The most important thing in retail
Retailers have been facing an unprecedented pace of change in the past decades. New digital retailers have been moving into traditional retail territory, and traditional shops and department stores have been hit hard as a result. Some analysts find these changes threatening, and have been heralding a ‘retail apocalypse’, referring to the closing of a large number of retail stores in the 2010’s. While the figures are grim, I would argue that essentially not much has changed. Building a loyal customer base still mostly revolves around one thing: trust.
Pricing is a genuine and relevant differentiator in virtually every market, and a lower-priced brand is likely to win out over a more expensive one in the absence of any other perceived differentiation. But in the real world price is not the only, or even the most important differentiator. When a typical consumer is looking for a specific product, and has a choice between a well-established brand, such as Amazon, and an unknown web shop that offers the same product for 10 euros less, most will still choose the familiar brand. They know it will provide them with the service they have come to expect.
Traditional retail is lagging behind
While the big online retailers are constantly upping their game in terms of service, traditional brick-and-mortar retailers are often lagging behind. They seem to think that they will never be able to beat or even match these large-scale enterprises in terms of service and innovation. They lack the creativity that is needed to create chances in the changing retail landscape and seem to be passively waiting for companies like Amazon to take over the marketplace and obliterate their businesses.
At the same time, the customer journey is increasingly being dictated by the customers themselves. Before customers reach your store, they have probably already completed more than half of their buyer journey. First, they might ask a friend for recommendations. Then they might search online, and read reviews by other consumers on specific products, brands or services. They might visit the websites of the brands you sell, for specifications and comparison of different models, and so on. Eventually, when they already have a very clear picture of what it is they want, they might want to come to your store, to see, touch and feel the product before buying.
Smart brick-and-mortar should seek new ways to engage customers, create better in-store purchasing experiences and offer new delivery models for online purchases. With the rise of web shops and retailer apps, consumers have come to expect a different kind of service and shopping experience. Seeking new ways to engage customers, retailers are creating purchasing channels beyond the physical store, blurring the lines between online and offline. Such companies realize that in order to be successful, they have to offer a compelling and trustworthy customer experience. Price, assortment and convenience will simply no longer be enough.
In the end it all comes down to building a trusted brand. And for that you do not have to compete on every level with the large online retailers. For example: it is not the most important thing to be able to deliver the next day, as long as you are really clear in your communication when you will deliver precisely and follow up accordingly. If you say a package will arrive in three days at 4pm, make sure it does. A customer that took a day off to receive a package, only to find out it will arrive the next day, will think twice before ordering something from you in the future. The technology that is available to brick-and-mortar retailers to make the transition into the digital era and deliver better service, is well-established and relatively easily employed, whatever the size of your business. Retailers just need the vision to embrace it and move forward.