The Tale of Trendy Tots

A few years ago I worked for a small children's boutique, Trendy Tots, when they first opened. I was recently told by a friend that Trendy Tots had gone out of business. I was not one bit surprised. In fact, I was only surprised to hear that they had lasted this long. From the start, I could tell it was a business headed for failure. But at the time, I wasn't exactly sure why I thought that. I couldn't quite put a finger on what exactly I thought their problem was and why I was so sure they would eventually have to give up and quit. With my recent forays into the study of strategic management, I think I now have a little bit better idea of what went wrong for Trendy Tots.

From the start, the owners of Trendy Tots were after a strategy of differentiation. They wanted to provide unique, high quality products that couldn't be found anywhere else. As a result, they charged a high price for their products. Unfortunately, there were a couple problems with this strategy. First, while they charged a high price, the products they were selling weren't actually the best quality. Prices were inflated simply for name brand items, and name brand items just aren't that popular in the children's departments. Second, there simply wasn't a market for what they were selling in the area they were located. Prices were too high and styles were too extreme for the small town, lower income area where they were located. The biggest customers were often grandmas who were in town for the week visiting all they're many grandchildren. This customer base, however, couldn't sustain the business since these weren't permanent customers. They were in town for a short time, made maybe two stops into the store, and then never returned.

Two other elements negatively affected Trendy Tots business, and those were competition and suppliers. While direct competition wasn't necessarily an issue, since no other children's retailers had many of the products sold in the store, there was still plenty of competition in the children's market. Within a mile, there were countless children's stores, all of which offered lower prices and greater selection, while still allowing parents to find cute, acceptable things for their kids. Most of the competition were chain stores, which had a long, successful history backing them, allowing them to stay strong and in business even during the slow times. Finally, the suppliers of Trendy Tots were a nightmare. While a few of the suppliers were well-established and well-run businesses, many suppliers were actually stay at home moms who did crafts on the side, which crafts they then went and sold to various local stores. While these suppliers allowed the owners of Trendy Tots to find the truly unique pieces, they didn't have the capacity to handle large orders, and often times inventory came in late from suppliers and there were always requests from customers that were too large for anyone to handle.

While the idea of Trendy Tots was a good one, there was no way it was going to last where it was. To have any sort of chance, the owners needed to assess the market a little bit better and set up in an area that could actually handle it.