You wouldn’t know it by the headlines or by wandering into a dusty flea market that used to be a Zellers or Sears store, but retail is on a roll.
According to Statistics Canada, retail sales in the first 11 months of 2017 were up seven per cent over the previous year. In the U.S., the gain was 5.5 per cent.
But, of course, the devil is in the details. (Remember your first boss telling you “Retail is detail”?) In Canada, online retail grew 36 per cent in the first 11 months of 2017. But e-commerce accounted for just 2.6 per cent of all retail sales last year, which says old-school businesses still have time to get it right.
Each January, the National Federation of Retailers holds a colossal three-day convention in New York City. I attended “Retail’s Big Show” this year to learn how entrepreneurs can keep pace in a market changing so fast. On my way into the Jacob Javits Convention Center, I heard the fundamental challenge laid out starkly when one delegate told another, “I do all my shopping online, too!”
Here are seven key insights from the Big Show that should register with any entrepreneur trying to sell anything to anybody.
It’s all about relationships. Online or off, customers aren’t your target, they’re your community. Look for ways to deepen your relationships, even if it means giving before getting.
Marti Eulberg, director of brand management with Charlotte, N.C.-based Sonic Automotive, fifth-largest automobile retailer in the U.S., put it best: “We want to get away from being transactional and build a relationship.” Today, its 110 dealerships offer guests free wi-fi. And customers get an RFID chip in their car that entitles them to a free car wash whenever they return to the lot. “Everyone loves it,” says Eulberg. “It brings them back again and again.”
Put your best foot forward online. According to Dwight Moore, senior director of retail solutions for Salesforce Industries, “85 per cent of shopping journeys start digitally. Shoppers are coming into your store with greater knowledge and greater intent.” This is a terrific challenge to have. It gives you the chance to differentiate your business through creativity, service, staff training and customer insight. “Stores,” Moore says, “are becoming experience centres and fulfilment centres” for consumers who know what they want.
Mobile matters most. As you develop your online strategy, the big play is mobile – especially apps. According to a keynote by Jennifer Bailey, vice-president of Internet Services at Apple Pay, “Mobile is now growing four times faster than desktop commerce, and 10 times faster than general retail.” Plus, she says, “80 per cent of the time spent on mobile devices is spent within apps.”
Bailey cited several examples of major retailers winning with creative apps. Home-products retailer Wayfair uses augmented reality to let prospects see how a product will look in their homes. Another Wayfair app lets you find out if they offer what you want by uploading a photo of the type of item you’re looking for.
Don’t groan at the costof differentiating your brand – marvel at the new opportunities awaiting you in adjacent services. Blaine Hurst, CEO of St. Louis, Mo.-based Panera Bread Co., says his company’s “Panera 2.0” project has helped boost digital sales to US$1.25 billion, or nearly 30 per cent of total revenue. By updating its catering business with an app that includes loyalty rewards and a “Rapid Pickup” service, Hurst says Panera has become “the largest caterer in the United States, with sales of more than US$500 million.”
Moreover, “75 per cent of digital orders now come on apps,” Hurst adds. “The amount of data we can mine from that is huge!”