Just read an interesting article on a discussion board (sorry, don’t have the source link) about the new wave in retailing.
Interesting because it talks about how big-box stores are downsizing to meet the needs of the new shoppers.
Interesting because it talks about how today’s shoppers (now being called Generation C for their connected, communicative, computer-savvy, community-minded outlook) shops differently than any previous generation.
Interesting because it quotes heavily an inventory management software company that uses a lot of 50-cent words like…
The bottom line of the article is that today’s customer is using her phone, her computer and the Internet to do more research than ever before making purchases. She knows the products, the features, and the general price range.
She will only buy from you if you have the Right product in the Right price range and give her the Right kind of service.
Yeah, not really a new concept to retail. The only difference is that it is easier for customers to know what are the right products and right price range for them. So you have to be as savvy as them.
You have to be following trends in your area closer than before to make sure you have the right products. You have to be paying attention to price far more than you used to (although the Internet makes that easier for you, just as it is easier for her.) You have to be giving far better service than what is found in a typical retailer (and you cannot have an off day.)
The big box stores are in trouble because even with all their computers they cannot accomplish the first thing on that list because they cannot react fast enough when things change. And they never had a chance at Right kind of service. Yet all their focus has been on getting the Right price. They are downsizing because their sales are downsizing. Look at their same-store sales. Down for Wal-Mart, Target, K-Mart, Sears, and Toys R Us.
For the specialty stores, our biggest issue is having the right products, followed by having the right prices. We have to be careful we do not drive ourselves out of the market by dropping a line as soon as it gets discounted somewhere and thereby not having the right goods. Then we have to look at pricing and what we can afford. We don’t have to match but we have to be in the range. The one thing we do have Right is the customer service (most of the time:-).
The reason the Internet is having such a huge influence on retail sales lately is because it is accomplishing the first two Rights (product and price) and getting better on the third (service).
Retail hasn’t really changed. Customers haven’t really changed. If you have the right products to meet their needs at a fair price and you take really good care of them, you’ll have plenty of customers coming through your doors. Same as it has always been.
PS Sure, you have to work hard to do all those things. But retail has always been that way. Ancient Chinese Proverb says, “To open a shop is easy, to keep it open an art.” Roy H. Williams said, “If making a profit were easy, everyone would be doing it.”
PPS Before you spend a penny on a software program full of 50-cent words, check out what I have to say for FREE.
Spot on as usual Phil. I think the danger for independents is believing everything has fundamentally changed to "price" and been afraid of pricing their goods to be profitable. It's a business you're running, not a hobby. Bob Phibbs, the Retail Doctor
Bob, I always go back to an NRF survey done in the economic meltdown of 2008 that showed that 42% of respondents said "sale" would drive their purchases, 11% said everyday low prices. The media read that to mean that price drives traffic. What I saw was that 47% of the shoppers in a failing economy said it was something other than price that drove their purchasing. 47% is big number of people.