In retail, price is almost everything. The Salmat Marketing Report 2018 revealed the fact that for 83% of consumers, price is their number one influence on a purchase decision. Two in five shoppers no longer consider brands when shopping, only 18% are loyal to one or two brands and 65% will switch to another brand if a product is on sale or comes with an incentive.
Smaller retailers simply can’t compete on price, but they can compete on value. It was not that long ago that you shopped at the major department stores for the customer service, these days you are lucky to find a manned point of sale. Could you provide your customers value by delivering them a better customer service experience online?
Personalised customer service
In the past century we have been so focused on autonomy, automation and speed to the detriment of customer service. The original local grocery store owner knew their customers personally and would therefore be able to cater to their needs. They would see a pregnant customer and so they would stock up on the supplies that we needed without us even asking.
These days we wander supermarket aisles, picking up strategically placed items and checkout ourselves out at the express checkout. While supermarkets have the data to target customers with specific products and messages, they focus on particular price points to drive traffic and particular purchases. However, the average basket value remains the same and no value has been provided.
People now crave that personalised service because it’s so rare. Small and medium-size retailers can deliver that service as a true value differential. This can be done through your deep product knowledge or a faster easier returns process. Find a way to personalise and individualise your relationships and interactions with your customers. All of that adds to perceived value.
So promote your service and product knowledge and let customers know about your no-fuss returns policy. It will give you greater power in both the bricks-and-mortar and e-commerce markets.
Create content that counts
Just as you’re never going to be able to compete on price, you’re also not likely going to afford the costs of top paid search rankings on Google. Instead you need to be very smart around your SEO and SEM strategy.
First of all, while KMart and Target might be targeting the word ‘skateboard’, the independent skateboard store should instead target particular brands that are exclusive to them, or other keywords related to their products.
Smaller retailers must ensure they have the very best content on their site. As mentioned above, staff of smaller retailers likely have deep knowledge around the product range, and around which particular product is perfect for each type of visitor to the site. Check out our Netstarter slideshare for more information on this around tone of voice, technical terminology, demonstrating how products work together, building a newsletter database and more.
Utilise that knowledge to add content and colour to the product descriptions. Not only is this good for SEO, it will also demonstrate the store’s depth of knowledge to the market, the sort of knowledge that larger retailers such as variety stores and department stores will simply never have.
When people then visit the physical store, they find knowledgeable people who they trust to know all about the products and who speak their language, as opposed to the type of experience they’re likely to have at a major retailer, where they’re lucky if they find a staff member.
Recent Salmat/Australian Consumer Retail and Services (ACRS) research revealed that 59% of shoppers would like an equal balance between using technology and interacting with people when shopping. The human touch is still a vital part of the retail process.
Get the online basics right
In the online environment it’s imperative to ensure you’ve got the basics in place. Start with the basic like Google My Business, get your opening hours, location, map etc in front of anybody who searches in your geographic region.
When a potential customer sees that you’re local, it’s a big draw for them in terms of making a decision where they weigh up price over convenience. Once again, as I mentioned, the human touch is vital. Your product might cost $10 more than the same one they found on Amazon, but you’re just around the corner so they can grab it immediately. If they have a problem then the product is easily returned. If they have questions before or after the purchase then they know exactly who to call.
A lot of people, when they’re researching a purchase, don’t actually want to buy from a mystery business on Amazon, or from a foreign site. They want to buy from a business they know and trust. If they know you are right there and the product is available, or it’s going to be sent from your store in Australia, these are all small pieces of information that act as hooks for customers. They make people realise that they trust your business over someone else, even if ‘someone else’ is Amazon. They see great value in shopping local.
Build services around your products
A customer can go online and buy a wide-screen television bundled with a wall mount, then they have to go home and hang it themselves. Whereas, you can go into bricks and mortar store, buy a TV and a wall mount and they’ll come to your house and install it. That has huge value, because you trust it is going to be done properly, by experts.
But also, if the worst case scenario happens and the TV falls off the wall and smashes into pieces, you can go back to the store and say, ‘You installed this, fix it!’ But your online seller may turn around and say, ‘It’s your problem because you installed it.’
So smaller businesses can build services around their products, just as the bricks and mortar do to differentiate themselves and add value.
A large online blinds retailer will sell blinds and curtains, but a local store will sell and install, and is available to make repairs. A major, online sports retailer will sell bicycles, but only a local bike store will build and service that bike. A local dress store might offer a free alteration service, etc.
Whatever industry the small business is in, it’s likely it can add value by adding services.
Make the most of Australia’s size
There was much fear when Amazon entered the Australian market, but Amazon has no store or warehouse network, just a single warehouse for all of Australia (and a second on the way). The fear came from Amazon’s perceived distribution capability, but the Australian market is so different to the US and European markets.
One of the things that local Australian retailers can utilise, which Amazon doesn’t have, is their store network. Only a few small to medium businesses are shipping from store today. If you have a few locations around Australia and you utilise your in-store stock then the speed at which you deliver that product is fantastic.
If you’ve got a store in Townsville or Cairns, being able to distribute from there to far North Queensland is faster and cheaper than distributing from a warehouse in Geelong. Of course, this requires careful management of the relationship between online and offline channels, to ensure store managers and staff still feel as if they are an important part of the process.
That’s something that Amazon is going to have to deal with. They don’t have that network of warehouses across Australia that they can draw from and they’re not shipping from local distributors.
By following these tips, business (no matter what size) can compete with the major players, including Amazon. Customers will always appreciate the service, knowledge, personalisation and targeted content that the bigger players simply cannot offer. It all adds up to value and, in the retail marketplace, value is a powerful influence.
So, if you want to take on the big guys, make sure your service is personalised; be clever and optimise your website and campaigns for less generic keywords; and be sure to promote and utilise your store network if you have one. A combination of the above will make you well placed to take on the Goliath’s of the retail world.