Retail Marketing Strategies
Retail Strategy
A retail
strategy is the process we use to develop our products or services and
sell them to customers. There are multiple elements to this plan, including
location, store, merchandise/assortment, visual merchandising, staff, service,
mass media and communications, and price.
The retail concept
covers four broad areas and is an essential part of the retailing strategy:
(i) Customer Orientation – The retailer makes a careful study of the needs
of the customer and attempts to satisfy those needs.
(ii) Goal Orientation – The retailer has clear cut goals and devises
strategies to achieve those goals.
(iii) Value Driven Approach – The retailer offers good value to the consumer
with merchandise having the price and quality appropriate for the target
market.
(iv) Coordinated Effort – Every activity of the firm is aligned to the goal
and is designed to maximize its efficiency and deliver value to the consumer.
Retail Marketing Strategies
Some of the best
retailing strategies to decide the target market and then select the
appropriate combination of product, price, place and promotion are as follows:
1.
Retail positioning:
This involves choice of target market and
differential advantage. Targeting allows retailers to tailor the marketing mix
which includes product assortment, service levels, store locations, prices and
promotion, to the needs of their chosen customer segments.
Differentiation provides a reason to the
customer to shop at one store rather than at another. The customer should have
distinct expectations from the store when he walks into it which should be
different from the expectations that he has when he walks into another store.
Retail positioning comes from novelty in the processes of shopping offered to
the customers and novelty in the product assortment or both.
Novelty
in the process offered to the shopper:
The way a
store facilitates a shopper to make his choice of products and brands, the way
he is able to access the items in the store, and the way he makes his payments,
determine a customer’s satisfaction with a store.
But a customer
does not want a similar treatment for all his purchases and on all occasions
when he visits the store. For some products, his choice of brand may be very
clear, and a salesperson’s attempt to help him would only irritate him.
But for some
other products, the same customer would solicit help of salespersons in making
a choice among brands and would welcome a salesperson’s attempt to influence
his purchase. For some purchases, the customer would like his favourite brand
to be placed prominently on the shelf.
But when he
does not have a clear brand choice, he would not mind some clutter on the
shelves because he wants all the brands to be available. Most customers would
prefer to be allowed to pay their bills as early as possible but, on some
occasions, they would be more tolerant of delays than on others.
Customers would be finicky about delays
in making payments when they are rushing home after office but they would be
more relaxed during their weekend shopping trips. While it is not easy to
distinguish between customers and their purchase occasions, the retailer will
have to make judgments about the expectations of a customer when he walks into
the store.
It will be a good idea to allocate a
particular salesperson to a customer, i.e., when a customer walks in he is
always served by a particular salesperson rather than different salespersons
depending on what he proposes to buy.
Such salespersons specialize in a product
category and assist any customer who is interested in the category. Under the
new arrangement, all salespersons would have to know enough about all the
product categories but would know more about the purchasing behaviour of a set
of customers allocated to them.
Novelty
in the product/product assortment offered to the shopper:
A retail shop has to be known for being
of a certain type. A store may be famous for being very prompt in stocking the
latest or the most fashionable product. Another may be known for stocking all
possible variety in a category and yet another may be famous for stocking the
most premium brands.
A store would become too unwieldy if it
tries to have too many different types of assortments. A store which stocks the
latest products in a category will also be able to stock the most premium
brands of the category but the attention of the company will be divided and it
will be difficult to handle relationships with diverse suppliers whose business
philosophies are different. Such a strategy will also send conflicting signals
to customers as to what the store really stocks well.
2.
Location of the retail store:
For some products like groceries,
consumers do not like to go to a faraway store. Therefore, store location has
great influence on sales performance of such products. A retailer has to decide
whether it will be a standalone store in a city, or will it open stores to
cover a designated area like a city, state or country. A retailer may decide to
open one store in each city.
The retailer has to buy from distributors
to replenish its stocks. Or it decides to open as many stores as a city can
sustain, and moves to another city and again opens as many stores as that city
can sustain. Therefore, it covers cities one by one, instead of opening one
store in each city. It opens a distribution centre in each city.
The distribution centre receives supplies
for all the stores in the city in a single truck from each supplier. Smaller
lots of each of these supplies are loaded on trucks bound for each store. The
retailer buys from the manufacturer directly, and does not have to buy from
distributors.
A retailer’s choice of a city depends upon
factors like its congruence with its chosen target market, the level of
disposable income, the availability of suitable sites and level of competition.
A retailer’s choice of a particular site in a city depends on level of existing
traffic passing the site, parking facilities, presence of competitors and
possible opportunities to form new retailing centres with other outlets. When
two or more non-competing retailers agree to site outlets together, the
retailing centre can draw more customers than what each individual store would
have been able to do.
More than proximity to customers, the
location of a store is important in terms of how often the target customers are
likely to visit the site as they live their lives. The lifestyle of the target
customers, and the goods and services that they buy will decide whether they
will visit the site or not, and how often.
Being in the place which the customer
will visit in pursuance of his lifestyle will ensure that the customer will
walk into the store. This aspect is important because customers are combining
purchases of different genre of goods and combining purchases of goods and
pursuance of entertainment.
3.
Product assortment and services:
A retailer has to decide on the breadth
of its product assortment, and also its depth. A retailer may have a broad
product assortment, but within each product line, it can stock a shallow
product range. Or it can have a narrow product assortment, but within each
product line, it can stock a deep product range.
Therefore, a
retailer’s choice of product assortment ranges from stocking one deep product
line to stocking a broad range of products including toys, cosmetics,
jewellery, clothes, electrical goods and household accessories. A retailer
begins with one or limited product lines and gradually broadens product
assortment to be able to sell more products to customers who come to its store.
Petrol
stations start out as fuel providers, and expand by adding provision stores or
food outlets to maximize the revenue that can be obtained from the customer.
Some stations on the highway may also add a Cineplex to make their retail
outlet a one-stop entertainment and utility centre for the customer.
By expanding
its product assortment, a retailer reduces price sensitivity of customers because
a traveller stops at a petrol station as he can buy an assortment of products,
and not because its fuel cost is low. A retailer’s decision of the product
assortment that he will stock will depend on its positioning strategy, the
expectation that its customers have come to have of it, and also on the
profitability of product lines that it carries.
It may be
prompted to drop slow moving unprofitable lines unless they are necessary to
conform with the range of products expected by its customers. A retailer also
has to decide whether it will sell only manufacturer brands, or it will have
its own label or store brands. Most manufacturers may sell own label brands
products to compliment manufacturer brands.
Retailers need to consider the nature and
degree of customer service. Degree of service can vary from customers being
expected to search for their items to elaborate displays and suggestions from
sales personnel. Retail outlets for expensive items like cars provide elaborate
services in the forms of product displays, test drives and arrangement of
loans, whereas in a discount store, customers would have to select their items,
sometimes from heaps of merchandise.
Service levels have to be higher when
customer knowledge levels are low, expertise is required to buy the right
product (that the customer lacks), the products are expensive (money spent in
relation to customer’s disposable incomes are high).
The retailer can also use service levels
as a means of differentiating his offer when the product assortment is similar
to those of competitors. For instance, a cosmetics store can employ its
personnel as grooming advisors to help a customer choose relevant products from
the store.
4.
Price:
A retailer may choose to compete purely
on price, but price can be a differential advantage only when a retailer has
immense buying power, and has been able to control cost. A retailer may favour
everyday low prices rather than higher prices supplemented by price discounts.
Such a retailer is patronized by
customers who prefer predictable low prices rather than occasional price
discounts. A retailer may sell no-frill products, which are basic commodities
such as bread and soft drinks that are sold in rudimentary packaging at low
prices. It appeals to the price conscious shopper who wants standard products
at low prices.
Some retail items may be priced very
competitively to generate more demand for other items. Such products may often
be sold below cost and are called ‘loss leader’.
The idea is that the customers get
attracted to the low price of the ‘loss leader’ and walk in the store to buy
the item but may end up buying many more items. The items chosen for inclusion
should be widely known and bought on frequent basis.
5.
Promotion:
Retail promotion includes advertising,
public relations, publicity and sales promotion. The goal is to position the
store in consumers’ minds. Retailers design ads, stage special events and
develop promotions aimed at their markets.
A store’s opening is a carefully
orchestrated blend of advertising, merchandising, goodwill and glitter. All the
elements of an opening—press coverage, special events, media advertising and
store displays—are carefully planned.
Retail advertising is carried out at the
local level, although retail chains can advertise nationally. Local advertising
by retailers provides specific information about their stores, such as
location, merchandise, hours, prices and special sales. In contrast, national
retail advertising generally focuses on image.
A popular retail advertising practice is
cooperative advertising. Under cooperative advertising, manufacturers pay
retailers to feature their products in store mailers or the manufacturer
develops a TV or print ad campaign and includes the name of the retailers carrying
the product at the end.
Many retailers are avoiding media
advertising in favour of direct-mail or frequent shopper programmes. The
frequent shopper programmes offer perks ranging from gift certificates to
special sales for most frequent shoppers. Direct-mail and catalogue programmes
may be a cost-effective method of increasing store loyalty and spending by core
customers.
6.
Store atmosphere:
Store atmosphere is created by the
design, colour and layout of a store. A retailer works on both exterior and interior
designs to create an appropriate store atmosphere. The store atmosphere should
prompt target customers to visit the store and stimulate them to buy once they
are in the store.
External
designs include architectural design, signs, window display and use of colour
that create identity for a retailer. The image which is projected should be
consonant with the ethos of the store. For instance, a kids’ store is usually
bright, vibrant (may be in the shape of Mickey Mouse) and colourful to attract
the child and make him want to buy things in the store.
Such a store
should generally have lots of space for the child to move around and explore
his world. Even the salespeople should match the child’s temperament. They
should be playful. Interior design like store lighting, fixtures and fittings
as well as layout, affect store atmosphere.
If a store has
narrow aisles, it appears congested and unclean, the customers may not like to
spend too much time in such an environment. A poorly lit store is uninviting.
Colour, sound and smell affect mood of customers, and customers stay longer in stores which are colourful, plays good music and smells good. People attribute different meanings to different colours, and a retailer uses colours to create the desired atmosphere in the store. Music can be used to create a relaxed atmosphere, and make the customers linger on in the store.
Brick-and-Mortar
Retailers vs. Online Only
There
is a significant overlap between how a store should look and feel and how an
e-commerce site should look and feel.
It
doesn’t matter if it’s your storefront or your homepage, first impressions
matter. It also doesn’t matter if you’re talking about merchandising fixtures
or product pages, how you display your product matters.
1.
Use Social Media Wisely
If
you’re running a business today, chances are you have a social media account
for it. You may have a Facebook account or Instagram or Twitter account (or
maybe all three).
But
it can be hard to see the value of being active on social media if you don’t
have an overarching retail marketing strategy.
2.
Use Facebook Ads to Drive Revenue
When
it comes to using Facebook ads as part of your overall retail marketing
strategy, you’ll want to focus on these three things:
#1:
Start with engagement campaigns.
#2:
Create a sense of urgency.
#3:
Drive traffic to your brick-and-mortar store.
3.
Use Google Shopping Campaigns
Google
Shopping campaigns are the first thing customers see, and they are also more
dynamic than traditional Google ads. Google Shopping features product images,
pricing, shipping information, and star ratings.
The
real trick is to use Google Shopping campaigns in addition to your other Google
marketing strategies.
4.
Retarget Your Customers
There
are so many reasons why a customer didn’t decide to buy on their first visit.
They
may have had more questions they needed answered first. Maybe they are holding
for a super good deal. Maybe they really, really want your product, but it
isn’t at the top of their list right now, and they were looking at your site
like window shoppers do in a mall.
No
matter the reason, the consistent truths are two-fold: they were
interested in your product, but not enough to be sold.
Retargeting your customers keeps the conversation going
after your customer has left your site.
Retargeting
ads should work to solve those potential pain points. For example, if it’s the
price, then an extra discount will sway them.
There
are two main types of retargeting:
1.
Using email lists
2.
Using a Facebook Pixel on select pages
By
using retargeting, you can show them an ad that the available data suggests
they are interested in.
Retargeting
works because you’re showing people ads for merchandise, they already expressed
an interest in. Retargeting ads are, by definition, more catered to each
individual customer.
5.
Use Influencer Marketing for Unique and Value-Driven Content
Influencer
marketing is designed to be specific, relatable, and personal. As customers
want more relevant content, it’s easy to see why 65% of influence
marketing budgets are expected to increase in 2020.
Finding
authentic influencers to promote your brand allows you to gain trust and
recruit new customers.
Instagram
has been the home for most influencers. Instagram’s breadth of user-generated
content allows you to find influencers who are natural fits for your vertical.
Successful Retail Marketing Strategy
It’s not possible to launch retail
marketing campaigns without a plan and get everything to work out. It won’t.
Apart from the right tools, there are
three key elements needed before you think about launching any retail marketing
initiative.
Understand
Your Customers and Their Needs
Do you have a clear enough understanding
of your target customers?
Do you know what they want and the way
they perceive certain brands and styles of marketing? Are you turning them off
or hitting the right notes?
Until you can answer these questions with
certainty, it’ll be difficult to achieve breakaway success. The good news is
that you can get a deep understanding of your customers cheaply and
effectively.
How do you do that?
By sending out questionnaires to past customers or the people who visit
your store and website. This isn’t a customer satisfaction survey. Instead,
you’re trying to understand what they’d like to accomplish with the kinds of
products and services you’re selling.
For example, if you are selling beard
care products, you’d want to know why customers buy. Is it to boost their
confidence, live better lives, get a date, etc.? The answers inform both what
you offer and how you position those products.
The
company launched successful retail marketing campaigns, which fostered loyalty and culminated in a partnership with
Target stores.
Here are a few questions you can ask to
get a better understanding of your customers:
· What
brought you here today?
· What
problem are you solving with X product?
· What’s
your biggest challenge related to X (with x being the problem you address)?
In online questionnaires, you’ll want to
find out what the customer’s needs are. If you have a bigger, more expensive
product that takes some time to consider, you also want to know which buying
funnel stage they’re in. This gives you the ability to adapt your messaging
accordingly. The
AARRR lead funnel framework is
a helpful method to optimize communication for ‘Acquisition, Activation,
Retention, Referral, and ultimately Revenue’.
Meet
Their Needs with the Right Products & Services
It’s one thing to know what your people
want and why they want it. It’s another thing to give it to them with the right
products and services.
For example, let’s say the fictional
company Acme Inc.’s customers want a stronger, softer, and shiner beard and
hope to achieve that by using natural organic products. A product with tons of
preservatives and chemicals would be contrary to that. Even if it helped them
achieve their main objective, it wouldn’t be appealing to them.
Part of the preliminary work for retail
campaigns involves making sure you have the right products for the audience
you’re targeting.
If you don’t, you can do one of two
things:
1.
Change the product
2.
Change the audience
Neither option is ideal after you’ve
launched, so focus on building a solid foundation.
Location,
Accessibility and Convenience
The final piece of the retail marketing
puzzle is being where your customers can easily find and access your products.
If you opened a new physical store, would you go deep in the woods and put it in
a place that could only be accessed after a 2-hour hike?
Of course not.
It would make a great getaway but a
horrible store location. The same thing can happen online. A confusing layout,
difficult product discovery, and lack of support will hurt your marketing
efforts.
In either scenario, it would be hard to
do business with you. Unless you’re one of kind in every aspect, people won’t
work too hard to give you their money.
The takeaway is to make sure people can
access your products and services easily and conveniently, before you launch
any campaigns.
8
Retail Marketing Strategies to Drive Sales
There
are a lot of specific aspects of your retail business that must be addressed
with the right marketing tactics to boost sales, and below you will find eight
marketing strategies to consider adopting.
1.
Create impressive storefronts
The
growth of e-commerce stores has forced brick-and-mortar stores to increase
their experiential appeal. Customers have multiple options when it comes to
buying products, and for a retailer to stand out, it must offer a great
experience. And although many businesses are fond of overlooking this important
aspect of their retail marketing, the only way to attract passers-by to your
online or physical stores is to optimize the design of your storefronts.
For
brick-and-mortar stores, you have to design your storefront for better
visibility with custom designs and adopt a minimalist approach to the
storefront design that subtly attracts customers instead of screaming at them.
Even
for e-commerce storefronts, including your social media platforms and websites,
considerations like website loading speed, website navigation, blog posts and
other valuable content, mobile optimized user interfaces and SEO visibility can
serve as a pull or push mechanism to bring in customers or chase them away.
2.
Motivate your employees with better wages and compensation packages
Your
employees are your retail business’ brand ambassadors, and you need to give
them incentives in order to get the best results. When you compensate your
employees properly, you can create an exceptional impression on your customers
with memorable experiences.
If
you’re able to hire and maintain customer-oriented, long-term and committed
employees, you’re likely to increase your customer retention rate, reduce
employee turnover and increase profitability. Also, if you motivate your sales
team with compensation packages, they are incentivized to work harder to
increase sales.
You
can also encourage sharing of new marketing and customer relations management
activations with your staff because they might just have a better contextual
understanding of your customers and potential customers because of their
one-on-one dealings with them.
3.
Provide adequate employee training
Substantive
employee training can make the difference between you and your competitors. The
experts from EssayOnTime recommend
arranging regular training sessions and conferences to retain employees and
keep up with industry trends. If you neglect to train your employees, your
company will be left behind in your niche.
A
retail business that neglects the training of employees will eventually
struggle to stay in business. A good practice that will ensure you have great
employees with good customer relationship management, retail selling and
upselling skills is to train them as soon as they’re hired and conduct
recurring training annually or every six months to reorient them based on new
consumer trends.
4.
Understand the market
To
increase sales, you need to do market research to get in-depth retail market data
relating to sales performance, store portfolios, and competitor analysis, as
well as keeping track of rapidly changing retail and consumer trends.
5.
Engage your customers
Give
your customers a reason to love you. This does not involve ineffective, non-subtle
marketing techniques like situating a greeter at the storefront to greet
incoming customers with scripted lines like, “Hi, how are you doing?” The best
way to make customers loyal is to be helpful to them. Answer their questions as
truthfully as possible. Relate from their perspective and answer product
questions from your own user experience or from real customer user experiences.
When
your customers are leaving, thank them for their purchase and invite them to
return, leaving a memorable experience with your customers. You should also
solicit feedback from customers, post questions and answers online, engage your customers in your market research, and
respond to customers’ positive and negative reviews. Additionally, you can
offer discounts and coupons for returning customers among many other engagement
techniques.
6.
Leverage social media capabilities
Almost
all businesses, retail or not, have some form of social media presence.
However, very few of them have fully leveraged social media capabilities. You
can invest in social media advertising which makes it easy for you to get in
front of people likely to buy your products and convert them or send them into
your sales funnel. With the importance of social media to many people’s lives,
you can start targeting customers who are specifically interested in the
products and services you offer in your retail business, online or offline.
7.
Smart remarketing
You
can increase your customer retention rates through remarketing. Shoppers
are usually distracted and can easily forget their positive shopper experience,
whether at your online stores or at your brick-and-mortar stores. You need to
remind them of their positive experience by engaging previous shoppers either
with promotions and/or discounts based on past purchases or current consumer
trends.
8.
Tweak your pricing strategy
There
are always changes in product demand due to seasonal or market changes, as well
as consumer trends and competitor actions. Thus, you need to stay on top of
your pricing game to keep your inventory moving. To do this, you must
frequently change retail prices strategically in a way that
attracts customers while covering costs and bringing in reasonable profit.
No comments:
Post a Comment