The Next Set of Specialty Retailer Winners

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The Next Set of Specialty Retailer Winners

By Gary Williams - 03/29/2016
With 2015 in the books and the Top 10 Specialty Retailers rankings complete, we turn to how 2016 is likely to play out. At wRatings, we monitor how well companies meet their customers’ expectations. Successful companies set customer expectations high and then meet them better than rivals. We measure competitive strength by how well a company meets expectations across nine customer moats to create a vested customer base that are not just loyal, but truly fans.

While Nike jumps to the #1 spot in our total moats score, Columbia Sportswear remains in the top three. Historically, Nike is one of our top scorers due to their sprawling yet surgical approach to building their business beyond just a brand. Their recent announcement of a chief digital officer is a strategic move to retain and accelerate their channel lock-out moat (the unique, safe distribution of products that locks out competitors). This embraces Nike’s direct-to-consumer strategy and extends their reach to masterfully control the conversation.

But don’t count Under Armour out by any means. While slipping to #12 in the forward-looking ranks, UA has been recently climbing in their total moats due to its focus on non-athletic gear— better known as software and electronics. Although not revolutionary, their fitness tracking devices build a routine reliance moat where UA products are connected seamlessly into the everyday life of a consumer. UA also ranks much higher than Nike (#3 vs. #17) in terms of innovation. Don’t ever doubt Kevin Plank’s drive to win.

The largest jump from the current 2015 rankings into our future 2016 winners is Tiffany, which moves from #27 to become the #4 specialty retailer in total moats. Today, they out-perform the specialty retailer average on eight of the nine moats, which indicates substantial strength over rivals. Although many investors have discarded the company, Tiffany possesses a strong fan base of customers that are vested in its future. As management expands its brand into relationships like with the recent Coty fragrance, growth could return faster than what most speculate.

Whether you choose to change or are forced to change, new winners will emerge by the end of 2016. The path is straight-forward: Set the bar high with customers and then meet those expectations better than any rival.

Gary A. Williams is founder & CEO for wRatings. For more information go to http://www.ratings.com