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Retailers are facing a period of major challenges. Changes in consumer buying habits compel industry professionals to reinvent the way they run their business.
Those who do not adapt and insist on old practices will be left behind, especially because of the increasingly competitive environment. On the other hand, the opportunities are great for professionals who understand the new moment.
Just look at Amazon’s strategy, for example, which is increasingly innovating in retail market with the launch of Amazon Go, the opening of physical stores and the acquisition of Whole Foods are some examples of how disruptive, but as cyclical, are business strategies.
After all, how to face these barriers to grow in modern retail market? To go deeper in this question, Novidá asked this question to six of the biggest names in the retail industry around the world. We then share what they think about how to leverage a retail business and gain competitive advantage to succeed.
We live in a period in which buying habits and consumer needs are constantly changing. In this way, more than ever, the retailer needs to listen to the demands of its customer and be agile to serve them.
“Simply open your eyes and ears to consumer behavior. Pay attention to how society is changing, understand what today’s people are looking for and adapt to meet their needs. The only way to stay competitive these days is delivering value “, explains Blake Morgan, an American consumer futurist who specializes in consumer experience, and author of More is More.
In her book, Blake rightly defends the idea that companies need to have more energy, focus and resources to create a memorable customer experience and thus be able to lift higher flights. The idea is to differentiate itself from the competition with something that really makes the difference: generating customer value in all their Lifetime Value.
The great differential of physical stores is precisely its employees. At least that is what Will Roche, an American consultant who passed thought various retail-related ventures and Founder of RocheonRetail. For him, people are the main element of any manager of the segment.
“People have always been and always will be the key factor in retail growth. With the ability to shop online and receive the product the next day, your team becomes your main strategic weapon. Technology can bring many benefits, but it is the people who will be the differential of your brand and that will allow the creation of a good customer experience”, says the expert.
Before thinking about growth at any cost, retailer needs to structure their long-term goals. From this, they will be able to plan a strategy to achieve the desired objectives. Carl Boutet, a Canadian consultant specialized in retail industry, believes that such strategic thinking is extremely necessary when you are planning about growing:
“First, understand why you want to grow. Is it to increase market share, enhance brand reputation or become more powerful? This will influence your strategies and the resources needed to grow, “he explains.
In addition, Boutet reinforces an interesting reflection: Is it necessary to leverage your business? There are other points that could be improve in the store, rather than focus exclusively on sales growth.
“I suggest that the retailer focus first on being more relevant, increasing engagement, and understanding how their value proposition impacts the intended audience. Thus, it is much more about creating a connection with the consumer than leverage the product “, concludes.
Trying to reach as many people as possible is not always the best strategy for physical retailing. On the other hand, focusing on being assertive with your audience is a smarter strategy.
“Know your target consumer. You cannot and do not need to appear to all people. Who are you focusing on? What do they look for when they go shopping? How can you deliver what they want in a better way than their competitors?”, asks Mike Anthony, a British consultant and speaker in the retail marketing field.
For the Consumer Goods Industry, Anthony’s advice goes along the same line. He also warns that these brands need to know and look at different personas: “You have to look beyond the target audience and understand who the buyer really is (after all, they are different concepts). So find out what retail channels will be important to you in the future. Set up your business to meet the needs of three customers: the target audience, the buyer, and the retailer, “concludes Mike.
These advices are also worth for retailers who own their own product lines, such as franchises and supermarkets.
It was the time when managers used the experience and intuition to make decisions in the physical retail. With the advancement of new technologies, like IoT and Big Data, it is possible to collect real data from the public in the store, which allows more assertive strategies and measure customer reactions and take action based on data.
“Traffic metrics and conversion rate are essential to boost sales. There are several technologies to collect this data inside and outside the store and they are increasingly accessible. Once you measure the number of people passing through the site, you can cross-reference that data with your sales number to get the conversion rate”, explains Jan Davis, American Angel Investor in retail technology companies and Strategic Marketing Specialist.
The data also allows comparisons between stores to understand which point of sale has the best performance. Once everything measured and analyzed, the retailer must make important decisions for your business, based on real data and can experiment other strategies in-store to increase sales, retention, etc.
“Rewarding store managers for increased conversion or changing the average product ticket can bring significant differences in store revenue. Understanding traffic and the conversion rate also helps retailers rethink, which stores should be closed should a cost cut be necessary”, Davis concludes.
We talk a lot about the relationship with customers and employees, but the retailer cannot forget the operational processes that sustain the entire business. In some cases, the way out for growth may be in optimizing activities that are not necessarily at the front of the store.
“The key factor is in presenting cases that have a clear ROI and are not far from the reality of retailers. Focus on the operational side rather than the customer facing side. Consumers are not willing to give up their privacy right now”, argues Paula Rosenblum, a Forbes Magazine columnist for the United States and co-founder of Retail System Research
The secret to success in retail demands hard work in many business aspects. The truth is that this is an extremely complex segment where there is no universal success recipe to leverage sales.
However, there are a clear number of actions to improve the business and opens up a range of opportunities.
If the retailer develops strategies with clear plans for growth and a willingness to execute on a day-to-day basis the goals set by always following robust and measurable metrics, analysis and decisions, the odds of success and prominence of your retail in the face of competition increase considerably.
To leave the decisions based on feeling, professionalize all the decisions, and obtain all the benefits related above passes thought all the tips put here by the experts.
Anyone who says that traditional brick-and-mortar retail has died is mistaken. Whether it is through improved customer experience, technology, the formation of a good team or operational processes, there is still a lot of opportunities to grow this kind of retail operational model.
Great changes and even more sales!
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