In short, both chains created a more satisfying shopping experience. Sounds simple, right? But think about the steps involved: You have to predict what products will be in demand, make sure they're available at the right time and train employees to be helpful but not pushy. Getting all those gears working together smoothly isn't easy, but it's a winning strategy.
2. Creative cost-cutting pays off: Sometimes there's no way around it. With rising commodity prices, you have to pass on the increases to stay profitable. But will already cash-strapped customers keep buying?
Take a lesson from companies such as Kraft. The food-products giant has shed unprofitable brands and reinvented items to make them both healthier and cheaper to produce. A case in point? The company's very successful line of 100-calorie packs of crackers and cookies, which sell well because they're health-conscious, but also cost less to produce because they're so much lighter than traditional snacks.
Other food companies have gotten creative with packaging, too. As the cost of milk and other dairy prices rose, ice-cream manufacturers began selling 1.5-quart containers, rather than the traditional half-gallon size, at the same price. Wal-Mart and Costco began selling milk in square-shaped containers that save on transport costs because they can be packed more efficiently on trucks.
Ideally, such cost-cutting is a win-win situation. Your products become more healthy or environmentally friendly, while your costs go down.
3. Expand your mission: The humble neighborhood drugstore might not seem like a hotbed of economic creativity. But CVS and Walgreens both maintained steady sales this year (no easy feat in itself), while experimenting successfully with new sources of revenue. Both chains now offer retail clinics: in-store offices where nurses or physicians' assistants diagnose and treat common, non-emergency illnesses. If you need a prescription filled, the pharmacy counter is a few steps away.
The drugstore chains have also been expanding their selection of food (a major growth category), while Walgreens is testing a café concept aimed at stealing business away from Starbucks and Dunkin' Donuts.
You can't be everything to everyone, but logical outgrowths of your core business can pay off big.
4. Tell a good story: This isn't the best time to be in the luxury-goods business. After all, iconic brands from Tiffany & Co. to Neiman Marcus saw sales drop this fall. So how did Ralph Lauren wind up with a 26% increase in net income over the past six months, compared to the same period last year? Increased international sales, probably due in part to the boost the company got from outfitting the U.S. Olympic Team.
But the long-term secret to Ralph Lauren's success is its story and image, which it sells as much as clothing and accessories. People around the world associate the brand with a particular lifestyle, and it's one they want to be a part of.
Does your brand have a strong image? A story that resonates? If not, use these slow days at the end of the year to brainstorm. You'll have to be ready to sell yourself all over again in 2009.