Why Some Retail Companies Are Succeeding Where Others Fail

John Scott
Posted by in Retail



Current retail-industry trends suggest many retail companies are experiencing a rough patch in sales, to put it kindly. Consumers are working with smaller paychecks and reserving even less for extraneous expenses. Curiously, some businesses are telling a happier story, sustained by a level of growth and development that's a rare breed in this sluggish economy. It's a thin line between success and failure in the retail industry, and some companies have managed to carefully tiptoe around permanent doom.

 

Sephora, retailer of high-end cosmetics and beauty products, is a recession success story. This beauty retail company survived an industry outlook of diminishing sales and watched products fly off the shelves. Much of its success can be attributed to modern technology and a willingness to completely mobilize its potential. Sephora offers a multichannel digital platform for personalizing the individual's shopping experience. It’s the first of its kind to integrate the digital user experience into the offline format of physical storefronts. Customers can digitize offline excursions by picking up iPads stationed in stores. From these complimentary tablets, they can access thousands of products, along with tips and reviews, on the fly. With shoppers relying on the Internet for product information, Sephora's move to combine the in-store and out-of-store experience is one of genius, as outlined in the article "Sephora's Beauty Is More Than Just Skin Deep."

 

Best Buy is closing around 50 stores and focusing its vision on smaller retail outlets. This move contrasts with h.h.gregg, which has been expanding its storefronts and witnessing record sales. In comparison, both retail companies offer essentially the same selection of services and products, which is why h.h.gregg's growth is so amazing. Retail-industry analysis indicates the reasons are twofold. First, h.h.gregg enjoys more word-of-mouth advertising both online and off due to its stellar customer service. Secondly, the retail company rolled out a fully functional online store and website when other electronic retailers were just beginning to take online sales seriously. The retailer ran head first into innovation while maintaining quality customer support and has outpaced competitors in both regards.

 

Grocery retailers are the successful oddballs of the retail market. Retail-industry analysis revealed grocery retail companies are able to operate on shoestring profit margins. But in a bid to improve sales, some grocery stores have adopted the retail-industry trend of rewards programs, detailed in an article by Alex Kecskes on Nexxt. These programs entice customers by promising discounts on popular products and frequent-shopper advantages.

 

Retail success is a matter of survival of the fittest. The stores most willing and able to adapt to their changing environment rise to the top. Sephora, h.h.gregg, and the grocery sector serve as high-profile reminders on the value of mobilizing technology, sales promotions, and other strategies to meet the demands of cash-strapped consumers. By adjusting to economic trends and turning a keen ear to customer needs, you can tip the scale in your favor much like these thriving retail companies.

 

Photo courtesy of freedigitalphotos.net

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  • Melissa Kennedy
    Melissa Kennedy
    Thanks for the comments. @Amanda - Finding your business's unique voice is a great way to find the right channels.@Julie - The arts are certainly struggling these days. I think that for small businesses that focus on teaching the arts, like dance studios and so on, it's best to find what makes them special and market the business that way. For example, a dance studio can offer free introductory classes and so on, but maybe they could advertise with a focus on how dance class helps children build skills that last their whole lives, even if they don't become dancers. I'm sure there are plenty of adults who remember what ballet lessons meant to them. It's all about finding what makes you special and different from the competition.
  • Amanda M
    Amanda M
    Customer loyalty programs and diversification in marketing your products in different channels is great. Providing great customer service is always going to help you increase sales.
  • JULIE G
    JULIE G
    Marketing is great if your store fits.  What about the arts and those who teach.We are a luxury item, they can do without but then what happens to the artists of tomorrow.  Will they be self taught>

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