>And in commoditized situations people are willing to spend more time/money or go out of their way to use your product.
It depends if your customer has money to spare and/or if they value the improvements. Walmart succeeded precisely because people don't care about anything other than price for commodities.
I think in this particular case it's largely unconscious - people (speaking for myself at least) don't look at whether a fuel pump handle has been buffed, instead they'll have a general feeling of "this station feels nicer than most".
Yeah, and the hordes of price sensitive customers will have no problem passing up your "nice" gas station for the one that's consistently 5 cents cheaper.
> hordes of price sensitive customers will have no problem passing up your "nice" gas station for the one that's consistently 5 cents cheaper
It's not obvious that these measures would boost the price. An owner might accept lower margins for scale. Or they may cut costs that don't matter, but which everyone dogmatically incurs, to incur the ones that do.
An in any case, segmentation is a thing. Targeting premium customers is a profitable strategy. It's also a virtuous cycle, since each premium customer gives you resources to expand your lead while depriving your competitors of their business (e.g. for upsold services).
Yeah, and the hordes of price sensitive customers will have no problem passing up your "nice" gas station for the one that's consistently 5 cents cheaper.
Clearly untrue, at least where I live.
There are two thriving chains of gas stations that do well because they offer superior customer experience. There are often lines inside and outside.
Then there are half a dozen other chains that are bare-bones and sell the gas for up to 30¢ a gallon cheaper. They don't have nearly the traffic as the nice chains.
That is not the full story of why Walmart Succeed, the Old School walmart (back in Sam Walton's day) was not competing on price, but on Value (Service + Price) and they successed
Walmart of today still competes on more than Price, but it is Convenience + Price. For me this is the ability to get my Oil Change Supplies, my Furnace Filters, a new pair of shoes, a belt and my Groceries all in 1 store, with 1 checkout, and I can get into that store and out of it getting everything I need for 1-2 weeks in under 30-45mins
Often times if I price shopped for every item there are places that are lower in price than Walmart, and some that are higher, but on the whole those minor fluctuations are not worth going to 5 different stores to get the "lowest price"
My sister dragged me, kicking and screaming, to one of those new Walmart Neighborhood Markets. I was shocked to learn that it didn't suck. They definitely invested in their self checkout things (unlike Kroger). I even found some foods which didn't contain HFCS. I've been back a few times.
It depends if your customer has money to spare and/or if they value the improvements. Walmart succeeded precisely because people don't care about anything other than price for commodities.