According to recent research, retail sales have fallen over the last month even as the back-to-school shopping season gets into high gear, and industry forecasters claim that this does not bode well for the upcoming holiday season either.
So the looming question for retailers big and small continues to be how to maintain or even increase sales in such a dismal economic environment.
A month ago I posted this article that briefly examined how some restauranteurs were managing to succeed despite the weak economy. In a similar vein, although the retail industry as a whole is suffering, there are several hot pockets of consumer spending that continue to draw brisk sales. A few big discount retailers, such as Wal-mart, have been able to capitalize on these trends and are focusing on several strategies to keep these consumer dollars rolling in.
Though small retailers may be more limited in their scope then the big discount chains, by studying their strategies, there are several valuable lessons that small businesses can learn and implement. Perhaps the most important of these strategies is that retailers are paying close attention to shifts in consumer attitudes and behavior and then adapting to them.
Here is a brief look at what some of the successful retailers are specifically doing:
1. Focusing on value. Today’s consumers are tech-savvy, bargain hunters looking for the best bang- i.e. value- for their buck. Retailers are concentrating their inventory on what people still need to buy, and then providing it at a low-cost or with some other added value, such as extensive customer support.
2. Promoting a unique brand. It has become increasingly important over the past two years for retailers to differentiate themselves and/or their products and services from those of their competitors.
3. Using aggressive, low-cost marketing tactics. The role that the Internet is playing in consumer decision-making and spending has not been overlooked by retailers, and it is all the more attractive given its low cost. Successful online marketing campaigns include: sending out emails, maintaining a website, offering online coupons, and registering with online directories and Point of Interest databases.
4. Offering promotions. The goal of a successful promotion is to get customers in the door where they will either spend money on other items or services or they will remember the experience and be more likely to frequent the business later on. Some promotion ideas include hosting or promoting events, offering a themed sale, or providing free products or services.
5. Focusing on customer convenience. Retailers are paying attention to how customers are choosing to make their purchases and then building up these areas. Are customers, for example, using cash as opposed to credit or shopping online as opposed to physically showing up at a brick and mortar location?
6. Initiating cost-cutting tactics and tight inventory management. Even the most profitable retailers out there these days are paying close attention to wasteful or redundant spending and are making sure that capital is not being tied up in unnecessary inventory supplies.
7. Forming partnerships. Some stores are forming partnerships with each other, whether banding together to pool resources or reduce overhead costs or offering discounts to each other’s customers.