The Diaper Store that Died

A few years ago, my wife and I lived in a small town north of the city. Our daughter was still in diapers, so when a small diaper store opened in town I was intrigued (from a business perspective).

Why?....because there are no "diaper stores". People buy diapers at Wal-Mart or the drug store when they are buying other items. They generally don't go to the "diaper store" any more than they would go to the "Tylenol store".

I dropped in, and met the very, very nice owner. He gave me an enthusiastic (and well rehearsed) sales pitch about the diapers they sold (not a national brand), and how I could save money if I bought them in bulk from his store. In surveying the merchandise, I determined that most of it could be found at any major discount retailer.

As a marketer, I had a bad feeling. You know the feeling you get when you meet someone very well intentioned who seems headed down a slippery slope. My concerns:

* There was no point of differentiation in the product mix

* People generally don't buy in bulk from a small local store. If they are bulk buyers, they get a membership at Costco and buy everything in bulk, not just diapers.   

* There were four stores within a 5 minute drive where customers could buy any of merchandise for less.

A few weeks later, I saw a half page display ad in the local newspaper - a sure sign the business was close to failure. Short of traffic after just a few weeks, the owner turned to expensive advertising to drive revenue. But the ad mirrored the in-store experience - promoting diapers and products that were readily available anywhere else.

I wondered why the owner didn't push the environmental angle of cloth diapers - or some other aspect of his service that would change the way local residents looked at diapers.

A few weeks after that, the store was closed.

A hard working, dedicated owner committed to a great service experience + no point of difference + readily available substitutes = a bad outcome.

Service and effort are usually not enough. Customers need a reason to buy from you.