The retail sector in flux
The stationary retail business is confronted by fundamental challenges; this is hardly a new insight, admittedly. Ever more complex product ranges, high shop rents, online competition and much else besides are subjecting many segments of the retail business to constant pressure. The months of the pandemic have proved an additional fire accelerant for large parts of the retail sector, in some cases hastening to an alarming extent the progress of processes that were already underway.
As of today, writing at the beginning of August 2020, the coronavirus situation has become somewhat less critical, but no one can predict with any degree of certainty or exactitude how the situation will develop in the coming months. In view of this, as a retailer you are safer with the broadest possible positioning. This, again, is no new insight gleaned from the pandemic, but it has once again highlighted the need for adjustments.
Back to basics – it can be helpful to look back
In times of change, it is often best to begin not by looking to the future but by looking back; by reminding oneself of the basics. Here, certain questions are of central importance: Who are my customers? Is my product range still up to date? Do I have the right location? Am I offering the ideal range of services? Are they being implemented efficiently? Is the sales process – from the range of goods on offer and the advice proffered to the means of payment and delivery – perfectly organized from the standpoint of my customers? Is my business model still viable? In a nutshell, can a customer buy what he or she needs from me without stress, aggravation, or delay?
In essence, these questions are of no special relevance to the exceptional circumstances created by the pandemic; they are questions of universal validity. When talking to retailers, however, it is not uncommon to discover that they are not (or are no longer) even asking these questions, or that if they are, they are not finding answers to them. At first glance, this may seem surprising, since such questions touch upon the core of any business activity, but the explanation is simple: retailers have such a multiplicity of problems to cope with in the course of their day-to-day working life that they can easily lose sight of the fundamental factors for success.
Strategies for success in the stationary retail business
In recent years, retail specialists have identified a whole array of additional success factors that have retained their fundamental validity even in the age of the coronavirus. These include, first and foremost, the upgrading of on-site shopping facilities – perhaps involving experiential shopping – but also showroom concepts with subsequent delivery; the creation of themed areas; storytelling around selected products or brands; improved on-site customer guidance, lighting, use of colours, ambience creation, range selection and merchandise presentation; and the provision of additional attractions (such as an adjacent café or cultural offerings).
The way the actual process of purchasing is handled is also of fundamental importance; things like payment modalities, the availability of goods, and the readiness to deliver or even install products in the home. And, last but not least, soft factors – such as how the owner or sales staff address the customer, after-sales support, and complaints management should something go wrong – are of crucial importance.
Broader positioning through omni-channel marketing
In addition to these possibilities for optimisation directly at retailers’ locations, their individual retail strategies are increasingly being re-examined in recent years. Retailers overly reliant upon a supposedly safe location in a well-frequented pedestrian zone quickly encounter existential problems when their previously reliable stream of visitors is interrupted – due to factors such as the coronavirus. But how can retailers position their businesses on a broader and thereby less vulnerable basis?
Recent years have seen reliance increasingly placed upon multi-channel marketing (the use of disparate sales channels) and cross-channel marketing (which involves the optimized linking of sales channels). Now, however, the trend is increasingly towards a so-called ‘omni-channel’ strategy – by which is meant the linking of online and offline offers in as seamless a fashion as possible – in which all marketing and communication channels are integrated.
Omni-channel marketing is a sort of one-stop sales strategy aimed at optimising the management of the entire experience the customer enjoys with your company. It takes in all the key procedures involved as well as all points of contact between the customer and a brand or service provider, right up to the completed sales transaction, and even – with a view to fostering customer loyalty – beyond it.
Now, some retailers may think that Amazon and the other “major players” are already doing all that can be done in this area and investing vast sums in the process, and be asking themselves, what means are open to me to outperform them and could I even afford to? However, this is the wrong approach. Intelligent online strategy is not primarily about whether you actually sell online or not, nor is it about what you sell online. It is first and foremost about basic matters such as: How should I inform potential customers about the goods or services I am offering? How can I make customers aware of my existence? Some traders are invisible online, so when customers are seeking to get an overview first of all of what is on offer locally, they will often fail to even find some of the relevant outlets. And how can it be that you still see advertisements for shops in your locality that do not even give the opening hours?
An important point to note here is that the way people obtain their information has changed significantly in recent years – not least due to the social media. But it is also true that most customers still have greater faith in reliable sources of information and value most the advice of those who are actually competent to give it.
In order to survive the competition, the retail sector will have to unleash its full creative potential. We live in times of great disruption, in which processes are changing at a breathtaking pace. The speed at which you react is often the difference between success and failure. For this reason, industry specialists are fond of the laconic watchword: “do or die”. Granted, that makes the strategy sound rather dangerous, but it doesn’t have to be.