The retail industry is going through some very tough times lately, primarily because of advances in technology. E-commerce is no longer a fringe activity and social media has changed the way marketing and branding to consumers is done. This has resulted in some retailers downsizing or even closing down. But it doesn’t have to be that way. They need to adapt and be creative though if they want to survive.
It’s important that retailers understand what they’re going up against and realise what they can and can’t do better than their e-commerce counterparts. For example, it’s hard to beat online shopping when it comes to convenience, variety and pricing. So, they have to compete on other fronts.
Here are five things that retailers should be looking at if they want to thrive in these challenging times.
SUPERIOR CUSTOMER SERVICE
Retailers need to start treating customers as long-term clients rather than one-off buyers. They can foster this by building a database of their clients and investing time and energy on knowing their customers better. The more insight a company has about its customers, the better they can serve them, reward them and ultimately, make them loyal, return customers.
Customer service has always been important but in the past there were other considerations, most notably pricing and availability of certain products. If a retailer had the cheapest price or was the only one that carried a certain type of item, customers will sometimes be willing to overlook poor customer service. But in the era of e-commerce, it’s impossible to beat online retailers in these areas. So customer service is where physical retailers can be competitive.
Excellent customer service requires companies to hire better-quality employees and to invest in their training. This of course entails more costs but it’s necessary to give that good experience as consumers have countless online options. So, their expectations are naturally higher too.
EXPERIENTIAL SHOPPING (AND SMALLER FOOTPRINT)
It’s said that physical retail stores are no longer meant to be places of transactions only. They also need to be places for experience. Showfields in New York is a great example of this. It has knowledgeable salespeople who act as guides and there are several experiential showrooms (shooting pictures and posting them on social media is encouraged). The shop doesn’t stock any inventory. Instead, customers can make their order through kiosks.
Another good example is The Dreamery by Casper, also in New York. The sleep company has a shop where consumers can book a 45-minute nap to try out the mattresses before they buy them. Every nap session is US$25.00, which includes beverages, comfortable pyjamas, amenities, and a private space for resting and recharging.
Many of these types of experiential stores will be smaller than a typical retail outlet selling the same types of products since they will not hold much (if any) inventory. Customers go there for the experience before making their purchase online.
Some could even be purely to serve their customers better. Nordstrom, for example, has three smaller stores in Los Angeles designed specifically just for that. These stores specialise in processing returns, serving as pick up points for e-commerce orders and for getting items tailored. The purpose of these stores is not to even display merchandise but simply to provide a more superior customer service.
SOCIAL INFLUENCERS
Social media is a critical component of the marketing mix and like it or not, social influencers are an important part of that. These influencers need not be super stars. They could be micro-influencers with a substantial following but are not actual famous celebrities. The more popular ones would usually expect to be paid to promote your brand but if the influencer is someone who already likes your brand, they might be happy to accept payment in kind, by way of your products and services. Posts by such authentically enthusiastic influencers will go viral, especially if the influencer is popular and the audience feels that person really likes the product.
MULTI-CHANNEL PAYMENTS
There was a time when even having a credit card payment option was considered progressive. Nowadays, there are so many other cashless ways of paying. Whether your customer wants to pay by cash, credit card, debit card, e-wallet, bank transfer, PayPal or other new and innovative means, retailers should facilitate it. The aim should be to allow consumers to pay whichever way they want on whichever device they prefer. The ideal situation is for payment to be frictionless. Think about how you pay for Grab. You don’t even have to think about it. When you arrive at your destination, you get out of the car. The payment is all done in the background. Imagine if retailing was like that!
SUSTAINABILITY
We live in an age of greater social awareness of the importance of eco-friendliness sustainability. Millennials, especially, are very concerned about the negative impact of plastic on our environment. Retailers that go out of their way to have a more sustainable ethos will naturally appeal to such people. All things being equal, the company that is more “green” will have a stronger appeal to young people. But even older folks are increasingly more aware and concerned about the importance of being eco-friendly. As such, sustainable practices need to be adopted. Consumers will demand this and vote with their wallets.
Oon Yeoh is a consultant with experiences in print, online and mobile media. Reach him at oonyeoh@gmail.com.