Retailers are now operating in a playing field that’s more challenging than ever. These days, not only are you up against merchants who are selling the same products for less, but you’re also dealing with apps and services that make it easy for consumers to find deals or alternatives.
And while the knee-jerk reaction to such trends would be to lower prices or offer huge deals, these methods won’t produce sustainable retail success. Instead of slashing prices, retailers must learn add value to their products, services, and brands. Doing so will not only attract and retain the right types of customers, you’ll also differentiate yourself from your competitors.
Before getting into the strategies on adding value, we first need to understand the reasons consumers choose to buy merchandise regardless of the more expensive price tags.
According to vouchercloud, a service that delivers local deals in Australia, the top 5 reasons customers pay more for the same products are: items are easy to purchase, fast order fulfillment, prestige, low cost of ownership, and exceptional customer service.
In this post, we will explore how you can leverage these factors (and more), so you can add value to the shopping experience.
Make shopping faster and convenient for customers
The words “instant gratification” are music to the ears of modern shoppers. Many consumers are pressed for time, and a good chunk of them would choose to shop with retailers who can fulfill their orders quickly, even if it means paying a little more.
This is why you should invest in faster order fulfillment initiatives. For instance, you could integrate your online and offline stores to allow customers to shop across multiple channels. Doing so will also enable you to provide services such as click-and-collect, which not only saves customers shipping costs, but also gives them the option to get their hands on their purchases on their own time.
One retailer doing this well is Number Six. This menswear retailer integrates their POS and inventory system with their digital store, allowing them to implement omnichannel retailing and give shoppers the ability to buy online, and pick up in-store.
Do note that speeding up the shopping experience isn’t just about order fulfillment. It’s also about how quickly you and your associates can assist customers. The faster you can attend to customers, the more likely it is that they’ll shop with you. Conversely, the longer you keep them waiting, the more time they have to change their minds and take their business elsewhere.
This is true whether they’re shopping in-store or online, so see to it that your employees are able to assist customers as soon as possible. You can do this by providing them with the right tools and technologies.
For instance, you could use a robust customer management solution that enables your staff to easily access people’s purchase histories and previous brand interactions, so they can quickly access customer information.
Or better yet, if you have a brick-and-mortar store, why not arm your associates with mobile POS systems, so they can get the information they need and ring up sales from anywhere in the store?
Beef up your guarantees and credibility
Having the right guarantee could be just the thing to sway shoppers towards choosing your store over the competition. People want to feel confident about their purchase decisions, so it’s important that you give them a strong guarantee to make them feel safe about what they’re buying.
You can, for instance, offer to give their money back if they change their mind about an item. Or, you could extend your deadline for returns, so customers would have more time to test a product.
A great example of this in action comes from Zappos. As David Rekuc points out on Marketing Land, many products on the site can be bought at lower prices elsewhere. But people still choose to shop at Zappos because of the company’s strong guarantees (free returns for up to 365 days), unbeatable customer service, and brand credibility.
Speaking of which, establishing credibility is also a must, so be sure to display third party validation and social proof in your store or website. You can do this by showing off awards or certifications and by displaying real reviews from your customers.
Ramp up your customer service efforts
Customer service is one of biggest factors that can differentiate you from companies selling similar products. That’s why it’s critical to invest in a strong customer service strategy.
The first step is to empower your workforce. As mentioned above, you need to arm them with the technologies that would enable them to serve customers in the best possible way.
In addition, you also need to adequately train your staff and see to it that everyone executes your customer service strategy correctly. Invest in training materials, tools, and methods that would facilitate effective learning and ensure that your team performs at their best.
Consider repositioning your brand to increase perceived value
Value isn’t always a concrete notion. In some cases, value lies in the perception of the customer. As vouchercloud puts it, “value is in the eye of the beholder.”
Consider the journey of lobster from prison food to fine dining. In the 17th, 18th, and early 19th centuries, lobster was so abundant that it only cost around $0.11 a pound and was served to prisoners and servants.
However, in the late 19th century, lobster was rebranded as an exotic dish, and in the years that followed, it was served in restaurants and members of the upper class began eating it as the main course. Soon, conservation laws leveled out lobster supply, causing an increase in price. And today, a pound of lobster costs about $7.95.
The example above teaches us that tweaking the angle or story behind a product can alter its perceived value and entice customers to pay more.
See if you can apply this lesson in your business. Look at new angles or marketing tactics to reposition your brand or products. Could your products be perceived as premium compared to other brands? Are there any stories behind your business worth telling? Explore these options to determine if they’ll work for your business and audience.
Compete through creative and thoughtful assortments
Some retailers think that they can stand out simply by adding more products, but this move can backfire. Shoppers these days are already overwhelmed with too many choices, so widening your assortments could actually turn customers away.
What you should instead is compete through creative and thoughtful assortments, and establish yourself as a specialist that consumers can trust. In other words, don’t just stock up on more merchandise, stock up on the right pieces, and present them to the right people.
“If you can extend your expertise to shoppers through a curated selection of items, that is very, very powerful. See, shoppers have so much information that they are overloaded all the time, so being a specialist is one of the best ways to differentiate and compete against retailers like Amazon.
A retailer can say, ‘I’m an expert in fashion, or I’m an expert in eyeglasses (e.g., Warby Parker). I’m not going to give you every single choice out there; instead, I’m going to give you these five choices. And these are the five that I know you need, because you either filled out a form or you checked out a style guide, or because I’m just an expert in this specific category, and I know the trends and what to recommend for you.’”
Check out what online furniture platform Remote Stylist is doing. In order to address the overwhelming task of furniture shopping, the company offers free Stylists to assist customers and save them from having to browse through numerous furniture pieces.
Customers would simply tell their Stylist what they need, what their design preferences are, and what their budget is, and the Stylist will then pull out options and handpick them for the customer.
Implementing a strong loyalty program with great rewards and perks could entice consumers to choose your brand over others.
As Scott Garell, CEO of shopping platform Goodshop.com said, “Incentivized innovations (such as brand memberships and reward programs) are a great tactic for attracting shoppers, as consumers are much more inclined to interact with retailers when they are offered loyalty programs with social incentives and rewards.”
Incentives would work even better if they’re exclusive. Consider what Goodshop is doing. The shopping site, which also makes donations for certain purchases, holds a yearly event called Goodshop Sunday where members “can expect to have access to exclusive deals and earn double the donations for their causes.”
If you have loyalty program, find ways to make it more compelling. Perhaps you can sweeten up the perks, or like Goodshop, you could start running special events and initiatives.
Invest in corporate social responsibility
Consider starting philanthropic initiatives. Not only will you help make the world a better place, but you’ll also make your brand more enticing in the process.
Studies by Cone Communications and Echo Research, found that 87% of consumers factor in corporate social responsibility (CSR) when deciding where to shop, and that “given similar price and quality, consumers [91%] are likely to switch brands to one that is associated with a good cause.”
There are plenty of ways to give back. Some retailers, such as Warby Parker, have pledged to donate a portion of their revenues to charity, while others, such as Nasty Gal, have set up scholarships. Sometimes, giving back can be as simple a sponsoring a local event or community initiative–this is something we see a lot in SMBs.
Explore your CSR options, and implement a program that makes sense for your business.
Add value through services
Tying in services with the products that you sell can make your offerings more unique and compelling. If you’re trying to add value to your merchandise or buying experience, consider offering services that go with them.
For example, if you sell apparel, you could start offering personal styling services. Selling furniture? Why not provide home consultations to help shoppers select the right pieces?
Take for instance, Shoes Feet Gear, a footwear retailer that also serves as a podiatry clinic. Aside from selling shoes and training gear, the company also has an on-site podiatry clinic that offers services and treatments for foot, knee, and heel pain, among others.
You don’t have to slash prices to compete with retailers selling the same merchandise. Often, the most effective way to go up against such merchants is to add value and offer experiences that set you apart.
Do you have other ideas on how retailers add more value to their products or services? Let us know in the comments.
Learn more in our next webinar
Looking for a way to win more customers without competing on price or products? Join leading retail expert Erin Harris of Innovative Retail Technologies for the webinar, How to Win More Customers without Competing on Price or Products. Erin will be discussing proven ways on how to offer surprise-and-delight services and experiences that set you apart from competitors.
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+.