Retail business opportunities and challenges

Retail, but not as we know it...

The way we shop has changed tremendously over the last few decades and the rate of change shows no signs of slowing down. Technology, and buyer expectations and habits have affected restaurants, bookshops, hairdressers, dairies, service stations, and hotels. Today we have a number of retail business opportunities and challenges.

Think about your shopping habits just 20 years ago (if you were old enough for a credit card, that is). Say you wanted a new BBQ. First, you would set aside some time to browse a few shops, talk to the salespeople and maybe ask your friends. Then you would withdraw your cash, hand it over and wait a few days for your new BBQ to be transferred from the warehouse. You pop back in to pick it up, have another chat with the staff, then it’s bangers and burgers on the barbie for tea.

Compare that shopping experience with today. You wouldn’t even leave home before typing ”best BBQ” into Google, then, armed with all the latest product information and industry research, you would compare prices online and either click “buy” and wait for the courier or dash to the store, wave your credit card and get out as fast as you can – with your new BBQ, because heaven forbid you have to wait for it.

That’s a lot of change for one of the world’s oldest industries. Here are some of the challenges facing retailers, and how to make sure you come out on top.

 

Let's start with the challenges

Knowledge is power. These days, your customers can easily be more knowledgeable than your staff, which makes it harder to provide exceptional customer service.

Instant gratification. As consumers, we have lost the ability to wait (patiently, that is). No sooner is the latest iPhone released than we start drooling over the next one. We do the research, we know what we want and we want it now. For retailers, this can mean a lost opportunity to upsell.

Online vs. instore. There is no doubt online shopping is on the rise. Statistics New Zealand reports the volume of sales in non-store and commission-based retailing rose 8.1 percent in the June 2015 quarter, following an 8.3 percent rise in the previous quarter. For traditional bricks and mortar retailers, this should be more than just food for thought.

Increasing competition. The world is getting smaller - we are traveling more and experiencing more, which means our expectations are getting greater. Technology has made it easy to compare brands and products and find that unique item perfectly suited to our needs – or, more likely, our wants.

 

And now, the good news...

This doesn't spell the end of retail; it just means retailers have to think of new ways to attract customers and keep them loyal. Online shopping is here to stay!

Bespoke is the new black. Now that we have so much choice, what we really want – what sets one product apart from dozens of others all vying for our attention - is personalisation. For retailers, this means knowing your customers intimately.

Everyone wants to feel special. Smart retailers are tapping into the reality that in this ultra competitive environment, they have to work harder to gain their customers’ trust and loyalty - and this requires thinking outside the box. Savvy shoppers are not easily swayed by cheap discounts, so why not try something different to reward your loyal customers, like an invitation to a special instore event?

Technology is your friend. Don’t shy away from technology, because your customers are embracing it. Social media platforms are becoming more ‘shopable’, which means you can turn your online relationship into direct sales. Also on the horizon are more loyalty apps – after all, who isn’t sick of a wallet full of loyalty cards?

Customer service is still key. Don't be fooled into thinking the only aspect of customer service in your business is the human interaction between customers and your staff in your shop. In reality, your customers are critiquing your service long before they even make a purchase. Browsing your website, driving past your shop, liking your Facebook page - it's all part of your brand experience.

Customers still like to experience. Although online shopping is on the rise, experts agree that this doesn't spell the end for traditional stores. Customers still want the experience – they want to try things on, shop socially, taste new cuisines. Consider how you can better engage with your target market and offer them a unique experience beyond that of your competition – in other words, how can you take the in-store experience to a different level?

Retailing is selling to people - it's huge and it operates everywhere.

Attracting customers to buy generally relies on people coming through your door or website. This can be unpredictable at times, as you play with the selling mix of location, sales channels, marketing, advertising, layouts, etc. You rely on the customer visiting and making a purchase.

Retailing is big and exciting, and great if you enjoy working with people; it generates good cash flow and is usually more straight-forward than many of the other business models.

If you are looking to buy a retail business, check out our retail businesses for sale.

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