What is Really Happening in Retail?
Beyond buzzwords and fads
Retailers worldwide seem to be stuck in a rut for a while now. In all industry events, there is one talk on `How to avoid retail apocalypse` or a weekly article how things seem to be going for the worst and how the future is dire for the industry. However, these are not entirely true.
According to Deloitte, the retail or the brick-and-mortar locations is not shrinking, the spending trends are changing. If you thought it is because of digitals ascend or the rise of share-economy, it is not. It is because of a more global phenomenon – it is just basic socio-economics. Globally, as middle-class shrinks and the spending trends tips towards the extreme ends of the scale. While the sales of the mid-priced retailers are declining, luxury and discount shopping is growing incrementally. Deloitte reports that contrary to popular belief, brick-and-mortar store opening is not down but actually up.
All the data suggesting the terrible end of, especially brick-and-mortar retail, is highly selective and can be misleading depending on the reader’s point of view. With the newfound optimism in the retail industry, let’s summarize it as `transformation` rather than building upon doomsday scenarios.
Is Digital Really Killing Physical?
As long as the physical world lives, there will be a need to interact physically. According to retail consultant duo In-Between, customers find shopping experiences boring 70% of the time. Hence, big-name retailers such as Best Buy and Target are focusing on redesigning their stores instead of adding new locations and putting emphasis on retail analytics more than ever. It’s important to be able to give the customers what they cannot find online.
Michelle Bacharach, the founder of FindMe which is a `complete the look technology`, telling customers how to create the best combinations for the products they buy, reported that when customers are told what products to buy, they purchase 200% more. It is not only recommendations but also what you are offering. That means merchandisers, who curate the assortments becomes more important actors, supporting your story and staff behind the scenes.
Let `Context` and `Curation` be your next buzzwords and create a meaningful story for your brand because it is not about what you sell anymore, it is about the story you tell.
Is Spending More on Marketing the Answer?
One of the quicksaves that retailers opt for is spending more on marketing, but do they really need to? In the era of virality and organic growth, spending more on ads or paid marketing, in general, may not lead to salvation after all.
Cosmetics company Lush, has reportedly has not allocated a marketing budget that its competitors have for a few years now. Instead, they have created a brand story – through their customers and employees, who are Lush’s customers as well. First of all, employees are encouraged to experience the products and with the help of the marketing department’s support, they are encouraged to communicate the right messages to the customers.
On the other hand, customers or the cult followers as they are dubbed in the media are the true marketers for the brand. They love to use the products and cherish their experiences by sharing them on social media, not only creating a love brand but they also help recruit new members.
Physical Still Rules
All the changes you are willing to make on your business growth is directly tied to your customer experience, especially once they are inside your store. The story will only take your customers to your store, the rest of the success lies in the experience.
Store managers and employees have more on their plate now. Online order fulfilment and in-store pickups have become their almost daily chores on top of customer support, restocking, etc. That means, now your online customers are coming to your stores as well and that puts more emphasis on your brick-and-mortar experience.
Yes, experience economy has changed the definition of a store and shopping is more spiritual than ever and you cannot expect your visitors to look past your flaws and love your brand regardless, just by telling them a good story. Your customer experience still what matters and now retailers have more than one platform to serve customers -digital, social and most importantly physical.
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