There is no sugar coating it, 2020 has sucked for retail. So what now?
History shows us that after a significant downturn, new successful strategies and opportunities surface in ways not previously utilized. NOW is the
time when retailers should be strategizing on how to be more successful. Darwin is knocking on your doors, it’s adapt or perish. The MINT team has spent hundreds of hours collaborating with industry experts, clients, peers and our own personnel about the keys to success for retail going forward. There were two core messages that were consistently voiced by all. What continues in this article are these two strategies with specific details on what should be done to succeed.
COSTS MUST BE REDUCED, IN STRATEGIC WAYS
Retailing in 2020+ requires lower overhead and costs of customer acquisition. The first place to start shaving costs is with the retail store itself. We have entered the era where smaller is better. The days of having large stores full of products are being replaced by smaller, experiential environments. The fastest growing customer segments embrace and actually prefer brands who deliver these types of environments. The outcome of this strategy, when accompanied by the right tools, delivers measurable reductions in costs.
• LOWER RENTS
Smaller spaces= lower rents. As part of this strategy, negotiate rents that are weighted on sales, creating a win for retailer and landlord together.
• REDUCE BUILD OUT COSTS
Smaller footprints mean less initial development costs such as finished construction, displays & more.
• FLEXIBLE RETAIL DESIGNS
Create an environment that is modular so you can scale the size and positioning of your displays and merchandising
• REDUCED PAYROLL
With less space & more technology, less retail employees are needed.
• LOWER INVENTORY LEVELS
Carry the main sellers, and offer free next day shipping for other items. By including e-commerce apps like Endless Aisle, customers can view and purchase all your products on interactive displays in the store.
• SMART STAFFING
The best salespeople working the busiest hours will maximize profits and reduce the cost per transaction. Shiftlab is an example of a performance-based provider that uses technology to achieve this. https://shiftlab.io
“Due to changing traffic patterns and new customer experiences, every interaction counts more than ever, stated Mitch Black CEO of performance-based scheduling company Shiftlab. Retailers who optimize labor, using a platform like Shiftlab, ensure they have the right staffing to meet changing business trends and can easily adapt to additional shifts.”
— Mitch Black, CEO of Shiftlab
• LESS TRADITIONAL ADVERTISING, MORE SOCIAL MEDIA MARKETING
It’s more effective, costs less, and consumers prefer it.
Having an effective BOPIS solution maximizes sales with omni-channel customers and reduces costs. https://experiencemint.com/social-distance-shopping/
• OP-EX OVER CAP-EX
Work with vendors who will allow you to pay for the up-front infrastructure over time. This protects cash flow and allows you to re-invest profits faster. https://experiencemint.com/financing-mint-365/
• USE RETAIL ANALYTICS
Retail analytics delivers a proven ROI and results in the most effective staffing, merchandising marketing and operations.
MONEY SAVED. NOW INVEST SOME TO INCREASE SALES!
The positive news for retailers is that an investment into experiential environments is yielding a definite ROI. It’s needed to maintain connectivity with the most influential buyer segments AND results in longer visits, repeat visits, increased sales and brand loyalty.
“The desire for retail experiences is on the rise with millennials
saying 52% of their spending goes on experience-related purchases.”
— storefront.com (link)
• EXPERIENTIAL ENVIRONMENTS
Invest the savings described in this article to deliver a true experiential environment that customers crave. You will see an increase in traffic, sales
and brand loyalty. These experiences must be unique, even unexpected so
the brands stay memorable.
• EFFECTIVE SALES TRAINING
Your retail sales team is one of you most important assets, investing in experiential sales strategies will result in an ROI!
Bob Phibbs, an industry leader & CEO of the Retail Doctor (a New York based consultancy), recently shared this about the importance of sales associates.
“With Covid dramatically reducing consumption and visits to store,
shoppers will be getting most product specs online. Once inside the
physical environment, they can be upsold and added on by an associate
with emotional and soft skills to compare and contrast, become a trusted advisor, and close the sale. Without it, you’re just wishing and hoping the merch can do all the work. It can’t.”
• BE AN OMNI-CHANNEL RETAILER
Retailers like B8ta not only deliver a great customer experience but they use technology to connect with consumers before they visit a b8ta store, and maintain that connectivity after. Sticking with a consumer through their purchase lifecycle and beyond is a must to
succeed in retail today.
Customers have embraced and expect a turn-key solution where they can buy online and pickup at their local store that day. It appeals to both the convenience and health concerns and seems to be here to stay. On a bright note, It is the new way of shopping that amazon can’t
• E-COMMERCE & ENDLESS AISLE IN RETAIL
E-Commerce solutions are not just for purchases made outside brick & mortar. In some environments, consumers have shown to actually prefer a self-service solution. Additionally, giving customers the chance to browse all your products & services via interactive displays increases purchase revenue and time spent in your stores.
• SOCIAL MEDIA INTEGRATION
Social media has become one of the most powerful marketing tools available to
retailers. Engaging customers to your brand before going to brick and mortar and continuing that at your stores is a must. There are very creative and effective methods of using social media on the retail floor. Using social media this way will turn your customers into your ambassadors, prompting their networks to patronize your store as well.
• RETAIL ANALYTICS & BI
Using intelligence to improve merchandising, marketing, sales, staffing, customer behavior & more.
• BEACON TECHNOLOGY
Beacon technology has reached widespread adoption rates and its proximity marketing capabilities will continue to be an effective tool at retail. Using technology that seamlessly connects with our personal wireless devices and delivers meaningful offers and invitations to an experience is welcomed by today’s shopper.
• VIRTUAL REALITY & AI
Technologies like VR and AI can be the ultimate engagement tool and create permanent memories about your brand. There are very creative and cost effective ways to use these technologies that will make customers “stickier”.
There is a growing concern (thankfully) with sustainability being a focus for retailers. Consumers are showing increased loyalty to brands who execute true sustainability practices.
PROOF THAT IT WORKS
A great example of a retailer implementing many of these strategies with proven success is Toys R Us. This iconic brand transformed their
business model by reducing their footprints from 40,000 Sq ft to 5000 Sq ft and invested into experiential technology and strategies that consumers love. The end result is higher traffic, higher sales, and soaring brand loyalty.
Case Study: Toys R Us. https://experiencemint.com/portfolio/toysrus/
Andrew Pierce is the CEO of MINT, a team comprised of industry leaders and highly experienced executives in the best practices for retailers.
For more information about MINT, please visit https://experiencemint.com