What Should Retailers Start Doing Today to Keep Sales Up Tomorrow?
The gap between the digital and in-store shopping experiences is growing wider and it’s becoming a serious problem for brick-and-mortar-businesses.
“Thank you for Shopping with Amazon”
In a cynical gesture, one of the oldest UK-based camera chain Jessop’s has put up a sign on their now-closed store windows. It read
“The Staff at Jessop’s would like to thank you for shopping with Amazon. Dodging tax 1% at a time.”
They are not the only ones, feeling the destructive power of online stores and e-commerce sites. There are already a number of industries from music to media publishing, from toys to shoes, from travel agents to electronics that found themselves challenged by their online competitors. Very few of these companies have made the smooth transition without considerable pain.
Many are still struggling.
How Is Customer Shopping Behavior Changing?
There are two main patterns that characterize consumer behavior when it comes to switching from offline to online platforms.
These actually underline the biggest gaps that offline stores will have to address in order to improve the retail experience, maximize their sales and increase their market dominance.
Pattern #1: Searching Online, Buying In-store
65% of U.S. shoppers research products and services online and then make a purchase in-store. (Source: Cisco, 2013)
On a physical level this pattern indicates that many traditional stores have not effectively integrated the “multi-channel” retail experience, forcing the shoppers to do all the work in order to make an informed buying decision.
However, there is a psychological dimension of the same problem. It’s trust. Consumers put more trust into their peers’ and friends’ opinion than they do in the competence of sales associates.
Pattern #2. Searching In-store, Buying Online
43% of U.S. adults have participated in showrooming, opting for the lower online prices versus the “instant gratification” of taking a product home right away. (Source: Harris Poll, 2012)
In addition, e-commerce stores, same-day delivery policy and price-comparison apps slowly but inevitably convert big-box stores into “showrooms” for online competitors, like Amazon and eBay. Competing with these online giants solely on the “lowest price” base is a risky strategy.
It makes a lot more sense to focus on enhancing in-store retail experience, by incorporating most-effective online tools in offline marketing strategy.
Good Retailers Borrow, Great Retailers Steal
Instead of trying to stop customers’ migration to the digital and mobile domain, brick and mortar retailers need to follow Picasso’s advice by “stealing” the best practices of both worlds and enhancing these features even further, by seamlessly incorporating them in real-life stores.
Here are the 3 Things that online retailers are getting right, but retail stores still struggle with.
Know Thy Visitor
Real-time web analytics allow marketers and webmasters to effortlessly collect consumer data (such as location, demographics, order history), continuously track visitor behavior, and therefore, boost the efficiency of their marketing campaigns.
Recommendations, bundling, cross-selling and up-selling algorithms actively used by the vast majority of e-commerce sites and online companies, make it easy to identify in real time, products and services that have the greatest potential for an order uplift.
Similar “face-detection” technologies are available for online retailers, yet just a handful is making use of them.
Think ‘Less is More’
While many traditional retailers are investing millions of dollars in guaranteeing Ritz-Carlton customer service and increasing the number of in-store sales associates, online businesses go minimal. In fact, having almost equal revenues of $5o billion in 2012, Best Buy has twice the number of employees than Amazon does. But does it really add to customer service satisfaction? Best Buy’s sales say otherwise…
Many brick-and-mortar businesses realize the importance of investing in innovative solutions, connected products and emerging retail experiences. Yet most of them feel they need help “framing innovation” and switching from “Big Idea” marketing campaigns to smaller, ROI-positive solutions that can be quickly tested, improved on and applied on the larger scale.
“Tailor” Your Marketing Message
Dozens of online companies and social networks, including giants such as Google or Facebook, have created some very efficient practices, using tracking tags. Every marketing message, every offer or ad that online users see is based on their demographics, browsing and searching habits. Customers are getting used to seeing RELEVANT upsell suggestions, discounts and content that targets their highly specific problem. They expect traditional retailers to do the same and get annoyed by those who fail to deliver.
According to CMO Council, 54% of US and Canadian consumers would consider ending their loyalty relationships if they were not given tailor-made, relevant content and offers.