Tuesday, March 13, 2012

Bricks AND clicks?

In 1744, Benjamin Franklin sent out the very first catalogue in the United States selling scientific and academic books.  Next came Hammacher Schlemmer  In 1848, and then the true pioneer of modern day direct to consumer cataloging, Montgomery Ward in 1872.  Why is this important?  Multi-channel retailing has been in existence for a very long time however, the advent of the internet has made the scope and reach of “omni” retailing more prevalent.  So the question is, why has the internet got everybody so scared?

Believe it or not, brick and mortar retailers have co-existed with these other types of retailers for longer then we typically consider.  In an era dominated by online shopping, mobile technology, tv shopping, catalogues, and other types of media shopping events, it’s easy to feel as though the brick and mortar retailer is being targeted for extinction.  I however, don’t think that will ever happen simply for the reason that people like to shop, immediate gratification is king, and nothing replaces the sense of touch.  Here are some tips for playing to the strengths of your brick and mortar store.

  1. Diversify.
Diversity can be in the form of products, store fixtures and layout, or the way you create a customer experience.  Change things up every once in a while as far as product lines go but also in way of promotions, events, and store partners.  Events drive a lot of business for most retailers and help create the certain “experience” that your customer craves when visiting a boutique (afterall, that is one of the main reasons they shop with you and not at Macy’s, right?).  Partner with local charities, have a new season kick off tea with your top 10% customers, how about a wardrobe consultation from an expert, give a seminar on the best trends you found from fashion week.  Do things a little differently the way only a brick and mortar store can.

  1. Customer loyalty
Customer loyalty and experience go hand in hand.  If you don’t have a loyalty program, try outsourcing.  There are some great technology companies starting to blaze this trail for you.  Belly is a great Chicago startup doing some amazing things with customer loyalty programs.  Additionally, spend some time researching some innovative retailers and their customer loyalty programs such as Lululemon’s ambassador program They seek out their “influencer” customers and empower and incentivize to influence their friends, customers, and family about the Lululemon lifestyle.

  1. Inventory management and vendor relationships
“Whatever priorities retailers set, their physical stores are likely to shrink as the share of sales made online keeps rising. Retailers in America have a surfeit of space. Between 1999 and 2009 the amount of shopping space per person boomed from 18 square feet to 23 square feet. The productivity of that commercial acreage slumped after the financial crisis and shows no sign of recovering.” Taken from TheEconomist

As offered in the quote above, an increase of 5 square feet per person in 10 years is astronomical.  This increase in spending has been self regulated and accelerated through the economic downturn.  The shrink in spending really leads one to think that every inch of space in a boutique counts and how that space is utilized will determine the outcome of the retailer.  Is square foot analysis a metric you look at monthly?  Maybe it should be if it isn’t.

Supply and demand is an economic law that is not easily understood and most likely, this is the most challenging part of your business.  Keeping the right amount of inventory in stock as it relates to your customers is extremely hard to predict especially as projections must be made up to a year in advance.  In order for the relationship to work for both the retailer and their supplier, both parties must try to understand the difficulties of the other party.  Working with your vendors is a must in this economy as having the right inventory in stock at all times is key in this very digital age.  Mobile technology companies are starting to spring up and go after unsatisfied brick and mortar customers who would like to make a purchase but either a. the item is missing from the store’s shelf in the size or color they need or b. they will help the customer find the lowest price either online or around the corner.  At The Stock Flock, we attempt to give the power back to the retailer while helping them to use the internet to their advantage.  By placing available inventory online from existing vendors, The Stock Flock allows the store to complete a purchase regardless of whether or not the item is hanging on the floor. 

Here at The Stock Flock, we encourage all retailers to embrace technology and use the benefits that come with a brick and mortar store to your advantage.  Check us out and if you like what we do, feel free to send us your contacts at your vendors and we’ll do the talking for you!

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