For Customer’s Sake – Do Something
In the past two decades, retail has made more shifts than it did in the previous two centuries. With the global financial crisis and the internet in early 2000s, it created the perfect storm where customers made changes in their buying selection criteria, and businesses weren’t prepared for it, and most didn’t even see it coming.
Even as the shift happened, leading retailers were ignoring the facts right in front of them – the quieter sales periods, the lower transactions, the average spend per customer reducing, the less than usual foot falls and most importantly, the store tills weren’t ringing that much.
Having worked for some leading global businesses across different industries, and from my own personal research, reading and observation – I can safely surmise that almost 90% of businesses out there today, from traditional backgrounds (set up before 1990) have no idea of what they are doing today – who their customer is? what he / she is really buying from them? how best to service them? how to keep them loyal and engaged?
Today, the only answer seems to be give them something so they buy NOW – a bigger discount, a better payment plan, a reduced interest rate, a privileged membership package and so on. This has been made even easier, or confusing, depending on who you speak to with the advent of new technology and social media with tracking, tagging, cookies and codes.
Whilst they do work, specific to a strategy for lead-generation and customer-relationship-management sitting within the wider sales and marketing plans, it is not a solution. These are tools to help you connect, engage and possibly, persuade the customer to open their purse strings.
But is this truly what the customer wants?
And is this any different from the traditional media exposure of the 1970s, 80s and 90s? When celebrity endorsements, glossy magazines, big billboards, crazy radio voice overs and cheesy music videos would ooh and aah the audience.
In addition to these, we have added video blogging, product placement, celebrity-owned products marketing, and even worse, opinion based journalism – PR where the real value of the product or service is irrelevant. What used to be content or features advertising has now become articles.
Please go to the shopping malls and see if you can pick any genuine retailer out there, who has made a product from scratch or offering anything unique to the public. If you walk all over Sydney or Melbourne or pick the city you’re from, you’ll be hard pressed to find more than ten such stores or businesses.
Why? Well, for starters, the rent and costs of owning stores have risen so much, that the only stores open are those backed by stock exchange, as in listed in IPOs where the fluctuations of the share prices can allow them to be in business. And even then, all of them are always 20 to 50% off.
Again, going back to what I said earlier – these retailers have realised that the only way people will come in, is by offering big sale or offers on the windows, and then they may walk in and buy something and that will pay them enough to keep the doors open. In many cases, these stores are selling inferior goods at inflated prices with discounts, so you may think I’m bagging a bargain but it’s nothing more than a box of magic tricks, an illusion of true value.
If you see all of the major tech corporations selling electronics and equipment – they have not yet learnt to transition from their traditional past to the modern digital age. Many of them have waited too long to wet their toes and the boats sailed away. Others are using their huge cash reserves and monopoly position to hold onto the market in some shape or form, but in reality, the next shift will hit them like a big wave and that’s going to be the end of that.
I’ve written posts on the shifts in retail before, and possibly will publish another one in the future, but that’s possibly going off-topic to this discussion.
What is the answer to all of the retailing woes and problems? Is it self-inflicted? Can it be managed or is it too late to even bother?
The timing may be off a bit, but it’s never too late to bother. Why? For the sake of the customers who put their trust in your brand and product and service. And for the sake of the employees and other stakeholders who have invested more than just their time and energy to help you survive in an ever-changing business landscape.
And most importantly, NOT FOR more profits, higher shareholder payouts and fat paychecks to senior board members. If that’s what you’re aiming for, you’ve got it all wrong. Customers today are smarter, sophisticated and sensible shoppers and will quickly realise they’re being duped and move on to something that they see connects closely with their own personal values of integrity, community and trust.
The answer to all of this is the same as it was 200 years ago – putting the customer first.
Sadly, many retailers today are stuck between paying high business rent and wages, and trying to compete in the downward spiral of discounting, which is leaving them strongly cash strapped, out of pocket and nearly single digit margins, if lucky.
I’ve spoken to leading dealers and on-sellers of a global office equipment business, and they all complained that given the cost of self-sustained lead generation and staff wages, and the squeeze from the buyers on the selling prices of these items, they hardly can manage enough to keep the doors open. But they don’t have a choice, of just wrapping up their territory which took them many years to build. And they get little to no support from the parent company, which is only increasing targets and reducing commission payouts.
Isn’t this the same for many franchise operators we hear of in the news today? Who are engaging in illegal activities encouraged by their circumstances to keep themselves afloat, or just to make a bit more on the side, known or unknown to the master franchise operations.
This business of retail should not be about GREED, but about PROFIT.
The customer understands that you (as a shop owner, manufacturer and supplier) have to make some margin to keep the business going, and offering quality products at top value.
But, many retailers, have turned this into cost cutting, false advertising, manipulated pricing and gimmick-marketing – the gig will not last forever. You can fool the customers once or twice, but then it will be over. And the word spreads fast, thanks to social media and the Internet, Whats-app and so on. This short-sighted dash for cash is not good for anyone, especially not for the community and the wider economy.
The few good things that have come out in the past two decades, which I would like to list as suggestions to consider, if you’re a business looking to grow with the right intentions and seeing the long-term prospects of retailing.
Customer-Centric Strategy in Sales, Marketing and Operations.
Personalised Products & Services that truly benefit the Customer.
Use of Digital Tools to extract Relevant Data.
Speaking to Customer – facing Staff to identify Real Issues.
Invest in Product, Service and Staff Development.
Create Sustainable solutions that benefit the Community
Add-Value rather than Discount-First option.
Build Customer Engagement Focus Groups to get true information directly from the Source.
Build a Culture of Learning driven by Excellence and Collaboration, not Competition.
Stay Authentic, and work hard on being true to your Values.
In conclusion, I would like to point out that this article is a honest representation built upon observation, experience and research. It is not aimed to single out any specific industry or business, and should be viewed with a wider realistic lens. These suggestions are not a simple fix, and will require genuine effort and investment, sometimes to the detriment of short-term profits and ROI. Growth takes time, and it’s up to each business owner to balance their vision to the reality facing us all, and aim to be better or the same based on the choices they choose to make. The consequences will be theirs to bear too.