Tuesday 08 September 2009 | www.smartcompany.com.au | Nina Hendy
Retailing used to be a pretty simple affair. If the shelves were well stocked and an A-Board
promoting your specials was on the footpath, you were in business. But the rules of the game are
changing as a new breed of consumer demands more from retailers than ever before.
Exceptional service, tailored communications, a dazzling in-store experience and the ability to buy online is just the start. Not surprisingly, these new demands are stretching Australian retailers well outside their comfort zone.
So take note. Mediocre retailers won't last long in the current environment.
1. Cater for online research
Okay, so you've got your website and you may have even dabbled in social marketing sites like Twitter and Facebook, but an online strategy has to go beyond that these days. Increasingly, buyers are researching their purchase online before they shop, plugging non-brand keywords into a search engine. This means that retailers need to ensure that their store or brand will be found when people are searching online.
Stephen Ogden-Barnes, program director of the Australian Centre for Retail Studies, says retailers need to wise up to this trend.
"We believe there's a misconception among retailers that the internet is only used for selling, but it's also used by consumers who conduct research. For a retailer not to have a presence online would be foolhardy," Ogden-Barnes says.
Chris Thomas, who heads up search engine optimisation (SEO) company Reseo, says SEO and Google AdWords are vital for retailers. "Product information needs to be clearly displayed and strong photography could give a retailer an edge over their competitors." Thomas says offering a discount voucher incentive, which can be printed out and taken in-store for
redemption, could get a sale over the line.
2. Simplify the online buying process
While some retailers are slowly making their way into the online world, in some cases, the processes they're putting in place creates barriers to a sale.
Chris Hitchen, CEO of price aggregation site getprice.com.au says asking customers to register pages of information about themselves before they're able to make an online purchase is ridiculous.
Filling out pages of forms doesn't hold true in the offline world, so retailers shouldn't be making
consumers do this on their website.
"Consumers don't like to have to register to buy something from your site unless you're offering them an incentive to do so, like a discount," Hitchen says.
3. Go green
Consumers not only want to be able to purchase environmentally-friendly products from retailers, they want to know that retailers themselves are doing their bit for the environment, according to the ACRS.
Consultants like Village Green can help a business put their best green foot forward. Chief executive Doug Smith says green retailing can actually save money, with financial savings often identified during an audit. He says a business can start being greener by simply creating a checklist of all their electronic devices and making sure they're turned off when not in use.
Turning green also presents an opportunity to get some market leadership. "Telling consumers you're green can in turn attract new customers," Smith says.
But steer clear of green washing, which refers to green claims that mislead consumers. To stay out of trouble, make sure all environmentally-friendly claims can be substantiated.
4. Be all things to a few people
Retailers crafting their own very specific niche are also having considerable success. Melbourne's Mag Nation is a prime example. The retailer stocks only magazines (including hard to get titles) from around the world in a move that's proven hugely successful.
Stores like groovy stationery retailer kikki.k, pyjama king Peter Alexander and bag retailer Crumpler are also successful niche operators.
Sahil Merchant, Mag Nation's founder says the key is to think outside the square.
"We did our homework and found that niche publishers would kill for support and help from newsagents but many aren't getting it. A lot of people in the magazine industry like us because we're shaking things up, which is what finding your niche is all about."
5. Value goes beyond the dollar
Value is increasingly important to consumers, particularly in the current economic environment. As such, bargain hunting as a pastime is increasingly popular, according to Sydney research and strategy consultancy, The Seed.
"Bargain hunting is a status symbol. And those looking for a bargain are just as likely to be high earners as battlers. Even at the low end of the market, good value should be at the core. Cheap doesn't have to mean nasty," founder Sean Adams says.
But value extends beyond the dollar. In-store experience, advice during the purchase, a warranty or a return policy can represent value to consumers.
6. Make your windows talk
Bright window displays can capture attention in a busy shopping mall, but with the use of technology, you can go one step further.
Stationery retailer Smiggle has upped the ante with the use of huge plasma screens playing eye-catching images in its windows, according to retail expert Stephen Saunders of The Shoppologist. He says windows can be used to create a sense of theatre.
"What Smiggle has done is by far and away the best use of plasmas screens that I've seen. I've watched shoppers walking past the store do a double take."
Retailers should consider hiring a talented visual merchandiser to create a professional look in the front windows. Make sure the display is changed regularly.
7. Make your store inviting
Strong visual merchandising is a good start, but retailers need to look beyond a dazzling front window if they want to attract customers into their store.
A growing number of small and large retailers are creating more inviting stores by adopting softer lighting, playing appropriate music and scenting the retail environment.
Saunders says stores like Crabtree & Evelyn, L'Occtaine and Peter Alexander engage the senses. Or, consider giving shoppers a glass of champagne or a coffee while they shop, suggests Dominic Toledo, The MINT Organization's General Manager.
"Retailers need to look to differentiate themselves from their competitors on the strength of the customer experience," Toledo says.
8. Create a database of your customers
You may remember the first name of a few of your best customers, but are you able to get in contact with them if you have an offer you want to let them know about?
According to Saunders, collecting a database of your customers and communicating with them in a
manner that adds value to their life is paramount.
While direct marketing mail-outs can be hit and miss, creating an online presence (like Twitter or Facebook depending on your target market), can encourage consumers to communicate with your brand online.
Saunders says if a retailer is collecting customer details, customers expect to hear about relevant offers.
"The more contact someone has with their customers, the stronger the relationship will be with
consumers and the brand. And once you've engaged with someone online, the cost of each piece of contact is very low."
Saunders says consumers are tired of campaigns that talk at them.
"Customers want more of a dialogue these days. But if they expect a dialogue with your brand and it doesn't take place, it can be very disappointing and could cause them to go somewhere else," Saunders says.
9. Motivate your staff to sell
Understanding what motivates your staff to sell can make or break a business, according to Toledo.
Hourly wages and a bonus for the store manager was the old model, but a new progressive model has incentives attached, he says.
Staff could be rewarded if they manage to sell more than one item in a transaction, if customers have a better sales experience, or if overall profits are up at the end of the month.
He encourages his clients (who include Australian retailers) to weigh up which incentives motivate staff.
He says cash, free or discounted merchandise, educational opportunities and travel are popular choices.
"A motivation program can have a very strong role to play in changing behaviour among employees." Toledo says when asked, employees will say they want cash as an incentive, which is a left side of the brain response. A non-cash reward is a right brain response, which has a stronger emotional drive.
"To change behaviour you need to stimulate the right side of the brain. Offering both incentives together works well".
10. Name your price
Consumers will get frustrated very quickly if they're unable to locate the price of your product or service, so make sure you don't hide your prices under a bushel.
While merchandise should be clearly marked, it's just the start. A growing number of consumers research their purchase online prior to hitting the shops thanks to websites that enable consumers to compare prices on goods and services.
Price aggregation site lasoo.com.au is going from strength to strength, as is rival site getprice.com.au, which has seen an increase of traffic of more than 500% from June 2008. getprice.com.au enables consumers to search through more than one million products across 500 categories and track price history to compare prices.
"Knowledge is power when making purchase decisions, and consumers want to be able to see all their options quickly," says Chris Hitchen, CEO of getprice.com.au.er works well."
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