Retailers are having a good year, according to Douglas Hope, VP and founder of retail trade show GlobalShop. During the inaugural Microsoft Envision 2016 conference, Hope said the U.S. Economic Census shows retail sales topped $5 trillion last year—not including automotive sales. (The Census Bureau's analysis backs this up.) And the National Retail Federation (NRF) expects 2016 sales to increase 3.1 percent.
Lest you think these gains are from the big chains—think again. According to the NRF, there are around 3.8 million storefronts in the U.S. And while e-commerce is taking hold, in the first quarter of 2016, the U.S. Census Bureau reports 92 percent of retail revenue was generated by brick-and-mortar businesses.
Giving the Customers What They Want
One of the reasons sales are soaring is that retail marketing has changed in so many ways over the past decades. This is due in part to technology, increased competition, the way consumers buy and customer expectations. At the Microsoft Worldwide Partner Conference held in July in Toronto, Karen Garrette, global director, retail industry solutions at Microsoft, illustrated the difference in consumer and retail attitudes. About 50 years ago Walter Hoving, the chairman of Tiffany and Co., told his customers, “We do not open on Sundays and we suggest you shop early to avoid the crowds." That kind of attitude would not fly today, notes Garrette. “There have been massive shifts in consumer shopping behaviors" resulting in customers with new expectations who need to be served in a different way, she says.
In fact, retailers are investing in providing their shoppers with “experiences," according to the annual State of Customer Experience report from Primary Intelligence. In their survey of 58 global customer experience leaders*, 57 percent responded that they plan to increase their customer experience budgets this year to attract the attention of consumers. Garrette says people shop “not just to acquire stuff," but to have an “experience in the here and now."
Moving Beyond the Store with Mobile
While the store is still the “hub" of customer experience, there's a lot that's happening online in general and on mobile technology in particular before a customer even thinks of walking into your store.
According to Garrette, a report last year from Google showed 45 percent of customers research their potential purchases on mobile apps, bringing about a “convergence of physical and digital" aspects of shopping. In order to appeal to these customers, many of whom are millennials, Garrette says you need to “make a strategic investment in IT."
According to Garrette, you should pay attention to:
- Personalization. The more personalized a shopping experience you offer, the more shoppers may want to buy from you. You can collect customers' data by having them opt-in to getting messages from you. (You may need to incentivize them to do this.) Consider giving your customers the ability to create a wish list on their mobile devices—and integrate those lists, when relevant, into your inventory management decisions.
- Promotions. Once a customer enters your store, consider sending real-time offers for discounts and other promotional offers.
- Pickup in store. Customers increasingly want to order online and pick up in store so they can see and touch the product. Many stores offer free shipping when customers choose this option.
- Empower your staff. A key to getting customers to buy in-store, especially when they could likely get the same product cheaper online, is to take the hassle out of shopping for them. Equipping your staff with portable tech so they can answer customer questions on the spot can help. You may want to make sure that they're aware of product availability, customer reviews and special offers. Technology can allow them to access the customer's profile immediately and make personalized suggestions based on prior purchases.
- Mobile checkout. Customers hate standing in line. Using mobile check-out devices can help your staff check customers out anywhere in the store.
- Social engagement. Consider encouraging customers to share their purchase and experiences on social media, perhaps under a hashtag specific to your company.
- Cloud solutions. The cloud (or a hybrid cloud solution) can help small businesses that aren't keeping up with the pace of innovation, according to Garrette. Consider taking a look at programs such as Microsoft Dynamics 365, Sage CRM's Partner Solution Source, SugarExchange and Zoho's online Marketplace.
More Disruption for Retail?
As much innovation as we've seen in the retail space, Garrette predicts there will be more disruption in the next five years than in the last 50. Of course that means you're going to face more competition. A key to succeeding may be focusing on your customer's path to purchase. Garrette says small-business owners should “make smartphones your friend," particularly when it comes to millennials.
To reach this market, consider making your website and marketing materials mobile-friendly as millennials are rarely without their smartphones. Small retailers may also want to make sure their stores have a Wi-Fi network separate from the one you use in your back-office operations. It's a must to accept mobile payments from both Apple and Google Wallets.
A 2016 survey of 2,000 internet users from Mintel, a global market research firm, shows 56 percent of millennials already use or are interested in using mobile payments and 62 percent would connect their payment information to a retailer's app to speed payment.
Think of today's shoppers as “always being in the store, seamlessly moving in and out of the physical world," Garrette says. A great way to keep up with them is to deploy cloud-based, mobile-friendly tech solutions so you can offer them what they want, anywhere they are.
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* Survey participant number verified by Primary Intelligence.