Stats show that consumer spending in Australia has increased to 261905 AUD million in the last quarter of 2018. This is an increase since 2016 – so why are some stores still closing their doors?
Retail is tough with high costs involved such as rent and labour as well as being highly competitive with the advent of digital age. How can retailers fight for survival and succeed?
Keeping up with the customer:
Customer expectations continue to rise and brands have a real challenge in keeping up with these expectations. This is impacting on value propositions where retailers no longer know what their customers want or value so they try and be everything to everyone.
This results in not knowing who their profitable customers or who they should be targeting. Instead they have a strong mindset of thinking they need to discount or hold sales all the time when a lot of their customers aren’t price sensitive.
Statistics also show that even though 55% of millennial’s use their mobile phone to shop online, 1 in 2 millennials actually prefer to shop instore. So consider the gap between online and instore and how you can utilize both in your store.
Advent of digital is an external pressure:
We all know that digital makes it a lot easier to compare pricing online across the nationwide as well as all over the world. However use digital to your advantage and connect with your customers and understand their needs and wants through using marketing automation platforms.
Another suggestion is to use social media such as social shopping. Instagram has recently launched a checkout functionality which highlights the growth of retail omni-channel experience.
Consider how you can use social media to build and sustain customer relationships from the beginning of the purchase journey through to after-sales support and follow-up. It is important not to underestimate the level of human element that has to be maintained through various digital channels. There has to be someone your customers can talk to at the end of the day!
How can a retailer achieve growth in 2019?
1). Don’t make acquisition your priority – Instead find out who your most profitable customers are and look after. Don’t stop delivering value to your target customers.
2). Don’t be discount focused – Dropping your price to get sales is not a sustainability strategy. Consider what experience you can provide both instore and online to retain customers.
3). Embrace omni-channel – Ensure all lines of communication to your company is consistent and the process is clear. All staff should be on the same page.
4) Don’t consider opening new stores if the existing ones aren’t sustainable – Scalability above sustainability is not a growth strategy. Ensure your existing stores are performing and are driving customers back to repurchasing.
5). Retaining staff – Instore experience has a lot to do with how your staff treat customers and the experience they provide. Highly trained staff is very important to your business as the saying goes, ‘look after your people and they will look after you’.
We’ve established that retail is tough for a number of reasons. Customer retention is vital to succeed in today’s market.Retailers should understand their existing customers in order to influence future behaviour. Segment your customers, and identify the customers who can help you achieve business growth.It’s not all about price, but your point of difference – focus on the path to re-purchase by continuing the conversation; recognise, research, reward and remind your customers.
In summary, we understand retail is tough however customer retention is vital to succeed. Understand your target customers or expiring customers and focus on these rather than making acquisition your priority. Don’t continually price-drop rather focus on the value and experience you can provide. Focus on how you can make your customers re-purchase through rewarding your customers. Above all, consider how frequently you change your store around and refresh your displays/fittings.
Apex Display work with individual retailers, chain stores and retail designers to create successful brick ‘n’ mortar stores. Our range of off-the-shelf shopfittings systems, shop-floor displays and shop supplies are perfectly suited to the large majority of retail requirements. We offer the flexibility of customised solutions without the overwhelming price tag. Contact us today on 1800 111 488.