Financial consultant Brett Stevenson kicks off part two of a series on how small
retailers can learn from the triumphs and failures of their larger counterparts. Click here for part one.
4. Go deeper not wider.
Of course this can depend upon your business model but the observable trend seems to be that by narrowing the product choices you not only make it easier for the customer but also free up space, staff and cash. If you have products where you compete vigorously consider getting rid of them to focus on the more profitable areas. Peruse some of the better online traders to see how well they do this because of the short time frame to captivate the customer. Does this relate to you?
5. Develop a multi-channel approach.
To ignore the opportunity that online offers is a risky approach. Marrying bricks and mortar with online seems to be the trend, and it makes sense. Harvey Norman and JB Hi-Fi with all their strengths would be possible negative models for us in this regard. Online trading would be one of the key influences driving international price harmonization, so it is best to see it as an opportunity to improve customer service and reach rather than as threat. Billabong’s online sales may only be 3% of total sales, but with them growing at 50% this year, it sends a very salient message.
6. Proactively engage with your customers.
We need to be mindful of Peter Druckers dictum that ‘no customer, no business’. The larger corporates are utilizing CRM (customer relationship management) software tools, as well as loyalty programs (Myer One loyalty program has 4 million members), to collect and mine sales and transactional data to improve their customer engagement. They clearly see the long term value in being able to match their products with the customer. The tools available to do this are much more easily accessible for smaller operators whether via POS or database systems, and when combined with the more personal customer engagement, it provides you with a unique advantage. Do you clearly identify your customers with your systems (especially at the transaction point) and proactively engage with them to keep their business?
7. Don’t be intimidated.
The larger players may have the size advantage but they also have higher fixed costs, and can be unwieldy and slow to change. Whereas being smaller you can be nimble and move quickly. They can be providers of great information for your business, which would be very costly for you to obtain. Here are some suggested actions:
Try to implement some of these lessons to make sure you don’t miss out on the consumers’ dollar spent in the ragtrade.
- Monitor their marketing strategies, their advertisements, their merchandising, their window displays. They invest a lot of money in these areas. Don’t let it go to waste.
- Read their annual reports and publications if they are public companies. They may provide insights into future strategies and trends.
- Listen to what their CEO’s are saying in the press – e.g. Bernie Brookes (Myer), Paul Zahra (David Jones), Derek O’Neill (Billabong) etc. There is much to be learned from their expertise.
Try to implement some of these lessons to make sure you don’t miss out on the consumers’ dollar spent in the ragtrade.