In an ever-changing market, retailers should know what strategies will always be effective.
The retail market is wildly unpredictable. Essentially, when considering emerging trends, what works and what doesn't is determined by consumers. For years, navigating shifts in the industry has been a whirlwind for sellers. First, brands were pressured to focus on online operations to keep pace with the eCommerce boom (without losing sales from brick-and-mortar). Now, some are suggesting that in-store shopping is the preferred method and that physical locations are a must.
It is now apparent that, as the market evolves and the Internet of Things continues to dominate, optimizing omnichannel purchasing will be crucial to retail success. However, knowing how to go about it can be difficult, to say the least.
There are many things that an organization cannot control - like what new technological innovation Amazon will roll out tomorrow, or how economic fluctuations will influence consumer spending. Retailers need to focus, instead, on what they can control and the aspects of the industry that won't change, even when the minds and shopping behaviors of its customers do. Below are three actions that sellers, whether it be for in-store or online operations, should never stop doing.
1. Accurately assessing traffic and conversion rates
In order to fix a problem, one must know what the issue is in the first place. To understand how to retain customers and increase market share, sellers must be able to get a comprehensive view of what in particular is leading to lost sales and shopping cart abandonment. At what point in the customer life cycle are shoppers changing their minds? Pinpointing exactly where turnover occurs is critical. This is something that many companies realize data and analytics can be used for.
But it isn't just important to collect the right data. It is also essential that this information is analyzed, interpreted and applied appropriately. Luxury Daily recently reported that, according to a new report by RetailWire, there is a lack of understanding the correlation between traffic and conversions among retailers today.
"Most retailers today track traffic and conversion rates in their stores," HeadCount CEO Mark Ryski, who contributed to the RetailWire study, told the source. "However, in our experience, few fully leverage the insights that come from this data. We often find that traffic and conversion data are being used to keep score, but it's not being applied or actioned to create better sales results."
2. Making informed and strategic investments
Every day, there is an abundance of headlines about how major companies are adjusting their business models. Many of these strategies are contradictory. For some, improving omnichannel and increasing cost-savings means consolidating and shutting down brick-and-mortar stores; for others it has led to building new facilities and expanding networks.
If every retailer constantly followed the lead of other organizations and based their approaches on what others were doing, it would be an endless (and expensive) cycle. There are so many factors that play into retail success, but what works for some isn't effective for everyone. The specific needs of a company must be identified and solutions tailored to them. Similarly, it is critical that the measures taken to improve operations produce a high return on investment.
Last year, retail giant Nordstrom spent about $360 million on technology and eCommerce investments, only to announce this month, after disappointing earnings report, that it was letting go of about 130 employees on its tech team and focusing on fewer projects. The trend of making retail investments that don't increase sales but, instead, cause them to drop is what Donna Mitchell, in an article for the National Real Estate Investor, recently referred to as "the threat of eCommerce cannibalization" and is something that other department stores, such as Neiman Marcus, have experienced.
Because the omnichannel market is becoming so competitive, it's pushing retailers to act quickly, sometimes too quickly. This can be a mistake. Implementing a new technology or system before thoroughly assessing any and all of the potential repercussions it could have can lead to serious disruptions.
3. Providing exceptional customer service
As we mentioned before, the purchasing behavior of consumers is not exactly easy to control. But, whether it is done online or in-store, making a sale is nearly impossible without ensuring the shopper has a pleasant experience. Regardless of the size of the business, what is being sold or who it is being sold to, retail success is not possible without quality customer service.
There is no absolute definition for what constitutes "quality." And it is very likely that the solutions used to achieve this goal will vary depending on whether it is for in-store or online customers. But to know how to offer shoppers the kind of service they value and appreciate, a business must understand what makes them happy. For example, many consumers today want to be able to start shopping on one device and then complete the order on another.
And, although the trends making buyers happy today may not be the same in a few months, let alone a few years from now, there are a handful of things any retail company can just about guarantee a consumer will never want, such as long wait times for delivery, overpriced items and unsecured payment processing.
Adjusting operations to support the omnichannel needs of an ever-evolving market can be expensive, overwhelming and, sometimes, ineffective. But, by making sure the pillars of success are key focus areas at all times, retail companies can improve the sustainability of their organizations.