What’s looming ahead for the retail industry in 2024? In this exclusive op-ed for Ragtrader, Pitcher Partners Melbourne partner Melanie Dawes shares their winning strategies for retailers post-Christmas.
It’s been a challenging year across the retail sector.
To the end of November, more than 270 retail businesses had called in the administrators, already eclipsing the 248 that fell in the entire six months to December 2022.
While the Black Friday-Cyber Monday weekend in November was projected to deliver more than $6 billion into retailer coffers for the second year running, the Australian Retailers Association (ARA) is expecting a more subdued December trade.
It’s difficult to predict when economic conditions will improve, but there are three key actions that business leaders can deploy to give themselves the best chance of success.
In 2024, it’s vital to look after your people, create a seamless physical and digital shopfront and take a fresh look at what drives loyalty.
Create or refine your EVP
Pitcher Partners’ September Business Radar report, surveying mid-market firms, revealed 25% of respondents felt high-quality talent was a driver of their success, while for 32% attracting talent is a major barrier.
Retail business owners need an Employee Value Proposition (EVP) as a matter of urgency.
Retail is still about people. AI, robotics and automation might make doing business easier, but people make the difference through the value they add and the relationships they build.
Corporate purpose is more important to your people than ever because they want to do work that delivers value and to feel that their contribution matters.
Understanding your people’s career priorities and what made them want to join your business in the first place are two key elements in creating an EVP. If their experience has changed since joining the company, it could uncover opportunities to retain top performing talent.
Ensure the EVP is internally and externally marketed, so your team can support and promote what they have collaborated on.
An EVP brings a more engaged workforce and an increase in staff retention, reducing spending on recruitment and training, and improving the bottom line.
If you already have an EVP, revisit it to ensure it still resonates with your workforce. Continually gathering feedback ensures you understand changing priorities and aspirations, and want to support their long-term career goals.
Bricks and pixels – blending digital and physical shopfronts
How well do your shopfronts talk to each other? Does one physical store know what’s happening in another, or how customers crossover into online?
Retailers should be leveraging their digital presence to drive sales in physical stores and leveraging in-store customers to drive digital transactions in a seamless experience.
An investment in technology that sustains convergent commerce, or omnichannels, supports consumers in terms of where, when and how they wish to shop.
The UK retailer Primark understands this relationship well. They have a high volume, low margin business that does not support delivery services, so they instead rely on a click-and-collect model.
That drives footfall into stores so customers can keep browsing but it also helps them build better consumer profiles with a seamless blend of the digital and physical environments. Social media and livestreams also become touch points on that consumer path to purchase.
Mobile apps are undergoing a resurgence among retailers – while a mobile-enabled website has a broader reach, an app allows more interaction and a personalised experience.
Surprise and delight your customers – loyalty will follow
More media channels, more competitive brands and more ways to buy. How do you build customer loyalty in such a hectic environment?
Hero products are undoubtedly valuable but be wary that markets change quickly.
Inevitably, someone else comes along and does your hero product a little differently or delivers a better experience to create the next trend – and there are countless examples of brands who discovered just how difficult it is to bring customers back.
Retailers that use different modes of consumption can better promote brand loyalty by aligning with customers' values or offering a quality standard.
Brands should identify multiple market segments and continuously evolve – this might be delivering new products, innovating with unforgettable experiences, and developing personal connections with customers on what matters to them, such as sustainability or giving back to the community.
You need top quality customer data to segment your customers, understand their preferences and pain points, and provide the right offerings and experiences.
A big part of this is understanding what technology is available in the marketplace, how it can optimise your business systems and processes, and therefore free up your workforce to provide better customer experience online and in-store.
As Australians grapple with the rising cost of living, they are more discerning about when and how they spend, and retailers will genuinely earn every dollar in turnover.
A personal connection that instils trust will build a resilient retail community capable of handling whatever the next 12 months brings.