The Paradigm Shift in Retailing: Part 2

The Paradigm Shift in Retailing: Part 2Last quarter we talked about the new paradigm in retail, where consumers have more choices and more information than ever before. Smart phones and other technology advancements have led to higher expectations in terms of pricing, availability and buying options. We discussed ways for retailers to take action, including advanced customer services like tracking customer purchases to offer “no-receipt” returns, targeted discount campaigns and more responsive and proactive staff. Other retention methods include up-selling as well as offering add-on services and e-commerce options.

The world of retail has changed, and store owners simply can’t compete without committing to embrace new technology and focus on outstanding customer service.
This quarter we’ll focus on these two key areas of customer retention. After all, only your customers can increase your sales, and if you don’t take care of your customers, someone else will.

Focus on selling

While this may seem obvious, the reality is that many store owners and managers are so caught up in the day-to-day operations that they’re unable to focus on building the business. Tasks like ordering, purchasing, and stock checking can be automated to free up time to connect with customers and explore more effective marketing techniques.

Remember, the only way to grow a retail business is through product sales. This is accomplished by attracting more customers to your store, and selling more products,
more often.

Maximize customer loyalty

According to a 2009 BtoB Magazine article, “Acquiring a new customer costs about five to seven times as much as maintaining a profitable relationship with an existing customer.” Loyal customers who have a good experience in your store (good service, good selection, and good prices) will ultimately recommend you to others, pay
higher prices, and drive further to shop with you.

So how do you encourage customer loyalty? Shotgun marketing approaches are hit-and-miss (at best), and tend to be costly. One of most effective methods for increasing ROI is a frequent shopper program. Customers feel a sense of belonging and are motivated to return more often and spend more. These programs provide customers with a personalized, more convenient shopping experience while providing the retailer with data on shopping habits that can be used to target marketing dollars and meet customer needs more effectively. These types of marketing campaigns tend to cost significantly less money and yield far better results.

Reduce and expand

“You can’t sell from an empty wagon.” We’ve all heard it, and it’s certainly true for retail. While product breadth and depth is crucial, it’s also important to free up shelf real estate. Eliminate products with little or no turnover and make room for the high-movers.

Consider re-evaluating your inventory-stocking practices. Sometimes paying a higher per-item price for slower movers makes you money in the long run by freeing up dollars for faster or more profitable movers. For an in-depth case study detailing this concept, click here: .

Define a growth path

Map out a plan for growing the business. This doesn’t have to be complicated or time consuming, although the more detailed your plan is, the better your chances for success. Simply writing down two or three big goals (and the purpose behind them) for the coming year is a great start and keeps you focused on the big picture. Then, take each goal and break it down into concrete, attainable, measurable milestones. Share your vision and goals to get buy-in and enlist the help of your staff to reach your goal. Track your progress and celebrate your successes!

Charles Owen is a Business Alliance Executive with Paladin Data Corp. Drawing from his 30 years of experience in retail sales. He recently shared this presentation on the paradigm shift in retailing and how store owners can take advantage of it to improve their retail operations, profits, and customer loyalty. A link to his full presentation is available on our website at http://info.paladinpos.com/Orgill_SeminarFeb2014.pdf.

Leave a Reply

Your email address will not be published. Required fields are marked *