How can I make sure my business succeeds in the coming years?
If you’re a retailer in today’s market (and you intend to be around in the future) chances are, some variation of the question above has crossed your mind. The retail landscape has gone through tremendous change in the past few years, and keeping up with the industry — and your customers — can be challenging.
Whether you’re feeling the pressure, or you just want to stay on your toes and future-proof your retail business, it’s important to be in-the-know with the latest trends and best practices in the industry.
To help you do that, we caught up with one of our favorite retail strategists: Carl Boutet. With over 20 years of direct retail experience (not counting his high school days), Carl has worked as a retail strategist and a business developer, collaborating with retailers such as Costco Canada to enhance the customer experience and promote practices that increase efficiency and improve the bottom line.
Currently, Carl is a Retail Strategist at Genetec, a global provider of world-class open-architecture IP video surveillance, access control, and license plate recognition solutions.
In our conversation, he talks about the top trends in the retail industry and what stores should do to stay competitive.
Check it out.
Analytics is — and will continue to be — a big component of retail success
When it comes to top trends, Carl says that analytics is “definitely a big one.” Retail analytics (i.e., understanding what to measure, how to do it, and why) is going to be a key competency for any retailer that’s going to be around in five or ten years, he says.
According to him, with the lines between digital and physical retail continuing to vanish, it’s more important than ever to combine data from multiple channels. Doing so will enable you to better understand your customers and anticipate their needs.
“[Analytics] is a big trend from SMBs who’ve traditionally gotten to know their customers using their intuition and what they knew about their communities. But I think retailers are increasingly leveraging data in their business.”
There’s a lot of ways that retailers can use data, says Carl. For starters, there’s loyalty and CRM (Customer Relationship Management). Many retailers can use customer data to cultivate relationships with shoppers and turn them into loyal patrons.
What should SMBs measure?
So, what exactly should you measure? If you’re new to retail analytics, Carl recommends starting with your foot traffic. This is a great starting point, and it will help you “measure what the opportunities are.”
From there, you can start looking into conversions by tracking the number of customers who actually made a purchase. Using data will also help you measure and improve how you’re utilizing space and whether your existing store setup and technologies are working out for you, he adds.
Focusing on the customer experience
The term “customer experience” gets thrown a lot in retail conversations, but there’s no getting around the fact that experiences should be a massive focus for retailers.
As Carl puts it, the future of retail is “going to be less and less about the product and more about what people are going to do and experience in the store.”
An important step towards creating better customer experiences is defining the outcome that you want to have. According to him, the ideal outcome that’s often tied to experience is customer engagement.
Here are a couple of ways to create experiences that engage your customers.
Engage shoppers through community-centric initiatives
“The one I sort of default to all of the time is community. Anything you can do to create an experience while also building a community is a good starting point.”
One example of a retailer that does this well is Lulemon, the company that put “athleisure” on the map. Lululemon has invested a lot in fostering a sense of community. The retailer regularly holds in-store events and classes to encourage customers to connect with each other — and with the brand.
“If you’re fortunate enough to be in a space where there is a direct correlation between an activity or a pastime or a common interest around the retailing you do, [then use that advantage in your community-building efforts],” says Carl. “For example, if you’re a home furnishing store, do décor classes. If you’re an appliance store, do something around cooking.”
Making product discovery more interesting
Let’s not forget that the act of finding and discovering products in-store is, in itself, an experience. If you can make those parts of shopping more fun and interesting, you’ll go a long way in enhancing the retail experience for your customers.
As an example, Carl talks about Costco. The retail company wanted to create a “treasure hunt” experience, and to accomplish that, they continuously moved products around and introduced new merchandise.
Another great example of a retailer that does this well is TJX. The company’s sales have been growing for 33 straight quarters now, and its annual sales are higher than Nordstrom and J.C. Penney combined.
How does TJX do it? Two things: it moves fast, and it empowers its buyers to make decisions themselves. The WSJ reports that TJX has over 1,000 buyers, each controlling millions of dollars and are given the authority to “cut deals on the spot.” That’s in contrast to other department stores, “which can take weeks to review and approve orders.”
Once the deals are done, the company ensures that new products hit the sales floor as soon as possible. There’s even an internal mantra at TJX called “Door to the Floor in 24.”
As a result, TJX always has a fresh assortment of merchandise that keeps buyers on a constant “treasure hunt.” Shoppers know that great items go quickly at T.J. Maxx, so they tend to buy on the spot.
This treasure hunt experience also keeps people coming back. There’s that feeling excitement in knowing that you can score a great deal whenever you walk into a T.J. Maxx store.
It starts with your culture
Carl emphasized the importance of having a solid organizational culture in this age of retail change. Having tools and ideas around retail analytics and customer experience is great, but they will only work if you ingrain a mindset of innovation and agility in your culture.
Companies that understand the value of trial and error and moving quickly will be more equipped for retail success in the future, so strive to instill these values in your team. This can be done by bringing in the right leadership or by taking the time to ensure that your employees know what it takes to thrive in the coming years.
About Francesca Nicasio
Francesca Nicasio is Vend's Retail Expert and Content Strategist. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and be more awesome overall. She's also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores. Connect with her on LinkedIn, Twitter, or Google+.