How today’s retailers can compete with giants
- 1 How today’s retailers can compete with giants
How today’s retailers can compete with giants
Every day, we hear about new advances in technology and how they are revolutionizing the world. There’s also a lot of talk about the damage that can come as a side effect of innovations designed to help society.
In recent years, the discussion has focused on the potential collapse of the retail industry (and there are good reasons why). Retail trends have been raising some pressing questions among observers. Eg:
- Where does the retail industry stand?
- Where is the retail industry headed?
- What can small businesses do to stay in the race with Amazon?
We’ll cover all of this right below and clear up a bit of the confusion while we’re at it.
Although the total number of retail stores closing in 2019 is estimated to be more than 4,000 won, there are still companies that are open new branch. Target, Costco, Whole Foods, and even Apple are still in the process of growing their physical locations. That’s not to say there isn’t a genuine interest in the physical retail market – yes.
As the numbers come out, retail trade sales have increased by more than 2% In the past year, it seems like good news. In fact, the retail market value in the US has increased 10.6% over the past three years, and is expected to continue going up until 2020. Looks promising, doesn’t it?
Incorrect. So what’s the catch?
At the beginning of 2019, retailers were closed 23% more physical locations than in early 2018. Among the companies that plan to close stores in 2019 are Sears, Gap, Macy’s and JC Penney. And if that doesn’t make you a problem for retail store owners, consider this: online retail sales have grown more than 300 percent in the past 19 years.
These models mean that retail store owners will need to learn to adapt to the changes that are coming.
Evolving technology has given it the ability to shop online and there is a growing need for everything to be connected and available at the touch of a button. Since ‘immediate’ side effects are predominant in younger generations, it is important to ignore the fact that the future belongs to those younger groups.
Today more 70 percent Millennials have an Amazon Prime membership and Bain & Co. estimates that by 2025, Millennials and Gen Z will account for 45% of the world’s “personal luxury goods market”. This shows a future where online shopping will become a even more dominant force now.
However, this statistic shouldn’t worry small retail business owners too much because Bain & Co. also predicts that by 2025, around 75% of luxury purchases will still be made at a physical location. It simply means that consumers will want to see the benefits of cutting-edge technology incorporated into a ‘physical’ shopping experience.
As people step into physical retail stores in the years to come, they will encounter more examples of how technology is playing its part.
These innovations are already available in stores that allow customers to use online payment solution to buy their products. Many other exciting uses of the technology are slowly being developed, including facial recognition technology that lets store employees know when to open another checkout and smartphone apps that allow you see how furniture will fit in your home in augmented reality (AR).
While it is impossible to know for sure what the future will bring, there are ways to prepare…
Strategies for small business success in retail
How is it possible? Small retailers still compete with companies like Amazon and Alibaba? Here are 5 easy ways to take advantage of being the ‘underdog’:
1. Build personal relationships with customers
Discounts and rewards are good, but nothing has the same impact as providing excellent customer service. Going the extra mile to provide a product or service that best suits the needs of the customer. Pay attention to what your customers say – use their names where appropriate to show that they really matter. Companies will often automate their customer service, so take advantage of the human touch.
2. Find your niche
Having all the products one might need in one location is a huge advantage for customers who are looking to buy a variety of things without having to move from one store to another. However, when a customer is looking for a specific product (like a top-notch diving suit, for example), chances are they’d rather get advice from an expert (like an experienced diver) rather than an expert. someone who works at Amazon or Walmart.
If you find a niche and clarify your expertise, you will have more authority in that niche. Specialize your business so you can engage customers by providing specific content and wisdom they won’t get from companies.
3. Reach out to other small businesses
As the market becomes more competitive, small business owners often work harder against each other. Instead, by establishing partnerships with other small businesses, it can become easier to claim in your industry. See what kind of promotions or special deals can be made for the benefit of all participants. It will also help build a good reputation in the local community.
4. Express your personality
Big corporations will try to make them relevant to their customers, but how many will feel connected to well-thought-out slogans and stock photo ads? When it comes to individuality, the advantage clearly goes to small businesses, who have a much easier time telling their unique story.
Research has shown that customers who feel connected to a business on a personal level 7 times more likely to buy from that company. Don’t underestimate the importance of showing your true self.
5. Move fast
Companies put a lot of effort into perfecting their products and services, which is a big reason why those companies do so well. However, while every smart business owner should invest resources in optimizing their business plan, there is a huge advantage for small businesses, who will find it easier to making changes in the process.
If a company wants to change almost any part of its business, there are many bureaucratic gaps that need to be overcome. When a small business wants to change, there are fewer people to consult, less paperwork, etc. Use this benefit to find out what works for your business and what doesn’t.
While large corporations benefit from usable resources, what they tend to focus on is increasing sales volumes. That leaves a lot of space for small business owners to make the most of remaining blind spots.
Where companies can feel like logos without faces, small businesses can really put a face (and a personality) to a name.
Where corporate retailers can cover a wide range of goods, small businesses can specialize in a particular audience to bring in more customers.
Finally, while the changes take a lot of effort for corporations to take effect, small businesses are likely to make the adjustments more easily.
When you hear ‘technology’, you immediately think of smartphones and self-driving cars, but technology has had a much deeper and more subtle impact on the retail world. Recent trends in the retail industry have seen a drastic shift towards online shopping, along with the closing of thousands of physical retail locations. These changes have left many business owners wondering how to compete and stand out.
Challenges for small retail business owners lie ahead, but there are steps that can be taken to keep them on their toes. After all, it’s not the size of the dog in the fight — the size of the dog fight that matters. Only time will tell how the retail industry will survive in these changing times, so make sure to stay up to date with market trends on a regular basis.
Retail business owners, have you prepared your retail growth plan? Get our free ebook for fresh ideas and tips for designing your retail marketing growth plan.