As of August 2017, seven major retailers declared bankruptcy and more than 5,000 store locations closed their doors permanently. For some retail stores, malls and strip malls, it may seem as if a recession is on the horizon. Luckily for the industry, brands and owners just need to think outside the box when it comes to maintaining or expanding their customer bases.
Rather than sit back and watch Amazon dominate the market, retail stores must adopt technology that improves the customer experience. The e-commerce model, which grew 15 percent during the first quarter of 2017, accounts for just 8.5 percent of all retail sales. Rather than rely on traditional tricks to get customers in the store, managers must find creative ways to increase foot traffic.
Managers must innovate to find out what customers want. These leaders need to start with big data to analyze patterns, and then leverage their experience and industry know-how to make that information count. Stores should rely on improving the customer experience using a combination of technology, self-service and training clerks to be advisers rather than salespeople to drive revenue and profits.
Retail stores must build emotional connections with customers, and that means interacting with them in meaningful ways. Big data isn't just about knowing what happens along every step of a digital transaction, it's about keeping customers satisfied. Managers should delve deep into why customers actually buy the store's products and what motivates people to walk in the door. Is it to help their families, or is it to become more socially conscious? Does a store's customer base want to have more confidence in the future, or are people looking for quality products at lower prices?
Three Survival Tactics
Retail stores have ways to survive the coming apocalypse. One option is a hybrid approach that combines brick-and-mortar locations with an e-commerce model. That doesn't necessarily mean creating an e-commerce branch, but rather partnering with or acquiring a company that specializes in e-commerce. Stores may even consider having an online store that uses the Fulfillment by Amazon model. Click-and-collect models that let customers buy items online and then pick them up at the store are wildly popular.
In-store digital tools help people who don't want the click-and-collect model and who still value experiences within retail stores. Digital hubs, suggestive selling through apps and customized discounts all come into play when stores think about the types of technology to employ within the walls of a retail location.
Flexibility and adaptability are two keys for success. Rather than have a superstore that's 100,000 square feet, which was the previous model for success, stores should think about smaller locations in underserved neighborhoods that rely on an inventory coming from a warehouse at another location. This requires investment in a delivery system and online ordering system, but this strategy keeps stores stocked with a retailer's most essential items while giving customers a chance to order things online and have them shipped to the store.
The coming retail apocalypse doesn't have to happen to every store. Managers and owners who think outside the box and innovate sooner rather than later survive in an Amazon-driven world. Retail stores that deliver for their customers in every possible way win the day.
Photo courtesy of Mike Mozart at Flickr.com