Retail Insights
Gone are the days when brick-and-mortar ruled the industry and small retail outfits only had to worry about local competition. In the past decade retail has undergone seismic shifts. Sprawling department stores no longer monopolise retail. Shoppers will avoid long queues and overcrowded fitting rooms; a new era of shopping has taken over.
So say “goodbye” to swarms of people charging into stores for the End of Season Sale and “hello” to online shopping. Four-storey, mammoth structures are being replaced by laptops, tablets or even smart phones. In a survey of 1500 independent retailers conducted by Lightspeed POS, it was found that 50% of the retailers had online stores (up from 38% in 2014).
But if online shopping has taken over then why haven’t shops disappeared completely? Sure, there’s been a decline in the number of department stores in the UK and major chains are in trouble, but what about independent retailers?
Why has the number of independents actually increased?
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From the data above, two points become abundantly clear.
Firstly, we can see that while independent retailers are not in decline, the growth of independent retailers has almost stunted and thus, there is a threat to the industry.
Secondly, while e-commerce has been growing steadily since 2007, it has not monopolised the industry. In fact, a survey by AT Kearney has found that 55 percent of consumers would avoid online shopping altogether.
So what does this tell us about online shopping? While online shopping has grown, ultimately, shopping is an experience. People want to look, feel and try on clothes. I can never buy the perfect pair of boots online because I can only tell if it fits perfectly when I try it on.
The appeal of brick-and-mortar hasn’t vanished. In fact, many e-commerce ventures are opening physical stores and while high street chains are in decline, they are still hugely relevant. By offering online ordering and click-and-collect services, many of these high street chains have been able to retain market share. What about independent retailers though? How are they to thrive in an industry so monopolised by technology?
Well if you can’t beat them, join them. Rather than avoiding the technological revolution, independent retailers have the opportunity to be right in the middle of it. With better technology, the window of possibilities open for independent retailers is enormous. From ecommerce, to more efficient in-house tech to social media presence, independent retailers should embrace technology.
Tips to stay ahead of the curve
1. Get Online
Possibly the most effective way for independent retailers to capture a greater market share is through an online presence. While e-commerce businesses are looking to develop a physical presence, the reverse is also true.
While 71% of independent retailers say that online shopping contributes to less than 10% of their total revenue, 61% of these businesses plan on increasing their e-commerce budgets. By offering an online service, potential customers can browse through products and get an idea of what you can offer even if they don’t actually make purchases online. Predicted to be one of the biggest retail trends in the future, the race for the most convenience isn’t fictional- and how much more convenient can you get than buying with a ‘click’ from your laptop?
With Lightspeed POS you can integrate e-commerce into your business strategy, with the option of being able to easily sync inventory and monitor sales for both your online and brick-and-mortar stores.
An alternative, but less effective option is to register on an e-commerce retail website such as Etsy or the ASOS Marketplace, where you could sell products online. Having an online presence can be about more than just building an e-commerce model; it’s also a great marketing strategy.
2. Tell A Story
Tapping into the consumer psyche is extremely important to improve sales. Consumers don’t just want products; they want a personal relationship with a brand. In a recent survey it was revealed that 87% of consumers want meaningful interactions with brands, yet only 17% think brands are delivering. With the rise of consumerism, consumers have started to value individuality and it is often these customers that look to independent retailers. So, independent retailers must learn to cater to this audience.
In order to reach potential customers, independent retailers must develop a relationship with them. The easiest way to do this is over social media- specifically through channels like Pinterest and Instagram. More so, developing a social platform for customers to interact can be a great way to promote your business. Starbucks sets a brilliant example in this respect, with MyStarbucksIdea.com, where customers were allowed to engage with ideas and think of their own- coming up with the “splash stick” in to-go cups and the hazelnut macchiato.
By giving customers a platform to engage with each other, offering retail tips or even expressing opinions on the latest scandal in Hollywood, retailers can build a relationship with their audience and generate a foundation for new customers.
3. Offer In-Store Technology
For customers, while shopping online is convenient, it is cold and impersonal and so there is a toss-up between efficiency and a personal experience.
However, what if you could offer both? The concept behind Kate Spade Saturday revolutionised what it meant to window shop. Customers could stop and peruse items on a touch screen on the window of the shop and order without ever having to go inside a shop. It’s customer experiences like this, that incorporate technology, which set a brand apart. Allowing customers to browse through items on an iPad in your store could be a great way to stand out.
With contactless payment limits increasing to £30 in September, and the recent launch of ApplePay, offering customers contactless payment could boost sales. More so, with cloud-based point of sale systems, you can keep up to date with real-time feedback on sales and determine which products are selling and track inventory. These are tools you can use to stay on top of latest trends and to determine what kinds of products your customers prefer. Additionally, developing a customer loyalty scheme could be hugely beneficial to your brand. With “big data” becoming a sort of buzzword in the industry, 42% of independent retailers use data analytics to make smarter buying decisions and an additional 26% of retailers planning on utilising big data, implementing in-store technology could hugely boost revenues.
4. Pop-Up
As mentioned in a previous article, pop-ups are a great marketing tool for independent businesses. They are a great way to promote your name and build a presence in the industry. With minimal sunk costs and thus a great degree of flexibility, pop-ups can promote their business through social media, word-of-mouth and by being in popular stores. They can begin to garner up loyal customers and some amount of notoriety. Pop-ups in department stores or High Street chains offer a particular advantage, as you have the ability to attract the flocks of customers who already frequent these stores.
Conclusion
Consumers expect a lot from retailers. They want convenience and efficiency but also a personal relationship with retailers. Luckily for independent retailers, customers are starting to stray from mainstream brands, preferring quirky and unique products not offered by many high street retailers. Independent retailers should take advantage of this opportunity by providing customers with both a story as well as the convenience of online shopping and in-store tech. Boutique retailers can do this through investment in innovative retail technology and through the promotion of their brand on social media and other platforms.The future of retail is not one of the two but rather, both e-commerce and brick-and-mortar.
So embrace your individuality and the new wave of technology; 84% of independent retailers are optimistic about increased revenues by 2016.
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