Retail is and has always been a fiercely competitive industry. In order to ensure success, retailers must constantly reinforce their points of differentiation through expanded capabilities, rather than making last-ditch adjustments in hopes of addressing fluctuating performance.
Specifically, the best retailers leverage the wealth of available data supplied by in-store and online technologies in order to identify opportunities, refine activities and connect with customers. Three important ways to leverage this data include:
1. Create localized promotions – retailers allocate a significant amount of money to their marketing efforts. And while national promotional campaigns drive shoppers to the store and increase incremental sales, savvy retailers leverage store-level data to focus their spend on certain districts and even specific stores. Rather than pushing large-scale, costly campaigns, this approach targets lower-trafficked stores and incentivizes shoppers to visit locations with the greatest opportunity for growth (as opposed to attempting to drive traffic to already busy stores). By selectively approaching marketing efforts, retailers are able to save on spend and still increase their bottom line.
2. Choose real estate wisely – because a major piece of success in retail hinges on real estate, the best retailers approach new locations, expansions and even closures in a highly thoughtful manner. Adding to the already in-depth number of factors that retailers investigate related to real estate, those most in-tune with their business and customers also consider accessibility and proximity to competitors while ensuring that surrounding stores are performing well compared with the overall market. Thanks to new business intelligence solutions, this information – which is highly necessary for making real estate decisions – is more readily available. Considering that the U.S. retail market is hyper-competitive, this type of keen investigation is essential to ensuring sustained viability of future physical stores.
3. Integrate online in store – the online and offline worlds have blended. Pure-play e-commerce retailers such as Warby Parker, Rent the Runway and Bonobos recognized that digital offerings simply weren’t enough to succeed in retail, so they opened physical locations in order to directly connect with shoppers. Highly successful, traditional brick-and-mortar retailers have established their online presence in a meaningful way. Now, they’re making smart connections between online and offline. Endless aisles, curbside pickup, store-to-store delivery and a host of other high tech offerings are tying in existing consumer behavior to create a seamless retail environment that drives shoppers in store. Ultimately, remaining in tune with customer behavior and emerging technology does and will continue to be critical for any retailer that wants to remain competitive.
As retailers look ahead, they must be ready for savvy shoppers and fierce, technology-enabled competitors. Making good use of promotions, locations and that essential connection between online and offline should be key priorities for all retailers.
-Bill McCarthy, ShopperTrak GM of North America