While ecommerce heavyweights such as Amazon and Zappos have made things a bit more challenging for offline retailers, this doesn’t mean that brick-and-mortar stores can’t compete with online merchants.
With the right people, marketing strategies, and products in your stores, you’ll find that going up against ecommerce stores is entirely doable.
In this post, we’ll talk about the ways that retailers can compete with online merchants. We’ll discuss the advantages you bring the table, as well as the various sales, pricing, and product strategies you can implement to attract and convert customers.
Let’s dive in.
1. Emphasize speed and convenience
Online shoppers almost always have to wait at least a couple of days for their purchases to arrive (or pay handsomely for overnight shipping).
As a brick-and-mortar merchant, you can use this to your advantage by highlighting your ability to provide instant gratification to customers. When communicating with shoppers, emphasize the fact that they can walk out of your store with their items instead of having to wait or pay for shipping.
When selling speed and convenience, it’s best to market to those who are right in your neighborhood. Deborah Sweeney, CEO at MyCorporation.com, advises retailers to put themselves in front of local customers. “Brick and mortar stores in smaller cities and towns still have convenience on their side. Remember that even with Amazon Prime, free shipping still takes two days,” she says.
“Make yourself a visible, local presence both in real life and online. That means using whatever retail marketing tactics work to ensure people locally know about your company and updating your online presence so customers can easily find your store during the research phase of the purchase process.”
Consider offering same-day delivery
If possible, find ways to offer same-day delivery to your local customers. Grain & Vine, a boutique wine and spirits store in New York, does this really well.
In addition to selling in-store and online, Grain & Vine offers same-day delivery through apps such as Postmates, Minibar, and Drizly.
So how do they juggle their POS, ecommerce, and delivery apps? Two words: tight integrations.
Grain & Vine takes advantage of the solid integration between Shopify and Vend to ensure that they’re able to stay on top of sales and inventory. The two systems can “talk” to each other and share data in real-time — so when orders come in, Grain & Vine’s inventory is synced across its physical and digital stores.
As for the different delivery apps, they use an XML file to sync their inventory with the apps.
“We’ve created an XML file that constantly pings our Shopify platform for inventory updates. And because Shopify and Vend integrate almost natively, both inventories are always in sync. Those XML files are then being sent to our providers [i.e. delivery apps] and they, in turn, have constant access to updated inventory. That way, we’re never in a situation where they sell something we don’t carry,” shares Grain & Vine owner Michael Nagdimunov.
If you’re going to connect different platforms, take a leaf out of Grain & Vine’s playbook, and choose platforms with tight integrations. To make things easier, go for solutions with existing integrations so you won’t have to develop one yourself.
2. If your store is in a mall or shopping center, work with your landlord
You and your landlord want the same thing: more foot traffic. If you haven’t done so yet, work with them to bring in shoppers to your location.
Consider the case of Nebraska Crossing Outlets (NEX), a shopping center that sits between Omaha and Lincoln. The population in the area was only 6,000 in 2013, and the location isn’t very accessible — shoppers had to drive an hour or more just to get there.
Yet the outlet center is thriving. The NRF reports that “since its opening, NEX has surpassed expectations in virtually every way. In its first year, the mall saw $140 million in sales…[and] A $15 million expansion that will add 70,500 square feet of retail space is already underway.”
One of the reasons for its success is that NEX is always communicating with its stores to understand each retailer’s strategy, and it collaborates with them to come up with promotions and tactics that would drive customers to the location.
For example, when Kate Spade was running behind its monthly sales goal, the store manager asked NEX’s marketing director for help. NEX took immediate steps to assist Kate Spade and within minutes, they put up an offer on the mall’s Facebook page and its mobile app.
The result? According to the NRF, “By the time the store closed, it had done an additional $12,000 in business, blowing well beyond its monthly sales goal. Customers told store employees they’d seen the promotion on social media and the app, and it had been their reason for coming in.”
Another mall that’s doing a good job working with stores is Paseo Colorado in Pasadena, CA. Every month, the shopping center puts the spotlight on a particular store and markets the shop through signage and by promoting special offers and events.
3. Provide services and help people find what they need
Introduce in-store services that online merchants can’t match. Product curation and personal styling services are some of the things you could offer. Sara Weinreb, the founder of apparel store IMBY, makes it a point to connect better with shoppers through excellent–and personal–customer service.
“When people shop at my store, I can help them define their personal style, find items that match their budget and needs, and provide them with excellent customer service. Options like this just are not available on Amazon, where it’s your job to sort through the thousands of relevant items for each of your searches.”
Web designer and brand strategist Sandra Scaiano is doing something similar with one of her clients. “I’m working with this client to create a strategy where the store can inform their customers that they do things like measures your child’s foot. This is a service that needs to be done regularly to ensure proper fit. Ordering two pairs of shoes online for every child so you get the right fit, really is a nuisance.”
“I think these types of personalized service are just the things that retailers need to focus on to keep dollars local and their business growing,” she adds.
Need more retail inspiration? Check out Poopsie’s, a fun, funky shop in downtown Galena.
In addition to stocking up on great merchandise, they also have a service called Poopsies Live, in which a “Poopette” (i.e. personal shopper) helps customers find the right products via a Facetime or Skype a call. All you need to do is fill out a questionnaire then make an appointment. A Poopette will then put together some gift ideas and showcase them on your video call. And when you find something you like, they can ship the item to your or you can pick it up in-store.
“Our store is a small store in a unique, historic main street, and our “special sauce” has always been our amazing customer service and interactions with our customers,” shares Poopsie’s owner, Alana Turner.
“Customers had mentioned many times over they wished we had a location closer to (fill in the blank) because they loved what we helped them with and they enjoyed their shopping experience so much,” she explained.
“So that got us thinking…. In today’s world, everyone wants convenience, lightning speed and great customer service. How can Poopsie’s provide that to our customers? Poopsie’s LIVE was born.”
“Customers contact us and let us know what their gift needs are and we schedule a time and date to do a Facetime appointment. Their personal shopper will Facetime the customer and go over the best gift ideas for their needs. We have all pulled suggested items together ahead of time to save the customer time. And the customer is able to see the item in person, ask us questions, give us feedback and in the end know that they are getting the best gift for their needs. Anyone that has used the service thus far has loved it and I feel confident will use it again.”
4. Go beyond commodities
Stock up on merchandise that customers won’t find anywhere else. As Victor Wong, CEO of PaperG said in this Quora thread, “anything that can be traced to an ISBN or SKU number is mass produced, mass marketed, and mass discounted. Local retailers need to focus on stocking more locally produced items or uniquely distributed ones, so they aren’t competing on price directly.”
One thing you could do is create your own merchandise. Perhaps you could introduce unique designs or flavors.
Check out what fashion boutique Covet is doing. It’s owner, Adrienne Wiley, designs the jewelry that her store carries. In doing so, she can sell unique items that shoppers won’t find anywhere else.
Another cool way to de-commoditize your store is let customers “build” their products.
Check out what Sugarfina, a Pasadena-based candy store is doing. In addition to selling yummy sweets for adults, Sugarfina also lets customers build their candy bento boxes. Just select a box size and design, then fill it up with various candies of your choice.
It’s a very cool experience and it enables customers to explore products in a fun (and delicious) way.
Learn more about increasing your bottom line by checking out Vend’s guide to increasing sales. This handy resource offers 10 proven tactics for boosting retail sales and improving your bottom line.
Specifically, you will:
- Discover how to turn savvy shoppers into loyal customers
- Learn how to add real and perceived value to each sale
- Discover the most effective ways to set yourself apart from your competitors
5. Be flexible with payments
Stores that are flexible with payments can lure customers away from online sites. AJ Saleem, Academic Director at Suprex Private Tutoring, says that Best Buy’s credit card, which lets him pay off his balance over 18 months interest-free, is one of the reasons he chooses to shop the store rather than Amazon. “As a startup owner, this is extremely beneficial because cash flow is limited for a startup company,” he continues.
Now, this doesn’t mean you should start offering credit cards to your customers. However, you may want to consider being more flexible with payments. If it makes sense for your business, why not look into partial payments, split payments, and layaways? Giving shoppers more options for how they pay could be just the thing that sets you apart from your competitors.
6. Be competitive with pricing
Price matching is a common tactic that brick-and-mortar stores use to convert customers who’d otherwise shop online. It’s a decent strategy, but it can also kill your profits. That’s why you need to be more creative when pricing products and crafting promotions.
Work with your vendors
One thing you could do is to work closely with your vendors and see if you can lower your cost of goods. Would you be able to purchase materials for less if you meet a certain quantity threshold? Perhaps there are middlemen or administrative costs that you can eliminate from the process.
Another option would be to consolidate orders for other items or with other buyers. Walmart did something similar a few years back when it sought other buying partners to lower its cost of goods.
You wouldn’t want to give too big of a discount to a shopper who would purchase an item at a higher rate. So rather than offering blanket discounts, segment your buyers and send them tailored promotions based on their shopping behavior.
7. Go online
Finally, recognize that you also need to have an ecommerce presence. People are shopping online. That’s the reality. Not having a digital storefront means you’re missing out on a lot of potential customers.
The good news is, creating an online store is easier than ever. Many cloud-based solutions provide templates, drag-and-drop interfaces, and other tools to make it incredibly simple to set up an ecommerce site.
When setting up your online store, be sure to integrate it with your brick-and-mortar locations. Select a solution that syncs inventory and customer data across multiple channels so you can view, update, and manage your online and offline stores without having to deal with double entries or discrepancies.
Keeping your store data in sync also paves the way for omnichannel services such as click-and-collect, which not only adds convenience to the shopping experience but also drives traffic to your physical stores.
Bonus: Compete *like* Amazon
Amazon is undoubtedly winning at modern retail. But what many people don’t realize is that Amazon’s approach can actually be duplicated by every other business out there. You just have to understand their core strategies and make them your own.
Vend had the New York Times bestselling author Bryan Eisenberg as a guest in our Expert Webinar Series. In his keynote entitled Understanding the Secrets to Amazon’s Success, Bryan talks about:
- The core business strategies that make Amazon successful… and how to apply them in your operations.
- How to organize your team for execution and enable your company to effectively keep up with modern consumers.
- How to increase loyalty by being customer-centric and putting shoppers front and center.
- How to plan, measure, and adapt to the changes in the market, so you can stay ahead of your competitors.
Watch it on demand below:
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+.