Each month, we sit down with an industry expert to discuss a specific topic to give small businesses hints and tips that could help boost their growth.
In this edition of Business Basics, we’re talking to Clare Bailey, a retail consultant and conference speaker who regularly appears as a commentator for BBC Breakfast, Sky News, and Channel 5. She's also an entrepreneur and founder of several businesses including consultancy Retail Champion, and has two best-selling business books on retail with Kogan Page to her name – the latest of which is titled 10 Steps to Retail Success.
Here, Clare shares her knowledge of improving retail business performance in the face of fierce competition, including tips on visibility, pricing and plenty more to help give your organisation a leg-up on the rest.
In the age of online shopping, where convenience plays a large factor, how can retail businesses stand out and ensure customers are still walking through the door?
One of the most effective ways to get people in the store is to be able to offer them things like click-and-collect. They might prefer to come and see something before they commit to it, so click-and-collect allows this. But, in the same breath, I think it's absolutely essential that you’re able to find customers online, as you’re then much more likely to win their physical custom later.
The overriding thing in all of this is the need to know who your customer is. Who is it that you ideally want to focus on? You can then deliver an exceptional experience to that specific type of consumer, rather than trying to be all things to all people.
Of course, it comes down to what you’re selling and the kind of retail space you operate within. If you’re a nursery retailer, for example, you need wide aisles so that people can get a double buggy down. If you’re a gaming retailer, you might be able to keep your aisles much narrower, but you’ll need to use signage more effectively, and perhaps have an area where people can try before they buy.
Different types of lighting, flooring, picture frame fittings, materials used, music, smells – they all appeal to different age groups and genres and types of customers. Small considerations like this are important in getting customers through your doors.
How important do you think it is to maintain prices even if competitors are offering the same products at a lower price? And what can smaller retailers do to remain competitive when they are being outpriced?
It’s difficult to compete on price alone. You can create value-add services around the whole product proposition, which goes some way in justifying the premium price point. But it actually makes a lot more sense to sell things that are not comparable. It might be a silk scarf that’s hand painted and one-of-kind, but if that's the scarf your customer wants and it's not available anywhere else – price becomes irrelevant.
Retail isn’t just about price, it's about the whole experience. Things like product knowledge, a sound returns policy, extended warranties, great delivery; these all factor into the price, the value and the perception of value. That's what's more important.
What steps can smaller retailers take to stand out in ways that also minimise risk?
As long as you stay obsessively focussed on the needs and wants of your customers, there’s little need to worry about the market because it will do what it does. Get to know your customers like they're your friends and family; they are your market, and if you keep their custom, then you own that market.
The other thing I would say is don't get complacent. Take Amazon for example: it constantly looks for new ways to keep its customers happy. Amazon isn't always the cheapest, but it does things in a way that makes it so simple for the customer that you don't bother to look anywhere else.
To what extent do you agree that it's cheaper and easier to keep customers than to find new ones?
You can use the former to drive the latter. Loyal customers can be encouraged to spend more and more often. It might be that a customer comes once a month and spends £100; if you could get them to come four times every three months, you've just increased your revenue by £100. It's so much easier than finding a whole new customer.
Again, focus on customers who will spend without a second thought. Use their advocacy towards your brand to generate new, word-of-mouth customers – likely their friends and family. Loyal customers are your most invaluable sales and marketing tool, so work out how to use this to your advantage.
What actions can a retail business take to ensure there are reduced occurrences of returned goods and requests for refunds?
Working with good suppliers will ensure product quality and integrity. Making sure you go through every step of the customer journey to ensure that the quality of the experience matches what you would want for your brand is essential, but more than anything: never oversell. If you're too pushy and someone buys something because they feel guilty, chances are they're going to bring it back.
As long as you facilitate the sale, educate the customer into what it is they're buying, and make sure the customer wants to part with their cash, you’ll be fine.
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How do you think an untested, experimental approach benefits new business for retailers? And would you advise that businesses try out new things and see what works every once in a while?
When I work with small businesses, what I say is that you have to get feedback from the market. You can do all the research you want, but until you've actually put a product in front of a customer and said, “pay me £100”, you don't know if it's going to be worth that. You might think you’ll sell thousands but unless you test the water, you shouldn't have a go at mass production.
What I often say to manufacturers is, “why don’t you pick the cheap retailers and do some sales or return stuff and test it together?” That way, the manufacturer learns where the market is and the retailer learns that they can sell the products.
Businesses must continually learn and find things out, because that's the only way they can differentiate their offering from the people who stick with the same old, same old.
We’d like to thank Clare for contributing to this month’s edition of Business Basics. If you found this useful, check out some of our related SME guides below:
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