Article - Ragtrader
Take a seat and think..., quotes Simon James.
It has been a difficult few years for most retailers, particularly those in the area of discretionary retail.
It can be argued that there are fundamental changes now taking place that will change the face of retailing permanently.
There is no quick fix to many retail challenges. Some are short term, like the economic situation, and others are more permanent, like the development of the internet.
While developments such as internet shopping will cause major, perhaps terminal, problems for some, the internet will create opportunities for others. Most retailers need not find internet competition the bogeyman they first feared if they take advantage of their own strengths.
Do what you do well the guiding light for all businesses is to always remember what it is the business is good at.
It sounds obvious, but the reality is that many businesses try to be all things to all people, and end up not doing any of it well.
For example, it could be a good time for retailers who have added a wide range of product lines to look at shedding some of them. By returning to a niche’ approach and offering a wide range of specific goods, they will know their products well, become the "go to" place for those lines and build a reputation for their expertise or specialist product range.
In the last 12 months we have seen fear within the retail industry with retailers playing it safe, not ordering too much and cutting back on styles without strategic consideration.
As a result the shopping experience has suffered as ranges are less edgy with a higher proportion of basic lines filling the shelves.
Frustrated consumers are finding more choice online, and this is usually from overseas.
Niche players need a business with a cost structure that can be supported by the size of the market for the niche product they sell. Care must be taken as products can go off trend quickly. Rather than being a major competitor, the internet can be a god-send in this area if retailers use it wisely. I was recently looking for some plant pots for my garden. I had a pretty good idea of what I wanted, and went online to see where I could go to find them. I found a shop not too far away that just sells garden pots in an enormous range of sizes, colours and styles. This was a much more attractive retailer for me than, say, an enormous hardware store that would only have four or five options to choose from. This retailers use of the internet bought cus- tomers through the doors.
Marketing Retailers should review their marketing and keep only elements still appropriate.
The retailer of garden pots I went to, had its search engine listing well thoughtout so anyone searching for "Pots Sydney East" found them.
There are many other examples, and use of social media like Face-book and Twitter is very under-utilised by retail-ers who could reach many more potential customers with a well thought-out campaign
especially fashion retailers wanting to reach young females.
Service This is still an area where many Australian retailers fall down. Good service will be one of the main reasons people will continue to seek out particular shops, recommend them to others, and prefer them to on-line shopping.
It has been argued that shoppers will visit stores to see what they want, then order it online. The best defence to this is giving good service and being able to close the sale.
But this needs to be done in a way that appeals to customers. Some retailers use service practices that they believe work well but in fact put customers off. Too much attention can be seen as hassling. Too little looks rude and shows a lack of interest. I cannot remember how many times I have heard complaints of the difficulty in finding knowledgeable shop assistants in stores.
Training and keeping sales staff has seen significant under-investment by most retailers.
Improve business efficiency Finding ways to make improvements in how the business is performing doesn’t need to be difficult if good financial systems producing accurate data are in place. Most businesses usually produce the sort of financial information that owners or managers need to understand the business’s position and how it is tracking. The trick is using the information properly. Reliable and timely information also helps in critical areas such as cash-flow and inventory for retailers, allowing stringent purchasing practices to avoid over-ordering.
For example, daily sales figures, coupled with good stock data, will help ensure cash is not tied up in inventory, and that popular lines and sizes are always available.
Most retailers have data on staff sales performance, too few use it to improve business performance.