Is Your Retail Business Stuck in the Middle? Here's How to Fix That

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This episode unpacks how to fix it if your business is stuck in the middle. Not value, not luxury, and forever worrying about margin and discounting.

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This is part three of my three part series. The three part series has been focusing on discounting

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data and how to escape the middle market trap, which is also supported by free downloadable resource and a retail clarity quiz.

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More about that at the end. Welcome to Retail Reckoning. I'm Clare Bailey. This is the last episode in focusing on how to fix it. If you recognize yourself as stuck in the middle ground. Let me describe a business and let me see if this feels

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familiar to you. You're not the cheapest in your market. You're not the most premium. You run promotions, but they don't always land. You've

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got good products, but customers don't always see the difference between yours and a discounter. Sales are fine. Your margin feels under constant pressure,

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and every now and then you find yourself thinking, we're doing such a lot, running around like headless chickens.

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Why does this all still feel so hard? If that sounds familiar, then you are not alone because a lot of the businesses I'm talking to right now are in the exact same position, and that's the sort of murky middle

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ground, and this is the uncomfortable truth. The middle isn't really a strategy. It's often the result of a lack of strategy, so let's consider: why doesn't this work anymore?

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Well, it used to work. It used to be absolutely typical that some of the best retailers out there were very much in the middle. You could be reasonably priced, of decent quality and serve a really wide customer base. That was more than

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enough. But since then, over the last five to ten years, we all know that the market has changed.

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And customers have become sharper, competition has become stronger. There seems to be endless amounts of choice, and that changes everything because average is no longer compelling. For

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instance, five to ten years ago, a lot of people probably wouldn't have considered doing their food shop in Aldi — they thought, you know, it's a bit beneath them.

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Perhaps it was thrifty, wasn't cool. But now, almost everyone I know really rates them. Aldi has just been voted

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best supermarket of the year for the fifth year running. Lidl are opening more stores. So that puts pressure on the likes of Sainsbury's and Tesco and Asda who are in the middle.

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Waitrose and M&S are considered more luxury and more of a treat. So what's happening is this polarisation whereby the two ends that are winning are at the low end — where it's simple, clear value, confident, decent quality, but it's no frills. Customers know what they're going to get and they trust it.

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The other end — more premium. It's not just that higher price, but it's that brand identity, and they give a better

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experience, a better story. The packaging looks luxurious, the store environment is nicer, and it creates more of an emotional connection.

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The thing I also realise is that if a retailer is not clearly better at something that matters, it's too easy to ignore you or to

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replace you with someone who is, and that is what is happening in a lot of categories right now.

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So there's this clarity — clear, confident brand identity, messaging, experience, product quality and pricing all go together, and that's why, if it's

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not quite one thing, not quite another, it starts to blur. So the middle often has fairly inconsistent pricing,

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somewhat vague messaging and limited differentiation. So you kind of leave the customer questioning: why should I choose you?

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And if you haven't been able to answer that question quickly, they move on. And this is something we also picked up on in another podcast with my colleague Danny, who's a brand

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strategist. We talked about the importance of brand identity, clear messaging, knowing who you were, who you stood for, who you wanted to serve, what you wanted to make the customer feel.

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And a lot of small businesses, particularly, think that's only for big companies — but it's really not. It's as important for anyone. And the

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couple of clients I know who are small businesses who've worked with her through me — they've really, really appreciated it because they were having light bulb moments and often they get quite emotional, because they suddenly

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feel more connected to their business. And that means they then really understand how to be consistent — consistent, strong, clear, and confident and

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differentiated. And that's when they're no longer stuck in the middle. The other problem is a lot of businesses in the middle don't really have

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a price problem. It is really just about the clarity, because by trying to appeal to too many people and not being specific about who the customer is, and trying

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to compete on too many dimensions — choice and range, and pricing and discounting — and buying more stock because that stock's not selling,

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so we need something that will. And often it's about avoiding making difficult decisions. So in doing all that, inadvertently,

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they're diluting their own proposition — because the reality is, you can't be everything to everyone anymore. That said, you can be everything

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to someone sometimes. Pretty much everyone I know, whether they earn a fortune or very little, would

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like to shop at Aldi. Not for everything and not every time. So a discounter has a clear proposition that says: these are the boring basics.

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We sell this and we sell it cheaply — not because it's poor quality, but because we don't really faff about with store design or

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luxury experiences. You just get what you get. And so people will shop there. But people also then use the savings on what I call the boring basics for the

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interesting additions — the little luxuries and the treats. And by saving at one end, it gives them more to spend at the other.

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And I don't think anybody in this market — with what's going on in the world and the level of competition — can be complacent about this, because even those with the deepest pockets are still thinking long and hard about where to

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spend their money. Because there's the fear factor — things are changing. What if I don't have as much? So people are actually saving

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rather than spending. And that's the other problem. Getting the appeal right means you'll actually be able to attract people in, because they'll understand what you

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do. But the fix — well, let's face it, this is what most people want to hear. What is the fix? And it's about being practical.

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If you were listening to this so far and thinking, gosh, this is us — where would I start? Well, choose where you belong.

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Choose your lane. And please do listen to that brand strategy podcast if you wish, because this is a big one. You need to decide where you want to stand

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out from the crowd, and it won't be everywhere — but it'll be somewhere, sometimes, for someone.

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And actually if you can nail loyal, dedicated customers — although it may seem counterintuitive — sometimes less is more, because they'll keep coming back and they'll make that

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emotional connection, whether it's at the value end because they really appreciate the cost differentiation, or whether it's at the higher end because they appreciate the service and

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experience levels. And you need to ask yourself: are you wanting to compete on price? Or are you wanting to be stronger on

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experience and expertise? When I do conference talks, I often say: be more stellar, because you don't compete on price. You compete on service and experience. Particularly

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if you're a small business, because you know your customer, you can really tailor the experience to their needs and wants, you understand the local community because you probably live in it.

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And competing on price is a race to the bottom. With some of the biggest multinationals who've got the deepest pockets, it's never going to work. If you are trying to do both — which is what a lot of

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smaller businesses do with their positioning, trying to be the best possible value but also brilliant on experience, product and service —

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you'll be stretching everything just far too thin. So clarity of messaging beats trying to do everything.

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And the other thing I'd recommend is: when small businesses feel that sales aren't coming through, their first instinct is to add more products to the range, thinking that if there's more choice, more products, more promotions, more noise, it'll appeal to customers and they'll come in more often.

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But generally, the smarter thing to do is the opposite — and yes, it's slightly counterintuitive — but editing the range, curating it, tightening up and focusing on what really sells and

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really drives margin. And also remove what confuses customers. So your merchandising is really important. An edited range — so you've got product on

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shelf — but then maybe room sets, or outfitting, or whatever design feature you'd like to create to engage and inspire their interest, so they can actually see what you've

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got. Don't feel overwhelmed. And if you're doing it with the ideal customer you want to work with in mind — one you've hopefully defined when you've thought about who you want to be and who you

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want to serve — then you can tighten your range and remove the confusion. I don't know if anybody else has felt this way, but I've gone into a couple of big supermarkets and I just want to buy

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some shampoo, and there are so many options that sometimes I just find myself walking away thinking: I can't be doing with that. It's too overwhelming. There's far too much going on. Whereas in the

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discounters, they do quite the opposite. They might have three types of shampoo — not 400. That's probably an exaggeration —

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but let's say 40 or 50. That means my choice is limited and I know that it's

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perhaps good, better, best — and I'll just pick the one that happens to solve my requirement. I only need to pick one. And if there are three available and they've made it easy for me to shop, I'll be more likely to buy.

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Customers find it easier to understand an edited range — easier to buy, less overwhelming. The third thing I think is about your price

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architecture. And lots of businesses lose a bit of control here. You get inconsistent price points, unclear logic around margins, and

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promotions don't really connect with customers because they don't understand them. And customers might be feeling confused, even if they don't articulate it. Your pricing should tell a story —

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like I said for Aldi: good, better, best — or entry, core, premium. You'll sell more at the core, less at the premium — more so if you're less

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premium-positioned. But entry's there even if you're premium-positioned, to cover the fact that not everyone has a large amount of cash this week. They might want to buy

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premium sometimes, but other times they might need to trade down because they've just had a big bill or the car broke down.

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So it's clear steps, clear logic, clear brand identity, value position — and not randomness, panic buying or panic discounting.

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And the next thing: give people a reason to shop with you beyond price. If price is the only lever you've got

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to influence customers, you are definitely vulnerable to the big players with the deep pockets.

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So why else would someone want to choose you? This needs to come into that brand identity and brand strategy work. Ask yourself: is it our expertise and product knowledge?

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Very much often the case with boutiques. Is it our service? Again, great with boutiques. Is it speed? Well, there's a

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trade-off between speed — instant gratification — and being honest with the customer and saying: this is a make-to-order item and it'll be a couple of weeks. But as long as you manage their

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expectations, that's what counts. So the truth about speed: if you haven't got product on the shelf right there,

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is it the in-store experience? Does it smell great? Is there lovely lighting? Does it feel like somewhere they want to dwell?

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But most of all — do they choose you because they trust you? If you're a boutique, you might be a local member of the community. You might even have kids at the local football

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club or at local schools. And they'll probably trust you because they know you in a more social way than whoever runs the big chain —

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someone they're never going to meet and would never know. So think about why someone might choose you. And if you can't answer that question quickly, that's the signal to start analysing it and thinking

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about who you want to be. And I touched on this before — the final one is making it easier to buy. I think you

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have to step into your customer's shoes and even walk along the street, if you're a physical retailer, to your store premises and observe the exterior. Are the windows

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clean, well lit? Is it well maintained? What would entice them across the threshold? And then is it well laid out? Can they clearly see the offers, the product?

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And do they have inspiration about how to use the product and imagine it in their own life? And those are the sorts of things you have to think about when you look at the business through a

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customer's eyes. They need to easily understand what you sell, how to choose it, and how easy it is to buy.

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So if you do multichannel, for example, they might come into the store and browse, then go away and have a think about it, then order online for click and collect — that might be how they like to buy. Or they might have been

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online, thought "oh, that looks interesting," and then come into the store to validate the quality.

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So understanding your ideal customer's journey and flow is fundamentally important, because any kind of friction in the customer conversion process or customer experience will kill

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off the conversion. And the businesses that remove friction and make it as smooth and easy and enjoyable as possible are

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more likely to get customers spending more, more often, and choosing them.

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So if you are feeling like you might be in the middle right now — this is not a criticism, it's just a position, and that can be changed. That isn't something you do by accident; you do it by

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design. You do it with intention. So a question I would leave you with is: what do you want to be known for, from your customer's point of view?

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Because when you can answer that, everything gets easier. Your pricing, your ranging, marketing decisions — everything. And then you'll start moving ahead with purpose.

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So to wrap up — if there's one theme running through this entire series, it's all about clarity. Not complexity, not more data, not more panicky promotions, but clarity.

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Clarity of position, clarity of brand — across pricing pressure and discounting and the rise of smarter systems. Actually, the

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businesses that are doing really well have made it clear who they are, what they're about, who they serve, and why they matter — and are usually part of a strong community who support them and

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want to support them. So don't think it's a permanent position if you feel stuck — but it's not something that will just fix itself overnight. It does require choices,

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sometimes uncomfortable ones, and it's a place you might need support to dig your way out of — but support is available.

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If these three episodes have provoked thought — and when I talk about support — if you want a no-obligation chat, you're welcome to contact me at thechampion@retailchampion.co.uk,

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or you can drop me a WhatsApp message.

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There's also a free download that accompanies the three-part series, along with deep-dive playbooks addressing key commercial topics, and that's at theretailchampion.co.uk/retail-

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playbooks. And if you want to stay up to date with future episodes as they land, you can subscribe to receive email notifications via retailreckoningpodcast.co.uk/

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newsletter. Finally, you can also take our Retail Clarity Scorecard quiz to receive personalised recommendations based on your answers. Ping me an

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email or sign up to the newsletter and I'll send you the link. I've been Clare Bailey, The Retail Champion — and this was Retail Reckoning.