Back in the day, when there were many active regional floor covering associations, I was often asked to speak from time to time at their monthly meetings. I would cover a range of topics that I thought could help retailers.
I was thinking about this the other day when a dealer was complaining to me about a decrease in traffic. I remember always asking the audience this question: “Why should someone shop in your store?” You wouldn’t believe some of the answers. Some people even struggled to come up with a response.
All this begs the question, “How are you different?” Don’t tell me your people are better. Don’t tell me you have great products. Every flooring dealer has something nicer than what’s on your customers’ floors right now. Bottom line: If you can’t answer why you’re different, you’re probably not.
I cite the airline industry as one with minimal differentiation. In 1929, the founder of Delta Airlines said, “All airlines are the same; only the people are different.” Until relatively recently, the three major airlines—American, Delta and United—were flying full planes and cutting service to the bone, yet they managed to lose billions of dollars each year. It wasn’t until they shifted from a one-stream model of selling tickets to a diversified approach, specifically lucrative loyalty programs and co-branded credit cards, that they started to make money. (I wrote about this a few issues back.)
Why did airlines constantly lose money? Because ticket prices became more important. And when price becomes the most important issue, and you are selling a pure commodity, the company that wins is the low-cost producer. The most successful brand in the airline industry was always Southwest, and the No. 1 component of their brand was price. They had the lowest cost structure. (Now they don’t: Frontier, Spirit, Allegiant and Avelo have surpassed Southwest in that metric.) Meantime, the other major airlines were trying to compete on price despite having a higher cost structure.
If you offer the same products or services as your competition, you have nothing unique. If you service customers the same way your competition does, you’re not exceptional. On the other hand, you become unique when you are noticeably more convenient, more responsive, more able to customize some aspects of your service.
Example: When JetBlue first launched, they offered some creativity and differentiation. At one point they were the only airline offering a boatload of channels of DirecTV at every seat— for free. They also used to offer premium snacks like those Terra Blue potato chips, chocolate chip cookies, Cheez-its, etc. They also attempted to facilitate the traveling experience by having more staff at the check-in counter so people were processed quickly. But JetBlue got away from the things that made them different, or other airlines mimicked them—and guess what? They’re bleeding red.
Now take Southwest, which was different until they were not. Southwest for the longest time was the only airline with a “bags-fly-free” policy, a pick-your-seat policy upon boarding and no change fees. Last year they started charging for bags and assigning (charging for) seats. And in the post-COVID-19 world, pretty much all domestic airlines did away with change fees. For the record, net income in 2025 was $441 million. It was $2.3 billion in 2019. Notice a trend?
Another example: John Titus of F.D. Titus & Sons in City of Industry, Calif., was a highly profitable health care products distributor before selling to General Medical. Titus realized that his doctor clients value spending their time with their patients, not managing their inventory. So Titus offered to do it for them. But he didn’t stop there; he even went so far as to have his products delivered right into the various departments within clinics and remove the packaging materials. In exchange, customers agreed to swing all their business to Titus at negotiated prices.
Let’s look at grocery stores. Grocers can’t figure out why they’re not making money. If you can’t figure out why a person goes there, then you’re just selling a low-line product for a coupon. But what if you promote home-meal replacement? The grocery store that’s in the business of pre-cooking the meal and letting you buy it, take it home, plop it in a bowl and pretend you cooked it are the grocery stores that are making it. The rest of the grocery stores are trying to compete with Wal-Mart.
Bottom line: If you can’t differentiate on the basis of unique products or better prices, then you’ll become dispensable
