If you are a retailer, then knowing how your buyers think is imperative to your business. Knowing how you think is also imperative. This post highlights seven honest retail insights from both retailers and consumers, with some examples and questions to influence honest thinking in relation to a retail selling strategy.
#1. Just because you love what you sell, doesn’t mean everyone else does
I’ve started at the painful end dear retailers, but I promise that the read is worth the pain. Unless you are Tesco, Burberry, Next or Marks and Spencer’s your retail shop is most probably a labour of love. Much like the premise of buying gifts for loved ones that you would want yourself, independent small-scale shop owners can have a tendency to stock and sell what they love. And while there is nothing wrong with selling your passion, there is if your passion is not shared with enough people to produce a respectable profit.
This is where research will play a vital role, so ask yourself (honestly):
- What sells and makes me (shop owner) a solid profit?
- Am I stocking what my buyers (or prospective buyers) are interested in?
- Am I holding onto my ‘darlings’ instead of making strategic business decisions based on demand?
- Do I select product ranges from the heart or the head?
Big name brands are cold when it comes to sales. The items or services may be attractive, but the thought process is pure business. They are selling to make money and supplier costs, planning, marketing and salaries must never out-weigh product sales.
#2. It’s not about who you know, but where you know – Location, Location, LOCATION
Has my local Aldi decided to set up shop less than 20 meters from SuperValu? Nooooo, not on your life. Unless I’m very much mistaken, they have already investigated the profit made by their neighbour and assessed the population density in the area. Aldi has enjoyed a 8.3% increase in market share for June 2014 and has 99 stores in Ireland .
However, the point here is location. If the location works for a competitor, then it’s obviously a promising location. Some survey research on personal spending habits and average salaries equals an opportunity for locals to save on groceries. Add this to that fact that bar SuperValu, the closest food store is 20 minutes’ drive away, points to a potentially strong profit avenue for Aldi.
Still, it isn’t always the case that being surrounded by competition is a viable business decision. Selling identical products with yours at higher prices (unless the quality is undoubtedly impressive, or the brand is quite unique), may be a no-brainer for shoppers. An example here is the loss of Eddie Rockets from Mahon Point. There was just no way they could compete with McDonalds or KFC.
Complementary then can be a solid path – selling health foods next to a smoothie bar for example, is a good tactical move. Accessories squeezed in the middle of two fashion stores, again equals a win-win.
So let’s ask ourselves a few more heart-to-heart questions:
- Am I located in a place that attracts my potential buyers or just where I can afford the rent/bills?
- Is there too much direct competition that may be difficult for me to compete with?
- Are my products or services unique enough to attract shoppers, in consideration of the competition?
- Are there any complimentary shops surrounding my desired location to facilitate sales?
Online, geographical location has zero importance. Setting up an e-commerce store will require a new sales strategy that includes:
- Product mix online (fresh food sales are much more difficult!) – deeper/shallower mix / different product mix
- What can you sell online and how can it be delivered / Click and Collect for in-store collection
- Pricing (includes P&P local/international)
- Transferring your brand online – can the brand be experienced the same way?
- Search engine positioning (competitor/keyword research) – to target prospective customers
- A way of answering customer service questions – postage, returns, selecting items
- Online retention strategy to tap into customer loyalty
#3. No personality, no sale
Just when you thought the post was going to be kinder, I shouldered you with this one. And it really is a tough one to face for retailers. It’s the reason why branding is key to any business.
Let’s look at a few examples of brands, brand personality and target shoppers:
- Next – High quality goods, aimed at the professional/mid-30s shopper, stylish, Seasonal
- Body Shop – Humanitarian, cause-based retailer, health-conscious shopper, mainly women
- Aldi – Cost-sensitive shopper, non-brand led, economical, less choice-driven, Simple layout (EDLP pricing strategy)
- Burberry – Uniquely British, high-fashion and quality, technology-led, innovation-leader, head-turning, Expensive
- Bershka – Cutting-edge style, affordable, aimed at under 25s, mid-quality
- Holland and Barrett – Health-conscious, offer-led, Choice-driven
- Royal Caribbean – Fun, exciting, American, commercial, energetic, high quality
So you can see that each brand defines itself by many things – the products on sale, the service, the pricing, the style, etc. All of these choices cement a brand. They are also the reasons for loyalty.
As a retailer:
- What is your brand personality?
- How does this affect the products and services you sell?
- Are you targeting the right customers for your brand? Is it appealing for them?
- Do you have a pricing strategy in-line with the brand?
- Does your corporate identity match your brand and appeal to your target market?
#4. Build it and they will come…. Hardly
I wish this were true; that merely being present was enough to pull in the sales. But alas, shoppers require more encouragement. Not only do you need to do the legwork to tell shoppers you exist, but you need to motivate them to visit, and keep repeating this practice. And as you are in this for the long haul, you need to ideally compile a business strategy and marketing strategy to make this happen.
I’m a big fan of objective-led strategies that incorporate a consistent brand personality via omni-channels (That’s a mouthful). To break this down and explain:
Evaluation and research take place to determine where and how key objectives can be achieved. This supersedes a ‘post where popular’ method and is much more business-focused and targeted.
Basically, if a platform or method does not directly support an objective, it is excluded. (This may apply to just short-term or tactical objectives, as opposed to a general strategy exclusion).
- Brick2Click – The relationship between the physical store and ecommerce site is strong and connected. One leans on the other and the strategy tends to pull on the strengths of both. Vouchers handed out in store for online purchases (Next do this, usually at Xmas)
- Device2Web – Device-driven strategy with an emphasis on mobile touch points – phone, tablet, kiosk, etc.
- eAve2Web – Retail serviced via a third party – Amazon, Groupon, eBay, Community, etc. These can lead to purchases online or in store.
Remember – multiple channels must work together.
#5. Women shop for the experience, men shop out of necessity
Ok, this is somewhat of a gender generalisation, but take it as an illustration guide.
Women are ‘touchy-feely’ shoppers – they like to take their time, admire, touch things, try them on, dream a little. If you are appealing to a woman, then you have to woo them a little – allow them to take their time and try things on, paint a picture for them and guide them to all the offers, make them feel special. Does a jeweller rush an engagement ring purchase? No, no no….they ask questions, assess her style and budget, then let her try on a good few. The end reward is far greater if patience is exercised.
Women LOVE sales. Many women will purchase items they don’t need, just because it’s in the sale.
Men on the whole are complete opposites. They want to be quickly guided to what they need – jeans, black, comfort fit, 34 inch long. Compare in front of a mirror and pick the one that is not the most or least expensive. For men you need clear signage and lots of mirrors.
Knowing HOW your customers shop will influence window-dressing, store layout, staff training….etc. It feeds into everything. If you take my rough generalisation above, you can make notes on how to appeal.
So how can this insight work for you? Tapping into the ‘ladies’ shopping habits might produce this outcome:
- Roomy changing rooms, full length mirrors and a buzzer for assistance to grab additional sizes/colours, etc.
- Sale rails with clear pricing, interspersed with new season styles
- Hang necklaces over outfits to create a ‘look’
- Sales staff dress with new season’s styles
- Provide ‘testers’
- Low-cost purchases at the checkout (jewellery)
#6. Loyalty is not easily won in today’s society
I can almost feel the nodding heads with that line. Small town local stores had loyal customers….even brands had loyal customers, but today’s shoppers leap with less thought. Now why is that?
In the rush, rush of sales, sometimes customer service slips. Sometime, it’s a lack of training, less experience, a live-to-work mentally, carelessness, misunderstanding and less care with people, are just a few reasons that loyalty is missed. You only have one chance to make a positive first impression after all. And more – Not following up, not staying in touch, not going the extra mile.
The internet is a hard-worker’s/hard-spender’s playground. Work hard on a store and advertise, sprinkle some personality and a USP that all items are under €40 and lo’ and behold…..you have pulled in eye-balls.
The points above are just to illustrate the shallowness that can occur in retail. It is all about perception, expectation, and service. Rinse. Repeat.
You also have to be aware that the long-haul of retail means flexing to fit the demands of the age. Agile business and agile marketing, so to speak. Staying true to your brand, but moving with the times and adding a smidge of innovation feeds a long-term strategy. It keeps your customers hooked.
Here are a few loyalty tricks:
- Exclusivity events and feedback
- Loyalty card schemes – Tesco, Debenhams, Boots and Stena Line all have them to reward loyalty
- Time-sensitive offers
- Discounts on your favourite / new products and services
#7. Opinions are rife and not always pretty
I may be strung up for saying there are a lot of loud-mouth shouters out there, but I don’t actually mean it to be mean, just an honest insight as to the nature of social media and real-time communication streams. While the volume is – to all extents and purposes – mute, the message is certainly declared in a ‘loud’ and uber-public fashion. In short, we are less afraid of voicing honest (or dishonest) opinions – be they good or bad.
And opinions are sticky – if I tell you my last two bunches of bananas from [unnamed store] were slimy after a day or contained some kind of bug, chances are all my connections (that were privy to my rant) are not holding back a disapproving look. They are asking questions – what is this store? How can they sell such inferior bananas? Is it just the bananas? And so on….
No ‘one is questioning me about my part. Maybe I put the bananas out in the heat – thinking this was fine. Maybe I missed the expiry date and picked them from the offers aisle. Perhaps I had started to eat a banana and a fly landed there and burrowed in.
Maybe, the retailer had no idea (I didn’t mention it to them), or it was just a bad crate of bananas. Truth be told, it doesn’t matter now. The word is out and has been crafted by me, with my anti-blame and pro-shame strategy. Never mind the fact that ALL other bunches of bananas have been perfecto in every way.
It is surprising how much power one opinion has. So if you wish to evoke an opinion, always make sure it a good one….or a negative one that you can ‘work’ to your advantage!
I hope you enjoyed reading about the truthful retail insights. If you a retailer – what strategies work for you? As a consumer – what causes you to be brand loyal?
Connect with Tweak Your Biz:
Would you like to write for Tweak Your Biz?
Tweak Your Biz is an international, business advice community and online publication. Today it is read by over 140,000 business people each month (unique visitors, Google Analytics, December, 2013). See our review of 2013 for more information.
An outstanding title can increase tweets, Facebook Likes, and visitor traffic by 50% or more. Generate great titles for your articles and blog posts with the Tweak Your Biz Title Generator.