommend that Augustin begin leaning away from the steep discounts that has defined Emilia for much of its existence. They should keep in mind, strongly, that their customers value affordability, but try to add some extra value on top of that as a differentiator. Shari Rudolph mentions they could try bundling key items to get customers in the door. They could also use loss-leading items to entice customers and have other products for them to browse. Emilia should also continue to rely on the loyalty of their existing customers. Are there ways for customers to feel strongly about the value Emilia delivers? Perhaps introducing loyalty programs or other incentives could help retain and keep long term customers happy. By making customers themselves feel valued and adding a sense of “premiumness” or exclusivity to some products, customers have an additional incentive to shop at Emilia!
