Eight Mistakes to Avoid to Win at Retail
After working with many retailers over the past 15 years, I’ve been exposed to visionary players and retailers who are struggling to make their sales goals. There’s a drastic difference in the way in which the two groups operate. I’ve actually learned more from the later group…..about what NOT to do. Here are 8 mistakes that happen often from retailers who are struggling.
Mistake #1 –Try Be Everything to Everybody
Sometimes, retailers are so desperate for sales they will do whatever it takes to get people in the door. One day it’s promotions catering to baby boomers, the next day it’s a content marketing strategy focused on Gen Z and then an email campaign for first time parents. These retailers carry every fad product, regardless if it makes sense for them. All this does is dilute the brand and confuses the customer. Retailers need to put a stake in the ground and define who their target customers is, what problem they need solved and come up with a strategy to solve it.
Mistake #2 – Run the same media mix every year and expecting better results
Another Sunday circular. Another direct mail piece. A daily slew of emails to every person on their mailing list. Many retailers have gotten complacent in their marketing mix, yet they expect different results based on the creative or offer. What innovative retailers do is test. Try new things. Create a control group. Understand the impacts and adjust their marketing mix accordingly. Doing the same thing over and over and expecting different results is the definition of insanity.
Mistake #3 – Not investing in store up keep
Have you gone into a store that just looks run down? Watermarks on the ceiling, fixtures falling apart, signage that looks so old you think it might be a vintage throwback campaign. These things don’t inspire confidence to me as a consumer. Store upkeep is expensive, but it’s a necessary investment. If a retailer doesn’t care about their store, why should a customer?
Mistake #4 – Lack of communication & training to the front line employees
I had an experience last week when I went into a national coffee chain wanting a specific tea-beverage that I had at another location, but I couldn’t remember the name. At the other location, I had been handed a laminated tea menu that listed all of their tea blends and specialty drinks. I asked the barista for the tea menu and he looked at me like I was crazy. While trying to explain what I wanted, I saw the tea menu behind the counter. The young man said he had never seen that before and thanked me for teaching him. Net net, I got what I wanted, but it wasn’t a great experience for me or the employee. Not only does this apply to products sold, but marketing as well. Front line employees need to know what marketing the customers are seeing. As we have the ability to target customers better, there is a chance that employees aren’t seeing the campaigns they used to. Great retailers have excellent communication channels between their management & the front line so everyone is in the loop. In addition, innovative retailers also have a feedback mechanism to get constructive feedback from the stores back to the decision makers.
Mistake #5 – Ineffectively use customer data
Email addresses. Purchase data. Website analytics. Social media stats. Customer Type. Demographics. Payment preference. There are so many different data points thrown at retailers, it’s easy to see why many don’t effectively use it. They might send emails to their database and know their customer counts, but there are so many ways to optimize data to make sound business decisions. Successful retailers mine that data like they are looking for diamonds and then create personalized marketing plans for different customer segments. And all data works together to tell a story. But the data is used in a meaningful way that can be actioned upon. I’ve also seen retailers get so hung up on the data and go so granular, they get into “analysis paralysis” and nothing gets done.
Mistake #6 – Not showing loyal customers the love
Loyalty programs are a tricky thing. Do they really drive customer loyalty or do shoppers join them all and shop where they can find the best deal? Having a loyalty program for the sake of having one is a big mistake. The two main reasons for having a loyalty program should be 1) customer identification & data collection to use for targeting (see Mistake #5) and 2) rewarding customers for their loyalty. The value proposition of a successful loyalty program is dependent on the retailer, but it has to be valuable to the customer. The best loyalty programs are based in customer insights and tested and optimized in the market place.
Mistake #7 – Thinking national and not catering to the local communities they serve
According to research, 70% of all retail dollars are spent within 15 minutes of a consumer’s home or office. Savvy retailers are tuned into regional and even neighborhood differences and adjust marketing messages, store formats and assortments accordingly. Consumers who live in sleepy beach towns are much different than those who live in a bustling metropolis and their needs are different as well. In addition to merchandise & branding, national retailers need to become part of the local community. What that looks like is different for each retailer, but it’s things like supporting schools, the local chamber & local non-profits.
Mistake #8 – Not investing in technology
Machine Learning. AI. IOT. Chatbots. Marketing Automation. Last Mile Delivery. Mobile Experience. AR. Blockchain. The lists goes on and on with new technologies that are really differentiating the innovative retailers from the rest. To even dabble in these cutting-edge technologies, it requires resources (capital, expertise, people) that some retailers aren’t willing to invest in. As more and more retailers and brands embrace and optimize new ways to serve their customers, it ends up being tablestakes and leaves other retailers in the dust.
This is a truly exciting time to be in retail. The playing field is being titled and there are definitely wines & losers. It’s inspiring to look at the market leaders to see what they are doing, it’s just as fascinating to look at what the fast followers and struggling retailers are doing wrong. As retailers continue to go out of business (I’m looking at you Sears), and every starts performing their autopsy, you can refer back to this list and identify what they did wrong.