2017 did not go easy on retailers. Despite retail spending growing globally year-over-year, more than 6,700 store closures were announced last year among brands like Macy’s, Gap and RadioShack. Amazon is much to blame for the meltdown, and for good reason: its “one-click” navigation, vast inventory, competitive pricing, fast and free shipping (for Prime members) and easy return process have all contributed to its global dominance. But that’s not all that’s causing the collapse of retail.
The high volume of brick-and-mortar locations combined with the prevalence and general ease of purchasing items online (51%of Americans purchase items online vs. in store) are also contributing to the downfall. Additionally, people are now spending money on experiences and not necessarily goods.
The good news is that these trends offer several opportunities that brick-and-mortar retailers can leverage to gain a competitive edge. Let’s take a look at nine ways retailers can survive and thrive in 2018 and beyond:
Advertisement
1. Get online
It may seem like a no-brainer in today’s digital age, but nearly half of all small businesses still don’t have a web site. Consumers expect to find a brand online to see their products, compare items and make purchases — and to have a good experience while doing so. Retailers should ensure their e-Commerce sites are user-friendly and offer robust product descriptions and reviews.
2. Go social
Social media has shifted the balance of power from the brand to the consumer, creating an avenue for two-way conversation between them. Retailers must ensure they have an active presence on social media channels that isn’t limited to simply posting promotional content, but also focuses on interacting and responding to users. Engaging consumers not just as buyers but as people is the key for developing lasting relationships.
3. Encourage product reviews
Eighty-two percent of U.S. consumers read customer ratings or reviews before making purchase decisions. Therefore, the power of combining online reviews and social media cannot be overstated. Brands need a good quantity of unbiased reviews — not just positive ones — so consumers can assess posts and make their own judgments. Retailers should consider asking for and incentivizing customers to share their reviews, and use social media to promote them.
4. Perfect the in-store experience
Despite the surge in online shopping, the in-store experience is still very appealing to many consumers, but don’t let visitors use your physical location as a “show-room only” experience. If the in-store visit doesn’t feel like a special experience, then consumers won’t see an incremental benefit from visiting a store versus shopping online. Retailers should make sure their brick-and-mortar locations deliver a positive, compelling brand experience and offer value where e-Commerce sites can’t, such as a knowledgeable sales staff, easy access to products and sizes, exclusive in-store offers and great customer service.
5. Hire and train the best salespeople
Much of the retail experience depends on customer service and enticing the shopper to look at multiple product offerings, so it’s critical that retailers invest in their sales team. The best sales associates have the training and people skills required to be brand mavens and curators for customers. Their superior product knowledge enables them to identify what a customer might like and make recommendations accordingly.
6. Know your customers
It’s no surprise that there’s a generational divide between Millennial and baby boomer shoppers. Millennials, who grew up on technology, shop across multiple channels and devices and expect their experiences to be consistent, relevant and rewarding. Marketing to Millennials and meeting them where they shop will help retailers thrive into the next 20 years and beyond.
7. Offer exclusive loyalty programs
The best loyalty programs offer substantial benefits that go beyond merely offering discounts or points toward future purchases. Carve out a program that offers real value for customers, such as advanced access to deals, special treatment from sales staff or meet-and-greets with celebrities. Loyalty customers enjoy perks that are exclusive to the program and the psychological factor of being “in” with the brand.
8. Offer special brand experiences
In addition to exclusive loyalty programs, successful retailers are rebranding their companies to engage with specific audiences, offering products that are unavailable elsewhere and/or designed for a specific shopper in mind. Examples include exclusive designer collections that are only available at the designer’s shop and the retailer.
9. Measure and optimize marketing performance
Perhaps most importantly, retailers must be able to determine the marketing strategies and tactics that resonate with target audiences and drive desired behaviors, such as an online sale or in-store purchase. Technology that combines audience data with multi-touch attribution can help retailers uncover the most impactful creatives messages, offers and tactics, and then apply that insight to optimize consumer experiences and make smarter investment decisions within and across channels. Understanding the effectiveness of every marketing dollar spent is a necessary exercise for maintaining a healthy marketing ROI while driving the business forward.
While the road ahead will be challenging for retailers, all hope is not lost. By taking advantage of these nine key differentiators, retail brands can gain a competitive edge and thrive in the age of Amazon.
Wayne St. Amand is the chief marketing officer of Visual IQ, a Nielsen company. He oversees the marketing of the company’s marketing intelligence platform, including product marketing strategy, demand generation, branding, PR, analyst relations and sales enablement activities. St. Amand is a veteran marketing leader with a track record of significantly accelerating the growth trajectory of technology businesses and has played a key role in one IPO and two $100+ million acquisitions. Prior to Visual IQ, he served as the CMO at Brand Networks, a top-ranked provider of cross-channel social media advertising software and services. Before joining Brand Networks, he served as the EVP of marketing at Crimson Hexagon, an award-winning provider of social media analytics software. Outside of the marketing technology industry, he’s also led marketing for several high-growth data storage start-ups and held senior agency marketing roles with clients such as GE, HP, Motorola and Texas Instruments.
