The retail landscape is very different to a decade ago with potential customers having more options and higher expectations, and as a retailer, you must act now to ensure you keep your existing customers and gain those potential customers out there.
There are certain trends that are having a significant impact on the retail industry: demographic variations, multi-channel, mobile commerce, personalized messages and changes in distribution. Each of these trends can influence retail sales, but adapting to all of them will give you the benefit of becoming a prosperous and successful retailer.
Different demographics have different needs. Take a look at the various section of society segmented by age alone:
Maturists born pre 1945
Baby Boomers born 1945-1960
Generation X born 1961-1980
Generation Y born 1981-1995
Generation Z born after 1995
As shown above, all of them could be potential customers even though they have various preferences. As a retailer, it is essential to communicate effectively and remember that different demographics can react differently to different communication and content. But what are some communication routes that are available to use?
Years ago, we had brick and mortar stores and customers had to come in to buy products. Now, however, they can order from brochures, online, or look up reviews online before coming into the brick and mortar store. According to We Are Social, the UK currently has a population of 64.91 million people. A huge 92% of these people are Internet users, creating a huge potential for e-commerce business. In 2015, 77% of UK Internet users made a purchase online, so it is imperative to have a presence online as a retailer. Even though a lot of potential customers do their research online, they still like to come into the store to see, feel and purchase the actual product.
According to emarketer.com, in 2016, 37.1% of mobile phone users made a purchase on their phone in comparison to 27.7% in 2014, and this number is likely to increase to 44.7% by 2020. 30% of these purchases were made on tablets and the other 70% were on smartphones – so as a retailer, it is a plus to have a mobile-friendly e-commerce site in place. The mobile experience can also compliment customers in-store buying experience as they can check prices, reviews and do all the research before purchasing.
Many potential customers are looking at advertising messages being personal. With increasingly sophisticated algorithms and predictive digital logic models that can analyze transaction data and digital media trends (what is popular on social media), potential customers may already be getting those messages from the competitors. Requesting user reviews make customers feel that their opinions are valued, and can encourage customer loyalty. Nowadays, it is important, as a retailer, to stay customer-centric and not product-centric.
Changes in distribution
Some retailers already offer fast delivery options – like Amazon. Existing and potential customers are looking for the most cost-effective and convenient option available. Delivered items can now be sent to secure delivery locations: offices, lockers, pick up boxes, other retailers and also right to the front door. If a competitor can offer better delivery options, then that potential customer could pick the better delivery option. More manufacturers are now also selling directly to customers, so it is an advantage to have an edge over the delivery of the item. Competition is also more global now, as more and more customers shop online and the delivery option may be cheaper (but tends to take longer) - China is a prime example of this.
Are you aware of how your customers shop? Make sure to better understand their preferences and wants and needs in order to build a stable and loyal customer relationship.