This post will explore 4 areas that small retailers should be aware of as well as act upon in some way. The Chamber is launching a seminar series around these topics, with the first being April 27th at 8:00 a.m. Please attend this free event. Invest in some “business strategy” and help us compete on a grand scale.
- The Long-Standing “Big Box” Trend.
Big Box stores and “Power Centres” are certainly not new. They’ve been positioning themselves against traditional downtown shopping for years. Their position: offer less expensive products, broad selection, and surround themselves with large parking lots to make shopping more efficient.
This means the potential ‘Big Box’ developments in Central Saanich (see recent Council vote to expand allowable square footage on Keating Cross Road, as well as the proposed 650,000 sq. foot development on Tsawout First Nation will compete with smaller retailers by offering: Lower Price, More Product Diversity, and Convenience.
Why do millions of people spend vast amounts of money every weekend for nothing else than to go watch the latest Hollywood movies in a theatre; then these same people go to Costco the next day to save $3.00 on Kleenex? The answer is simple: Movies offer an experience. Kleenex doesn’t. Experience comes at a premium.
So how do you compete with big box retailers? Offer an experience. Small retailers must offer supreme and knowledgeable customer service, specialized niche products, and an aesthetically pleasing retail environment within which to host this experience. This means your customer has made an active choice for the experience of shopping with you, rather than rushing in to save time and money. Plus, they’re way more likely to tell their friends. Yes, parking is always an issue in any downtown, but once we get people exploring the retail environments of Sidney, Brentwood Bay, Saanichton, and “Mattick’s Farm” or other market areas—let’s immerse them in our quality product: a unique, positive, and memorable experience!
One final thought is that any new big box stores on the Peninsula could be an opportunity to connect with new customers who haven’t spent much time on the Peninsula. Perhaps they will stop in to enjoy our restaurants, hospitality and specialty stores along their journey to save a couple of bucks at a large retailer.
- Consumer Behaviour: Online
Another trend that has been brewing for the last decade or so is online shopping. Pretty much every local business will face this competitor (unless you’re a Dentist!). Global giants like Amazon.com are very effective at showing your customers: a) how much products are worth, b) some customer reviews to aid their choice, and c) a real time cost and order form—including shipping.
People are getting more and more comfortable with making online purchases too. For example, Zappos.com, an online shoe store, went from $1.6 million in sales in 2000, to $1.2 billion in 2010. They offer over 1000 different shoe brands and hold the reigns as one of the most respected workplaces in North America. Online shoe sales are expected to reach $7.8 Billion in 2012. The reason this is so staggering is simply because the act of buying shoes was traditionally something that had to be done face-to-face (you needed to try them on and walk around the store). Companies like Zappos will ship you several sizes at once and let you return them for free.
For small independent businesses, services like Etsy.com enable them to market and sell specialty products globally. Check out this page from a local photographer (and Chamber staff member) Karina Landry: www.etsy.com/shop/karinaliberty. She can frame and sell her images pretty much anywhere on earth.
- Consumer Behaviour: Mobile phones.
Smartphone purchases grew by 47% worldwide from 2011 over 2010. That equates to nearly 500 million phones—in one year! Smartphones (and tablets) could be the biggest game-changing innovation of the 21st Century so far. Why? Because they alter human behaviour. They enable so many diverse activities and functions that the options are literally limitless (how many phone applications are there in Apple’s App Store?). All aspects of shopping, from price comparisons, customer reviews, and purchases can now be done while sitting on the bus ride home from work. You can even purchase goods with barcodes displayed on your phone that the cashier can scan (Starbucks does this already). Mobile phones are increasingly being used for navigation as well (use Google Maps to search for hikes or the nearest gas station—all while stopped at a red light *Editor’s Note: from the passenger seat only I hope!). The key for retailers here is to effectively reach your customers through their mobile devices without being too obtrusive.
A starting point might be to develop a mobile version of your website. There’s nothing worse than landing on a website on a Smartphone and having to navigate a site that was clearly designed for a computer web-browser. To see what your existing site looks like on a mobile phone, copy your URL into this free service: http://www.blaze.io/mobile.
- Getting Innovative to Reach Customers:
Big companies have the luxury of spending millions of dollars to develop new approaches to marketing and advertising. However, one positive thing about the information age is that you can easily observe as these big firms invest in the “trial and error” of new approaches so as to make your strategy more effective by seeing what works and what doesn’t. A good recent example of this is from McDonald’s (of what not to do!). The global restaurant chain started a contest on their Twitter profile where they asked customers to share stories about spending time at McDonald’s. The contest completely backfired: thousands of people shared horrifying stories about things like finding fingernails and hair in their food. McDonalds immediately went into reaction mode and ended the contest—but the damage was already done. A major backfire!
Companies to watch lately might include:
Target – the large retailer is investing heavily in boutique options within the big box environment. They are investing in emerging small designers, niche areas within their stores, and other ways to enhance the “cool factor” to their brand (like displaying Apple computer products). Learn more here.
Coke - a recent Forbes article tells how Coke is openly revealing their marketing strategy. A video—launched by Coke—openly discusses how they plan to utilize customer-generated stories and integrate these into their brand story through social media and other avenues. Read it here and scroll down to watch the video..
Though there are dozens of trends to watch in the world of retail. We hope these 4 areas above offer you some insights that merit your attention and possibly even your investment.
As a starting point, the Chamber is hosting a “Retail Design” workshop on Friday, April 27th from 8:00-9:00 a.m. at the Mary Winspear Centre. Learn from two well-established, proven, (and local!) retail experts. RSVP here.
Note: the Chamber is an active proponent of the Shop Local Movement. We strongly believe in supporting local whenever and whereever possible. The above examples are in no way indended to promote these companies or their business models. Rather, we offer these examples to support the case for your investment on your business, not just in it. We want to work with you to achieve great things, and we believe we’re much stronger working together than we are competing amongst each other.