Effective retail strategy – more retail sales

Develop An Effective Retail Strategy – More Retail Sales

effective retail strategy—more retail sales: It’s no secret that the last few years have caused chaos for retailers globally. To survive, you need a robust retail strategy that focuses on long-term and short-term profit for your business.

According to the Centre for Retail Research total retail sales will fall overall by -4.6%. With reduced consumer spending, competition for retail marketers converting customers is tougher than ever. Marketers need the right tools, and skills, to optimize a winning digital marketing strategy and cut through the noise to convert even more customers online.

Retail strategy is usually defined as a process that retailers use to make and sell goods and services to consumers. Or, more simply, it’s how companies sell products to people. To be successful in today’s competitive market, retailers need to plan every aspect of their marketing, sales, and operations to maximize profits.

Developing a retail strategy from start-to-finish is now a crucial part of doing business in this sector. This guide will give you a template for developing an effective retail strategy. It will begin by outlining the key elements and core marketing strategies that you can implement in your planning. From there, it will highlight specific aspects of retail planning, and it will end by discussing some of the common challenges faced by modern retailers.

Of course, the rise of online is another major factor that has influenced the way consumers shop. Amazon, in particular, has single-handedly changed the way we think about and experience shopping. We now expect products at low prices, delivered quickly, and at a convenient time and place.

So, with changes in customer sentiment for shopping in-person, and increased martech retail ability, online retail has rocketed, as can be seen in the chart below US e-commerce as a percentage of all retail.

Although Amazon, Apple, and other online-only retailers are impacting physical retail stores, this by no means explains the overall decline (note that John Lewis, Tesco, and Marks & Spencer are three of the largest online stores in Europe). The conversation should be less about how you compete online with Amazon and more about how to build a strategy to complete with retailing as a whole.

effective retail strategy: more retail sales: Stand out and make a difference

In 2018, Forbes’s Steve Dennis declared that it isn’t physical retailing but boring retail that’s dead and that this is a result of brands getting stuck in the middle. Whilst this was once an area of strength (consider British Home Stores or Woolworths, selling a huge range of products all under one roof), being something to a lot of people but ultimately not much to any of them is now a recipe for a broken retail strategy.

The key to success in retail today is to build into your strategy something to add value in ways that others simply can’t. If you want to attract prospective customers into your store (online or offline) you simply have to provide a differentiating advantage and a unique retail experience. Brands such as made.com and Fartech are now opening physical stores, and Joules, Pets at Home and Screwfix are all retail winners.

According to Will Lockie, Global Head of e-commerce at Georg Jensen, retailers today need to think about how they can both find and execute an advantage over the dominant e-commerce giants such as Amazon. To do this, brands need to three-step approach:

Step 1: Focus on your hygienes

Before you can start thinking about implementing anything truly different from the competition, you must first take a close look at what you’re currently doing and ensure you are doing the basics well. The 2015 world cup winning All Blacks team is regarded as one of the greatest of all time. But it’s widely agreed that the key to the New Zealand team’s remarkable success was their ability to do the basics well.

Consumers today expect a baseline level of capabilities from retailers (e.g. ‘table stakes’) so it’s important to get these right:

• Quick and flexible payment options.
• Detailed product information, including story, design, and origin.
• Fast and convenient delivery options.
• A distinctive, joined-up brand experience across multiple channels.

If you don’t get these ‘hygiene’ factors right you’ll be on the back foot, whereas success in this area will give you a platform to layer on additional capabilities. Will Lockie provides some helpful principles to follow when evaluating your choices:

• Focus on what works for your brand
• Simplicity and convenience always win
• Remove any barriers so you are ‘easy to shop’
• Focus on solving customers’ problems
• Be distinctive

Step 2: Cultivate a retail strategy to outpace the competition

Mastering the basics will give you a solid foundation, but in order to really stand out from the retail behemoths, you need to have a compelling brand story that can work over the long-term. This is something that McCann identified as part of their truth about retail research when they talk about creating meaningful retail relationships.

Being clear about your brand purpose and point of difference is key to attracting customers and reminding existing customers why they already shop with you. Think about the space you own as a brand that differentiates you from everyone else.

WHSmith is often seen as a dull, tired UK retailer. And yet Smiths, a British institution, is actually a major high street success story. The rise of Amazon, so damaging to brick and mortar retail, should pose a major threat to WHSmith’s sales of books, magazines, stationery, and gifts. Yet the brand has seen major growth by owning the travel sector (just consider Smith’s prevalence in airports and railway stations).

To compete with the major retailers, Will Lockie recommends asking the question, “what can’t Amazon do?”

• What value can you add without discounting?
• What additional content can you include about your products and/ or services?
• How can you weave storytelling into the customer experience?
• What unique customer insight or data can you leverage?
• What utility can you provide to customers? How can you solve their problems and be genuinely useful as a brand?

Marks and Spencer’s complimentary bra-fitting service and Starbucks’s order and pay service are two examples of brands being useful for customers by serving that core purpose beyond ‘selling’. What can you do to be useful for customers in a new and different way?

Step 3: Achieve customer-first alignment

Being ‘customer first’ is easy to say but very difficult to do (and maintain consistently) in practice. It’s a mantra you’ll hear every brand recite, yet to be truly customer-first, you need to get the basics right, find a point of difference and genuinely listen to your customers.

Will Lockie sums this up nicely: “Customers don’t choose a product or service based on what you tell them, but based on what they experience”. This means that understanding and measuring customer satisfaction, listening to customer feedback and building these principles into your systems and technology are becoming increasingly important.

With 86% of consumers willing to pay more for better customer experience, retailers who ignore the voice of the customer will find themselves at a significant disadvantage.

Core Elements of effective retail strategy: more retail sales

As you begin to outline your retail strategy, you must understand the four key elements of an effective marketing plan. These include objective setting, customer identification, strategic planning, and implementation.

Objective Setting

Your first step in establishing a marketing strategy is setting your objective. This phase determines what you want to achieve and sets a timeline for completion. The goals you establish should be specific and attainable. Specific objectives outline a clear measure of success, and attainable ones can be realistically accomplished in your set timeframe.

To understand how to best set objectives, suppose that a retailer wants to increase sales of a particular product. “Sell more product X” is a poor goal because it does not provide a way to measure success or a clear timeline. Instead, your objective should read something like, “increase sales of product X by 50% in one month.” This statement sets a clear standard (a 50% increase in sales) and a timeline (one month).

Customer Identification

Next, you need to identify your customers to market to them. This step involves gathering and analyzing market data to determine who is likely to buy your product. A convenience store, for example, will look at local demographics to understand its target market. You can find this data through internal research, existing data, and government websites. Then, you can use the information you find to paint a picture of your target audience. Gaining a thorough understanding of who your customers are will help you better understand how to best sell to them.

Strategic Planning

After you have set an objective and identified your audience, you can begin strategic planning. You can begin this phase by assessing your resources — the time, tools, and budget that you have at your disposal. This step is crucial to forming your plan because it can determine which strategies are most realistic. Once you have assessed your resources, you can begin laying out a chronological plan of action. This plan will include necessary steps before, during, and after execution to ensure your strategy’s success.

Implementing your Plan

Finally, you will implement your strategic marketing plan. Throughout implementation, you will need to troubleshoot problems as they arise and adjust your plan as needed. You will also need to collect and monitor data to see if your plan is working as anticipated. If your plan is not succeeding, then you want to identify that early in the process so you can make changes as needed to attain your objective.

Powerful Retail Marketing Strategies

In the planning phase of retail strategy, you will need to decide on a marketing plan that will achieve the objective that you originally set. Retailers have many powerful marketing strategies at their disposal. Some of the most powerful strategies include social media marketing, spatial merchandising, boosting employee morale, and competitive pricing. The most powerful strategy for your business will depend on your objective and your circumstances. For example, if your prices are already competitive, then using a pricing strategy might not be your most effective option. You should therefore consider the benefits and drawbacks of each strategy before deciding which is best for your company.

effective retail strategy: more retail sales: Social Media Marketing

Retailers need to make sure that they are using social media ads to their fullest potential. A brand needs to isolate its target audience and market on the channels that its audience actually uses. You can also use this information to pay for advertising that targets demographic groups and geographic locations. Additionally, your company should foster organic brand interaction on digital platforms through resources like Facebook Groups.

Spatial Merchandising

Reorganizing your store layout is another way that you can boost sales. Retail merchandising principles, such as placing impulse buy items by your POS, can raise your revenue with little cost to your business. This strategy will be discussed more in-depth in the next section.

Raising Employee Morale

Your employees are the most important part of your business. Happy and healthy employees sell more effectively and can be your biggest promoters in the community and on social media. Increasing pay or benefits can therefore help you increase your sales numbers. Companies also gain good PR from raises and new benefits, which further boosts your marketing strategy.

Competitive Pricing

Slashing prices is a great way to bring more customers into your store. As inflation makes consumers more aware of their spending, a good deal becomes increasingly difficult to pass up. Sales and promotions help get customers in the door, and during these promotional periods, retailers often profit from selling items that are not at a discount alongside sale merchandise. This strategy also has the benefit of clearing out inventory before new shipments.

Using Store Design to Convert effective retail Strategy—More Retail Sales

Retail merchandising is one of the most powerful marketing strategies available to companies. Retail merchandising involves using your store design and various displays to covert sales. In general, you want to create an inviting ambiance in your stores that invites customers to take their time browsing. You also want to lay out your floorplan ergonomically to match your natural flow of traffic and give shoppers plenty of personal space.

Using your store design to increase revenue also involves product placement. Your new arrivals and displays should be at the front of the store to ensure that every shopper and passerby can see them. In the back, you should place sale racks and your most popular items. This encourages customers to see all of your products, even if they are only shopping for sale or specific items. Finally, you should always place a variety of add-on and impulse buy items near your POS to further increase sales.

Attracting Customers who will Pay Full Price

Another important element of retail strategy is attracting the right customers through good marketing. In retail, the right customer is one who will pay full price for your products. These strategies will help you court this clientele:

• Use targeted ads,
• Create lifestyle appeal,
• Build your brand,
• Establish scarcity around your product, and
• Normalize higher prices.

Most importantly, you will need to be willing to deal with rejection as you build a strong customer base. To win the right customers, you need to be willing to part with the wrong ones.

Streamlining your Sales Process

Successful retail strategies also include methods of streamlining your sales process. To improve your sales process, you must begin by outlining and identifying problems in your current pipeline. Then, you can implement solutions such as:

• Redesigning your physical and digital space,
• Utilizing CRM software,
• Introducing loyalty programs, and
• Improving employee sales training.

An efficient sales process is a key element of both customer and employee satisfaction. Your retail strategy must therefore address problems within it to achieve success.

Retaining your Customers

Customer retention is one of the top problems that retailers face. When people start to shop elsewhere, your profits suffer, and employee morale declines. Fortunately, there are many strategies that you can implement to keep your customer base happy, including:

• Loyalty programs,
• Price reductions,
• New products or services,
• An updated website, and
• Improvements to customer service.

To determine how to best improve your customer retention, you should use satisfaction surveys. These give people the opportunity to voice their opinions about your business, and you can use this feedback to target areas for improvement.

Common Problems with Retail Strategy

Finally, when building your retail strategy, you will need to anticipate common problems and understand how to address them. Along with customer retention, one of the most challenging aspects of your strategy can be creating a continuous experience for customers across online and in-store platforms. For example, a customer who sees an item listed as in-stock online will expect to see it in your store. This issue can extend to your marketing strategy, where managing omnichannel platforms is a major challenge for retailers. Between Instagram, email blasts, and traditional media, retailers must carefully design their marketing content to fit the appropriate platform.

Businesses must also contend with issues that fall outside of their control, such as supply chain management. In these circumstances, you will need to anticipate problems ahead of time, develop contingency plans, and use your own resources to find temporary solutions. Problem-solving is a key element of retail strategy, so you should outline potential challenges and form plan B.