Don’t Be Spooked By RETAILAGEDDON!

As if the latest news with Amazon opening into Australia wasn’t enough to send fears into the hearts of many a small business owner trying to keep the lights on across Tasmania. 2017 has seen a steady decline in major and minor retail business alike. This is all happening while Amazon goes from 16 billion in sales to 80 billion globally.

So what can retailers large and small do? Are you expected just to close up your shop and accept that all customers are going to flock to the new online commerce giants moving in? We don’t think so. The change in technology, society, the rapid uptake of mobile commerce and the instant need of obtaining the latest products. These are real and happening but don’t count out physical retail just yet.

First, let's explain why the above shouldn’t be causing panic just yet, then let us list five ways you can make these changes work for you.

e-Commerce is here to stay, but this digital marketplace can create as many opportunities for the brick and mortar stores as much as it can cause problems. Ultimately it comes down to how you can position your business before the market leaves you behind in a trail of digital dust. One thing is sure in business; you will become a casualty if you ignore change.

So where’s the silver lining? Tasmanian retail sales figures have grown from last year by about 2.2%. Bucking the trend of slow growth seen from other states. This shows us that as a whole throughout Tasmania shopping has improved, and with figures coming out Roy Morgan's state of the nation report, Australians have spent 41.3 billion on online shopping with 65% of us using an e-Commerce portal in 2016. So retail growth is positive however, shopping behaviors are changing.

When you went into business, you had an understanding of the market and what the advantages your products or services offered. When a market shifts you have to as well, like a start-up. What is the market doing? And how am I positioned? Giants have power, and yet so do you, just different. This goes back to marketing business basics, do you remember SWOT analysis? What are your strengths and weaknesses? What are your competitors doing better? What are their weaknesses? What changes are happening in the marketplace and how are they likely to affect your strengths and weaknesses?

The world is going digital, that means two things: physical only thinking has no place or a limited place in a digital world, but also it provides a contrast and opportunity in a digital-only world. Look at book stores, everybody is reading digital books but the stores that have survived have experienced a surge in sales as consumers are seeking a more tactical and or nostalgic reading experience.

As a brick and mortar store, you are sure to have experienced “Show-rooming”. Where people browse the physical store to research a product, then find the product cheaper online. For those of you who feel as this happens a lot, this gives you some critical data about your customers. Firstly, they want to touch, try and experience the product. The drive to your store and time spent browsing is not a huge factor in why they are not purchasing. This goes against many conventional thoughts when it comes to e-Commerce, that is, convenience. Consequently, the reason as to why you have lost a sale isn’t that online is more convenient it’s that you aren’t winning the sale. So perhaps by creating real-time demand for that customer, so they walk out of the store with your product. This is an opportunity, not a problem.

Don’t sit back and let someone else respond to the online demand and watch them take your customers. If you think you’re going to lose your customers to Amazon with free shipping, offer the same. That way they can come into the store try that comfy sofa first then have it in their home the next day. Turn what was initially an inconvenience, driving to their local furniture store, into a convenience. As a small store, Amazon encourages retailers to sell their products through them, why not piggyback off of their Klout and online functionality. Leverage Amazon reviews to drive customer who might prefer to buy in store but are merely researching online to find the product. Learn why and how your customer interacts with media channels when making a purchasing decision. Focus or even exploit those channels to continue to drive your customers to your products and services.

Gone are the days of just ranging a product on a shelf. You can longer afford to push mediocre products and expect people to come in and buy them. You need to create experiences, engage your customers, find ways to create relationships. Emotion will always win over logic. Even if your purchasing process is as streamline as possible, there are opportunities to create a personalised experience. Social still matters, and as a brick and mortar store, you can create something that users can never get from just a website. Focus on social aspects, including friends, local experts, and shareable local experiences that customers can relate to. Digital personalisation is cool, but nothing beats physical luxurious customer service.

Experiences from a device, no matter how convenient, will never compare to the in-store experience with sights, sounds, smells, and touch. No matter how well you present an item online, nothing beats trying it on, holding it in your hands or giving it a test. Retailers who provide “click and collect” like services bring added convenience to shoppers whose purchasing journeys increasingly span digital and physical touchpoints, be it a smartphone, home computer, or merely browsing the isles in your store. Don’t assume ‘all digital’ is the only future; people are physical beings after all who like to get out of their homes.

Something as simple as combining products can create unique experiences. Understanding your customer demographics and offering a combination of products they would be interested in can be the value-adding you need. Using social media to entice customers to products you offer that may coincide with an event or holiday or target customers who are looking for a new sofa and offer matching cushions or rugs at a discounted rate.

As we round off 2017, businesses across Tasmania should be aware of how they sit in the marketplace, what changes these large e-Commerce giants are likely to bring to you as they start to ramp up. What smart strategies can you put in place to continue to drive traffic to your stores and continue to shift, learn, and reinvent your business to stay competitive.

Are you looking for some digital guidance? Or need help getting products online? Contact us today to learn more about how our digital team can help bridge the gap between the physical and digital world.