Sharing the Pie with Online Retailers
Develop a strategy to stay competitive.
The largest shopping center in the world exists online—just inches away from your customer’s fingertips. Despite that fact, the upside potential for brick-and-mortar shopping is bright as long as you keep in mind what you’re dealing with.
Although online purchases account for a growing percentage of retail sales, “about 80 percent of consumers still want to browse and shop in-store,” according to a report in The Wall Street Journal.
While the number of consumers who have never purchased anything online has dwindled during the past five years, Kantar Retail ShopperScape reports that “roughly 22 million households didn’t use (Amazon) in 2016.” Research has also found that online purchases have a return rate of nearly triple the in-store purchase return rate.
Remember the old adage, “Keep your friends close and your enemies closer.” That advice couldn’t be truer than when dealing with online retail. There are a number of strategies smaller retailers can do to compete effectively with online sellers.
The days are gone when the store owner simply put goods on display, unlocked the front door and rang up annual sales increases. If this is your current merchandising and marketing strategy, you are undoubtedly going to have a difficult time thriving in today’s fast-paced retail world.
Customers today demand an experience. This can be anything from tastings for a wine shop, trunk shows for an apparel or shoe retailer, to product demonstrations and clinics for an outdoor or sporting goods operation.
Authors speak at book stores, and artisans might discuss their work at gift stores. Whatever you are selling, it is imperative to create excitement for your product and a connection with your customers through the in-store shopping experience. Remember, the “sizzle” is just as important as the steak—everyone has steak.
The more sensory the experience, the more spontaneous the buying. Don’t believe me? Walk through a Costco store on a Saturday and see how many product samplings you are offered. Even the most disciplined shopper among us has fallen prey to this marketing tactic.
Some gift and home stores burn scented candles in the store. This hands-on approach of seeing, touching, tasting, smelling and even trying a product gives the brick-and-mortar retailer a huge advantage over the online competitor.
Car dealers are masters at promoting not only through the senses, but also by using emotional appeals. The experience begins with your visual attraction to the automobile’s sleek lines, then goes on to the new-car smell. The next level is how you feel sitting in the driver’s seat. Finally, there is the test drive, coupled with the salesperson’s appeal that “you deserve this car” or “this baby could be sitting in your garage tonight.” Once you have succumbed to the power of this sensory and emotional maneuvering, you’re an owner. All that’s left to do is the paperwork.
Personal interaction with another human doesn’t—and can’t—happen online. That gives you an advantage. But, remember that people buy from people they like. Keep that in mind when you are interviewing sales associates. Do you like them? Are they friendly and outgoing? Are they effective communicators? Do not put someone on the selling floor just to have a warm body there. It’s simply too expensive these days.
Become the local expert in your industry. One outdoor store’s motto is “Ask Us – We’ve Been There.” Whether the activity is camping, hiking, boating, climbing or back-packing, this store hires local experts who relate to how the customer is going to use the product.
Think about it: Would you rather buy a pair of running shoes from someone who hasn’t run a mile in his or her life, or from someone who goes for a daily run?
Know the Price Points
When it comes to pricing, brick-and-mortar retailers should know the online prices for what they sell. Becoming familiar with competitive pricing information includes shopping not only at other online retail sites, but also at many vendor sites. Unfortunately, these sites often sell directly to your customers. You must at least consider offering on-the-spot price-matching whenever possible, and free shipping when it is economically feasible.
The idea that all shoppers will justify paying more to support a local retail establishment reflects what is indeed a noble intent. It may not be sustainable over the long term. About 80 percent of adults have either a smartphone or some sort of access to the internet. Today’s shopper knows what product prices will be and probably has done some homework prior to coming in your store. When you can, post current online prices next to certain items. Why not encourage your customers to do online comparisons? They’re going to do it anyway.
This is not a suggestion that you seek out and post the lowest price possible. Instead, it is a way to show your customers that your prices are reasonable and include the cost of knowledgeable and expert service, which cannot be provided online.
Capitalize on Returns
Traditional retailers also have another advantage over e-commerce-only merchants. It is the opportunity to make another sale when merchandise is returned. Use this opportunity to your advantage. You might even go so far as to stick a coupon in the bag to be used on the next trip to the store, just to counter any perceived inconvenience a customer experiences in making a return.
Fresh and New
You have one more advantage: You can give customers a “new” experience every time they visit you. Don’t forget to keep your merchandise fresh and exciting. Change the window and in-store displays weekly, and rotate current inventory on end caps. Above all else, manage your open-to-buy (OTB) and especially the inventory on-order.
Brick-and-mortar retailers always want a constant flow of merchandise landing in the store—new looks and products to excite and delight your customers. Remember: Nobody comes into your store to see what came in last year.