The concept of ‘value’ has been much debated in the CIMA office – our recent CGMA business models report looked at some of the different ways in which businesses create and drive value. But what is ‘value’? The short answer is that it means different things to different people.
Some businesses create a perception of value for the customer through selling products which are (or appear to be) heavily discounted: the value here being the customer getting their desired item at a ‘bargain’ price. Others focus upon service - Richer Sounds, the UK TV, home cinema and hi-fi retailer pride themselves on the expert advice provided by their in-store sales staff. Despite operating in a sector dominated by price-competitive online retailers, they recently posted an increase of 21% in pre-tax profits.
A true audiophile would never dream of buying hi-fi equipment without testing it out first, which would to some extent explain the popularity of the 53 bricks-and-mortar stores - one of which, incidentally, features in the Guinness Book of Records for the highest sales per square foot of any retail outlet in the world - but how many of us have looked at products in-store before sneaking away to make a cheaper online purchase? Perhaps it’s the free in-store lollipops that really make the difference.
In a world where time is in short supply and the range of choices can seem almost endless, for some the value lies in outsourcing the decision-making process. The subscription economy is booming, and we now see companies such as Birchbox and Saviour Snacks who will make consumer decisions on your behalf, delivering monthly ‘surprise’ boxes of cosmetics and high-end munchies. A growing number of businesses exist to serve the disorganised and indecisive dieter, delivering a week’s worth of ready-prepared low-calorie meals directly to their door. Convenient, yes: yet they must still overcome the urge to eat the whole lot at once. There are some things you just can’t outsource.
What does ‘value’ mean to you?