Wow, out of all my articles, I find this title the most depressing. If you’ve never read my stuff before, typically I am very uplifting. This time, though, it is as important as possible for me to be as blunt and brutal as I can be, otherwise, I am doing a disservice to all of you retailers out there. Many of you may be hearing this term for the first time, so I will begin by answering the question of what is the Retail Armageddon? If one were so inclined, they could Google the term and be floored by sadness. Instead, I‘ve done it for you.
The Retail Armageddon, or Retail Apocalypse, is the term used by analysts to describe the sweeping Box Store closings, bankruptcies, downsizings, and mass layoffs of companies like PAYLESS, Macey’s, and Kohls. What many analysts don’t realize
is that there are very proactive steps you can take to stay relevant during these very trying times. In this article, the first of four, I will help you understand “Why are your customers even shopping online?” Many of you may think price and you couldn’t be farther from the truth.
Top 5 Reasons People Shop at Stores vs. Online
According to IHL, a global research and advisory firm for the retail and hospitality industries, The top 5 reasons people shop at stores vs. online are:
Step 1: Having Accurate Inventory Visible Online
The very first time I used Amazon is not very different from a lot of my friends, family, and clients. It went something like this: I finally had time to go to the store and get an item I’d been needing. I googled it and found that it was sold at a store about 15 miles away (according to GPS that’s about a 30-minute trip). I got in my car, drove through traffic, got to the store, only to find that they were out of it, and wouldn’t have more in for another week. While there I “Googled” it, again. In doing so I found out that Amazon could have it to my door in 48 hours. I pressed a button and drove home. Has this ever happened to you, or one of your customers? In a recent study “Amazon Prime members are 71% more likely to purchase an item online that they initially planned to purchase in a store if they experience an out of stock.” This statistic speaks volumes on how important it is to keep an accurate inventory, but also how important it is to make that inventory visible online. I recognize how hard this is, in the shoe industry but that’s why it’s even more important for you to do. Next week I will go into more detail on this one and maybe we can help you here.
Step 2: Training Your Staff to Better Educate Your Customers
Twenty percent of the people that shop at your store vs online do so because they want to touch, (try on) and feel an item or would like to get expertise from one of your staff before buying. Since that is the case, it is critical that you always have trained staff on the floor. Before you say it, I completely understand how you feel. With wages increasing, and what feels like a dwindling pool of qualified labor, how are you supposed to be able to accomplish this? The answer is easy; technology. Have you ever been to a store where the employees have iPads? The ability for an employee to look up items, substitute-items, item locations, customer history, and even their customer profiles could literally be at your employees’ fingertips.
Step 3: Create a Quick and Insightful Shopping Experience
Twenty-three percent of the people that shop in stores vs online need it now, while 11% do so for convenience. So why not make their shopping experience quick and easy? Make sure your store is set up for success by creating an easy-to-follow flow for your customers. This can include the layout of the store, easy to read signs that tell people where to go for what, quick checkout lanes or even self-checkout, informational kiosks or a concierge at the front of the store, and finally, Buy Online Pick Up in Store (BOPIS.) If you do not plan to implement at least one of these, then you will fail to reach an ever-growing market of Amazon Prime Members.
Don’t Ignore the 700 Billion Dollar Elephant
Amazon is growing more every day. They continue to add more products and incorporate new revenue streams. At one point, fewer than 10% of households had an Amazon Prime Membership. Now more than 55% of Americans have at least one Amazon Prime Member in their home. Tony Robbins once said, “Change is inevitable. Progress is optional.” You, as a business owner, have the opportunity to embrace progress and stay viable in today’s economic landscape, or fight change and fade away into retail obscurity. The reasons they were able to force many retailers to cut their prices will be the same reasons you are able to out survive them during the Retail Apocalypse. Your size will become your strength. You can be more agile and have the ability to adopt new technologies faster.
If you would like to learn more about ways you can increase your revenue, decrease your costs, or create a better customer experience. Click here now.
Mark Nelms is a Business Development Manager for Soft Intelligence. He has conducted over 400 interviews with retailers from almost every vertical and size. In prior roles, he’s assisted clients like Cumberland Packaging Corporation (Sweet N’ Low), The New England Patriots, and NCR (National Cash Register.)