Sunday, September 23, 2012

Unique Value Proposition (UVP)

In a discussion about starting a game store in an online forum, someone brought up the UVP, the Unique Value Proposition. What do you have to offer that's unique to drive customers to your business? You want your store to be differentiated from competitors, to offer something special, be it product, service, or convenience. If you can't differentiate, you won't get noticed and nobody will shop with you.

I would argue that a UVP is vital in an online environment, where customers generally focus on price, an area that you have only a reasonable amount of flexibility in which to assist them. Most small business sellers in the game trade will tell you the magic number to stay in business online is no more than a 20% discount. So if everyone is giving a 20% discount online, you better have a finely honed UVP, be it unique product you somehow acquire (likely import), remainders, or helpful reviews or an online community to provide crowd sourced service. It's a wickedly complex proposition that most do poorly, scraping along the bottom with tiny monthly sales numbers.

A brick and mortar store still has to have a Unique Value Proposition, but not nearly as unique as the entire Internet. A better term for brick and mortar might be Useful Value Proposition. You can't discount and survive, so that leaves service, convenience and an area the Internet can't compete with, community. The Unique VP is vital if you want venture capital money, and desperately important for online sales, but plain old brick and mortar? A clean, well lit, community focused store that's well run, that slavishly brings in new releases and listens to its customers, is enough. It's certainly wickedly hard, but it's not especially unique; definitely Useful.

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