I have in mind retail stores at the moment, but it seems like this is a basic question with no great answer. We should have an answer, though.
In New York City, these stores are Fairway Market, B&H Photo, Jack Rabbit Sports. Abt Electronics and Appliances, in Glenview, outside Chicago, is the same way. I swear, I’ve ordered a microwave from Abt while I lived in New York, because it was cheaper than buying one here.
What’s remarkable about these stores is that they are not super-high end or in industries where there is lots of Blue Ocean. Grocery, electronics, sporting goods, appliances. These are businesses competing with bigger stores, mom & pop stores, the internet. And they are better in every way. They are more knowledgeable, more appealing to shop in, more efficient, and price competitive.
I went to B&H to buy a camcorder, pre-Christmas, and here’s what you get: a slew of people enter the store, and they are directed to a specific area where your particular products are on display. Branching, and winnowing, until you are in front of a kiosk with dozens of camcorders. 5-6 experts are there, not to sell anything, but simply there to be experts and tell you about the various camcorders. Virtually no wait to speak to an expert.
Once you choose one, they send you to a desk around the edge of that area. There a salesman will help you with any additional peripherals you might want. So far, you haven’t held a box at all. Sometimes you might bring a camera bag or tripod to the desk, but mostly they just want the item number/description. Then, magically, a bin arrives under the desk with all of the things you’ve just ordered. Honestly, it’s like they have Oompa Loompa’s working there. You confirm your items, then the salesperson prints out a receipt.
Still carrying nothing, you go to a single line (yay, single lines!!), that branches out to 10 or so payment cashiers, to pay for your items. They give you a ticket, which you take to another single line (yay, single lines!!), branching out to another 10 desks. Where your order is magically waiting, wrapped up in a bag and ready to go. Seriously, their setup is out of control.
It’s so clear that the management of B&H has put orders of magnitude more thinking into their operations and user experience than any other electronics store in NYC. And despite what seems like a ton of employees, their prices are virtually always the cheapest or close to cheapest you can find. Period.
The other stores have similar stories, but not similar enough to say that it’s always about operations. Jack Rabbit Sports has a treadmill where you put on the shoes you are contemplating, and they analyze your gait. Fairway has the freshest and best vegetables without the astronomical Whole Foods mark-up. It’s sometimes about customer service (Zappos), sometimes about operations (B&H), sometimes about better suppliers (Fairway). But always different enough to make it hard to generalize.
And yet, this leaves the question, why are these stores able to constantly stand head and shoulders above their competitors? Is it just willingness to put in the work? Assumedly other stores are profit-seeky as well. What gives?