Companies in the retail sector are among our biggest customers, generating as much, if not more business than the office and hospitality industries. The last couple of years have not been kind to the retail sector, however. Economic pressures, combined with a rise in mail order and online shopping, have taken their toll on the high street. Even giants such as HMV and Woolworths have found themselves struggling to compete against Amazon and eBay. What hope is there for smaller stores?
We’ve noticed that many of our biggest clients have slowed down their expansion, and there are fewer and fewer up-and-coming stores looking to renovate their premises. However, some small businesses are succeeding, and the secret to their success is that they’re turning “bricks and mortar” into an advantage, rather than thinking of it as a curse.
Turn Physical Presence into the Product
Running a retail business involves greater overheads than running a mail order business because you need to maintain a store front, employ shop workers, and keep a range of items in stock. This usually means that retail stores can’t match the deep discounts of online stores. However, retail does have a couple of massive advantages over mail order, including:
- The customer can speak to someone about the product and get instant advice.
- The customer can touch/smell/see the product before they buy it.
- The product is right there, if they like it, they can walk out of the store with it in their hands today.
The above points are especially important for food, clothing and even some consumer electronics items. Why wait a few days to get an iPad Mini when you can walk into a store, look at one, decide you don’t like the small screen and buy a full-size iPad instead? Sometimes, being able to touch a product before you buy it is incredibly useful. Successful retailers turn this once basic fact into a selling point.
Make Life Easy for Everyone
One area where many small businesses fail is that they don’t make it easy to shop with them. It’s all too common for shops on a local high street to have confusing, limited opening hours, and shop fronts that make it hard to tell whether the business is actually open or not.
The bigger high-street chains have brightly lit shop fronts, revolving doors and clear signage that makes it obvious whether or not the shop is open. Most consumers don’t have the time to play “guess the opening hours”, and if a shop looks closed, or the door is shut and it looks awkward to open it when they’re laden with shopping bags, they will just move on.
Investing in automatic doors, accessibility ramps and good signage makes life much easier for those with disabilities, parents pushing prams, and people who are in a hurry and carrying lots of heavy shopping. Upgrading your store front may seem expensive, but it’s a great investment that will drive more footfall to your business.
Shopping As an Experience
Some consumers are price-conscious, and you will struggle to reach those consumers as a bricks and mortar retailer because their shopping habits are so different from the average person’s. They don’t care about convenience, speed or quality – they shop by looking for a voucher code or using a price comparison website for every single purchase they make. Even if you do turn out to be the cheapest retailer for one particular product, you will struggle to convert that one-off purchase into a long term loyal customer because price is the key factor in all of their purchasing decisions. Only large firms with lots of purchasing power can afford to try to compete on price.
The good news is that there are other kinds of consumer to target. Some consumers care about quality or convenience, and others like their products to be a lifestyle choice. It’s easier to differentiate yourself to those consumers by providing great service and making your customers feel special.
Consider the difference between a budget outlet and a “lifestyle” store such as the Apple Store or a Nespresso Boutique. Budget outlets are sparsely decorated, featuring row after row of products and minimal decor. Customers are encouraged by the design of the shop to buy their products and get out of the shop as quickly as possible. In contrast, boutiques offer a pleasant, relaxing environment. It’s normal to spend a long time trying out product demos on the display iPads, or sampling complementary coffees at a Nespresso store. Customers are made to feel welcome, and look forward to visiting the shop.
Unfortunately, not all products lend themselves to the boutique shopping experience, but for those that do, differentiating your shop based on decor and atmosphere is a great idea. A newsagents or book store that provided Wi-Fi and comfortable seating in a reading area would be a big hit in most cities, as would a computer store that offered high-end bespoke computers in addition to the more typical budget models provided by the bigger chains.
Dare to Be Different
It’s clear that the traditional retail model is far from healthy at the moment. Stores cannot hope to compete against mail order on price or selection alone. It would be a mistake to try to copy the basic retail model today. Even stores which look like they are doing well and have strong brand names to work with are facing falling revenues and rising rents, and the shortcomings of the retail model will catch up with them eventually.
If you are launching a bricks and mortar store today, find a way to differentiate yourself from all other stores. Build a community around your shop. Launch a user-group, a reading circle, food club, or some other club and host it in your store. Try to find a way to build a brand that extends beyond “the local place to buy widgets”. It’s the strength of that brand name that will carry your company through hard times.