During the National Main Street Conference, attendees are often exposed to “future trends” that allow us to better prepare businesses to take advantage of emerging opportunities and to avoid emerging threats. Instead of focusing on ethereal “leadership” or “positivity” sessions, Main Street staff and volunteers are exposed to more nuts and bolts approaches to creating positive change through business enhancement, design, promotion, and organization. One of the sessions staff attended dealt with emerging trends in the world of retail. Some emerging trends include:
Disruption- This word is getting thrown around a lot, but it essentially means giving the customer a better experience by eliminating barriers between the product/service producer and the actual consumer. The old multi-tiered inefficient hierarchical supply chain for retail, or in the service industry “paying someone, who pays someone, that pays someone that actually produces something” has been replaced by a one-to-one relationship. In-store experiences, when coupled with mobile/web technology have allowed more direct consumer contact. Maintaining relationships on-line can form loyal consumers and long term sales conduits.
Web Rooming- More consumers are looking to the web to research or “pre-shop” items available at stores, and then visiting a store to finalize their purchase decisions. A well designed retail web site can highlight product availability, sizing, and other information relevant to consumers that can justify a visit. Consumers that regularly “web room” retailers are more susceptible to add on sales.
Show Rooming- The opposite of web rooming, show rooming consists of consumers that see items in a store but prefer to make their purchase on-line. Maintaining communication with customers and matching in-store customer service with on-line convenience can ensure that a show rooming customer buys from you. Adjusting your tags/labels so consumers can’t search out the exact product, while maintaining relationships with vendors that emphasize consistent retail pricing (both online and in the store) can make sure your “clicks” and “mortar” sales work in concert.
Consumer Wants- A series of national surveys revealed some “wants” that help consumers decide where to spend their disposable dollars, including: 29% want stores to match on-line and in-store prices, 35% make decisions based on who provides better customer service, 14% want staff available and mobile (not stuck behind a counter), 10% want store staff to have access to inventory and special order capabilities, 30% want relevant/convenient/personalized loyalty programs, and 19% want more choices and flexibility within return policies.
New Opportunities- Testimonials are still effective for consumers. Sixty percent of shoppers are more likely to buy a product when they find positive online reviews in a mobile format. Fifty-five percent of shoppers are willing to sign up for loyalty programs in a store if they get immediate benefits. Thirty-one percent of shoppers want to interact with their favorite stores on social media (interact means have a conversation, not just view your post).
Customer Communications- Collecting customer information is a must for businesses seeking long term relationships. However, data is just half of the equation; what you do with the data allows for organizational success. Training knowledgeable sales teams that recognize customers can inspire loyalty. New product introductions and samples can enhance consumer connections with your inventory. Creating individualized “after hours” opportunities or custom store events elevates the exclusivity of your brand. Follow up “notes” after interactions can reinforce sales or contacts.
Focus Shift- Older consumer models treated a retail storefront as simply a “pick up point” for goods. The model was built to focus on an industrialized model to create efficiency in movement and distribution. The new(er) focus is “customercentricity”, which essentially means putting the customer first in all things. Integrating social communication integration, doing things to make each customer feel “special”, prioritizing great social skills with sales staff (not just a warm body), offering “off hours” shopping for special customers, and extending hours to offer convenience all show the customer that they come first. In the United States, 70% of all retail sales take place after 5:00 p.m., so even if you have to start your day later, it’s generally worth it to extend your hours. You won’t see an immediate bump in sales, but it will come in time.
Engage the Omni-Channel- Sales don’t simply happen inside the modern store. They happen on- line through your website, via social media, or at events. In a fourteen month study from June 2015 through August 2016 of 46,000 shoppers, Harvard Business Review found that 73% of consumers used multiple media, online, and in store channels to determine their purchase. If your web site, social media, and store aren’t in sync, you may be missing out on the largest part of the market.
In-Store and Out-of-Store Events- Some businesses create additional traffic and sales by hosting “wellness activities” like yoga or tai chi on off hours. Workshops, allowing complimentary businesses to “pop up” in your space, pet events, wine/beer tastings, and art/craft based events can help generate exposure. You need to find ways to convert participants into customers to make the effort cash flow, but these are good “in-store” advertising options. Outside your store, you need to find ways to “own” categories of activities consistent with your brand by having a defined presence at the events. For mass events that include people from outside your general market area, a booth can act as an educational resource and a way to push customers to your physical location.
Get Ready for Right Sizing- The supply chain for most businesses is short enough that massive showrooms and storage areas are no longer necessary for retailers. The square footage for retail institutions is shrinking, and many retailers are sharing space or “incubating” complimentary businesses inside their shop in a vignette format. You can derive “rent” income and increase your “inventory” by partnering with businesses that can draw more potential customers to you. The ugly side of right sizing is the recognition that we simply have too much commercial space in the United States. To put things into perspective, the U.S. has 7.3 square feet of retail space per capita. Japan and France both have 1.7 square feet of retail space per capita. The United Kingdom has 1.3 square feet of retail space per capita. For too long, cities have engaged “sprawl” based development techniques that generate vacancies, encourage dilapidation, and cause new developments to inevitably fail. Smart retailers will find multi-function areas close to anchors (areas that have multiple business types next to non-retail traffic drivers like a university or a courthouse) to encourage stable traffic and affordability. Smart communities will choose to invest in their core to create one “great thing” as opposed to diffuse “meh” developments sprawling throughout a city.
Successful businesses have to work smarter and harder than ever before. By recognizing some of the trends listed above, and seizing opportunities that the data points to, your business can ascend in a challenging market environment. Mid sized chains, and larger retailers that refuse to alter their business strategies will inevitably decline as trends take hold in the Midwest. Entrepreneurs that invest in strategies to capitalize on consumer trends have an awesome opportunity to gain customers, increase sales, and enjoy success.