Retail’s Best Kept Secret
There’s a secret ingredient in the recipe for retail success. The retailers that use it are becoming the Master Chefs of the industry while the rest are falling behind, according to Chris Morley.
I have a hot tip for retailers – and it’s really quite the secret.
Some brands already know the secret, whereas others are yet to catch on; but I think it’s time to bring it to the attention of the masses so that all can benefit.
The Problem: Retail Remains in the Doldrums
The July retail figures from the Australian Bureau of Statistics were announced last week, with retail suffering a drop in sales – the figures for retail growth looked positive in June with some pundits suggesting that perhaps the sector could emerge from the doldrums. However, on the back of this result it appears not to be the case.
Lately the rhetoric from retail CEOs and spokes people – Gerry Harvey aside – appears promising. A special mention must go to Bernie Brookes, who recently outlined Myer’s plan to be leading the online game in three years.
This statement, while bold, is terrific and it’s exactly what the industry needs. The question is; how will they achieve it?
The Solution: Retail’s Secret Weapon
So, what is the secret, you ask? The secret is service.
Retailers have realised declining profits for a long time now, and that is only partially due to economic factors. For the retailers that are getting hit hardest, overlooking the subtleties of a solid service offering is the enemy Number One.
In contrast, many online retailers are growing at a rapid pace, and this has a lot to do with their constant striving to increase and improve their service offering. It began with providing multiple images on product pages, then the ability to zoom was introduced, quickly followed by video content. Now sellers are looking to improve their fulfilment and delivery capability, ensuring products are delivered to customers faster and more reliably.
Competing on Price is Not the Answer
Some retailers, both bricks-and-mortar and online, choose to compete on price, rather than differentiating their service offering. Unfortunately, this strategy has been rendered futile by international competition.
No one wins in a race to the bottom, and by pursuing it retailers do untold damage to their own brands and their future sales plans.
I have written previously about the misconception that people only shop online for price, as well as the ‘threat’ of offshore retailers. However, I will repeat myself here in pointing out that there are plenty of great local retailers that are performing admirably well by continuing to invest in service – and consumers are loving them for it.
Modern Retail Service Options
Here’s a shortlist of some of the latest features that retailers are adding to their service offerings. What is your brand capable of?
- Same-day or 3-hour delivery times
- Extended return periods
- Free delivery, free returns
- Live chat
- Optional extended warranties
These are the tools that make local online retailers successful, which is in stark contrast to many bricks-and-mortar retailers, who can only offer sales and promotions as a reason to purchase with them. While some may baulk at the idea of things like ‘free returns’ and ‘extended return periods’, there really is no down-side. Research demonstrates that returns don’t increase when return periods are increased from 30 to 60 days. Instead, conversions are effected positively.
Certain items will always be cheaper from overseas sites, but creating trust with service will prove the differentiator for local sellers. Many Australian retailers must continue to increase their service offering; invest in service and even present local partners logos, as this too will boost consumer trust in the brand.
Currently, traditional retailers could stand to learn a lot from online sellers and increase their service offering. When Bernie’s prediction comes true and the big department stores rule the online field, it will because of their advanced service capability.
As the old French proverb states, ‘The more things change, the more they stay the same’ – this is as true in retail as it is anywhere else.
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