Top innovators consistently drive success via a number of key strategies that may not be oblivious. One measure of these companies is the industry standard of sales per square foot. Despite the fact that these companies represent a diverse sampling of industries — from gadgets to gold to golf shirts — almost all of them have woven their success from common innovation secrets. Here is the list of the top ten companies and their sales per square foot:
1. Apple: $5,626
2. Tiffany & Co.: $2,974
3. Coach: $1,820
4. Lululemon Athletica: $1,731
5. GameStop: $1,009
6. Costco Wholesale: $998
7. Signet Jewelers: $955
8. Polo Ralph Lauren: $904
9. Whole Foods Market: $867
10. Best Buy: $831
So what is it that these star performers are doing to put up such extraordinary numbers? They innovate by using one or more of the following secrets.
They turn “I want” into “I need“: Other than Costco selling staple groceries, not one of these companies sells anything that anyone genuinely needs. But through a combination of drool-worthy products, exceptional merchandising, buzz, and fomenting what amounts to peer pressure among their target customers, these companies pull off masterful manipulations of customer psychology.
They aren’t afraid of high prices: On the contrary, high prices are a key part of the formula for nearly all of these companies (Costco being the most notable exception). More expensive suggests better (even if it’s not) and more exclusive (or elusive).
They employ “strategic scarcity”: It’s hard-wired that one of the best ways to make someone want something is to tell him he can’t have it. And many of these innovative companies use this secret, either in reality by controlling production (wait in line or you might not get one), or perception (only one purse in a heavenly-lit cubicle in a sparsely-stocked boutique). Both fuel rabid desire and support high prices.
Do you use these or other innovative secrets to drive business leadership? What ways are innovative strategies impacting your market?
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