We’ve all seen the articles touting the doom and gloom state of the retail industry. Their titles read like obituaries: “Retail is dead”, “Major retailers closing stores”, and “The Amazon Effect and the Demise of Brick & Mortar.” Retail’s death has been predicted numerous times, yet close to 90% of all purchases still take place in a physical store location. And analysts are predicting that even by 2020, between 75% and 85% of all purchases will still take place in a physical store. Brick and mortar is clearly not going anywhere. Still, most retailers have felt the impact of the widespread changes in customer behavior. Shoppers are researching their planned purchases online prior to buying in a physical store and increasingly making purchases online.
Thirty years ago, a common mantra that retailers followed was the 4 Ps: Product, Placement, Price, and Promotion. Today, it seems more to be about the 4 Cs: Customers, Controllables, Commitment, and Core.
Customers today hold the power. Everything is transparent now. They know what you’re offering online. Heck, sometimes they know even before your store teams do!
Today’s customers are savvy. They have the ability to purchase just about anything they want without ever having to place a foot inside a physical store. Yet the majority of customers still make their purchases in a store. Why? It’s all about the experience. This can come in many different forms. Maybe they need an item today but don’t live in an area with access to a courier or a drone that can deliver to their doorstep within a few hours. Or perhaps they’re a little undecided on the exact style, color, fit, or any of the other endless options that might apply to the product you sell.
Shopping can be challenging, the choices overwhelming. Many people like to think they know exactly what they want and how much they are willing to pay for it. In reality, about 60% of the customers who enter your store can be influenced one way or the other, while 20% will buy no matter what and the other 20% will not buy no matter what. Think about those stats. If your stores are achieving only about a 20% conversion rate (customer traffic divided by number of purchase transactions), what does that say about your store teams’ ability to actively engage and sell to your customers? Not a great report card. If you don’t have traffic counters in your stores yet, it’s time to have them installed. You’re missing out on a very valuable tool that will help you analyze the quality of the selling taking place in your stores.
Customers are walking into your stores with a purpose. It’s your store teams’ job to set the stage for each and every customer to have an exceptional experience. After all, retail is a people business. Today, a retailer’s success is as much about how you sell, as it is about what you sell. There’s great power in person-to-person retail. Your associates need to have personal knowledge of, and a commitment to, your brand in order to inspire that connection with customers.
Your store teams should be able to articulate: What is your brand story? Why is your brand story important? Why should your brand story be important to your customers? – and then be able to use that knowledge to inspire the same feelings of connection for the customers who enter your stores.
Controllables might be defined as the basics. You don’t get to play the game at all if you can’t handle the basics: those mundane yet critical tasks that can shut you down if you’re not careful. For most retailers, one of the biggest expense lines on the P&L is Labor. Determining the right staffing levels based on each store’s unique traffic patterns is critical in managing this expense. Throw in the human element of having the right people in the right position, with the right skills, and anyone can quickly grasp how complicated this can get. Beyond staffing, there’s the need for a strong loss prevention program to minimize risk and theft, good operating standards to maximize efficiencies and control inventory accuracy, and adherence to whatever policies/procedures/regulations specific to your industry and to all federally and state mandated laws and requirements.
The controllables are akin to understanding the rules of the game. Everyone on the team needs to have that basic understanding and be playing from the same rule book.
Commitment to brand excellence is also key. Retailers must be vigilant in ensuring excellence in the execution of merchandising and presentation to inspire pride of ownership. Everything that a customer can see, touch, feel, hear and smell while in your store contributes to a positive experience – or a not so positive one. Consistency is critical here, especially for a brand/retailer that has multiple locations. A customer should be able to visit your multiple locations and though each physical space may be unique, they should still be able to feel they are experiencing your brand in a consistent manner, and in a manner that you intended.
Finally, the fourth C, Core, is made up of your people. Today this is the secret weapon in the world of brick and mortar retail. Having great controls and a beautiful store will mean nothing if you lack the right people. Your store employees are the brand to the customer, and your brand will only be as good as the weakest person on your team. Having employees who love what they do, who are excited and enthusiastic about their jobs will be seen, felt, and experienced by your customers. Furthermore, having managers who engage and train their teams, communicate what’s expected, hold them accountable, and celebrate their successes will create a circle of positivity that will be seen, felt, and experienced by your customers.
Think about the places you love to shop. What is it about those stores that you like so much? Is it really that they sell products that are so unique that you couldn’t possibly find them online? Probably not. Most likely, you go out of your way to shop there because you enjoy the experience. You like how you feel when you’re there. Maybe you get inspired by how the store presents their merchandise. Maybe there are a few wonderful sales associates with whom you have great conversations. Maybe the store offers free samples and you get to taste your way to a shopping bag full of yummy treats that you normally would never have even considered buying.
Now think about your own business – whether you’re the owner, the manager, an executive in the Home Office – what is your brand story? Why is that story important to you? Why should it be important to your customers?
If you don’t know the answers to these questions, you better figure them out…and soon.