Jan. 6/13, 2020: Volume 35, Issue 14
By Steven Feldman
Welcome to 2020. The start of a new decade shines a spotlight on the opportunities and hurdles that lay ahead not only for floor covering retailers, but the retail industry in general. In a new report, research company GlobalData identified the key challenges retailers must address to maintain success in 2020 and beyond. Topics like e-commerce, saturation and direct-to-consumer business models are coming to a head. There are plenty more.
The truth is the amount of power wielded by consumers has never been higher than it is today. They are no longer forced to choose between just a few options when looking to purchase higher-end items like flooring. Today, they have dozens of avenues where they can shop.
As well, the information available to consumers has expanded exponentially in recent years. This means savvy shoppers tend to spend a lot of time researching their purchases—and consider the entire customer experience while doing so—before committing.
Here are seven issues retailers are facing as we enter the new decade:
- Multichannel buying experiences. Here’s a stat for you: 96% of Americans utilize online shopping in one way or another. However, those same Americans spend about 65% of their total shopping budget in traditional brick-and-mortar locations. In other words, while almost everyone is shopping online, they are making more purchases in-store. However, the explosion in mobile retail means in-store research and showrooming—the practice of viewing a product in-store only to make the purchase online—are now more common than ever. The solution here is to focus on creating a second-to-none customer experience across all channels.
- Seamless experiences. When transitioning between online and in-store experiences, customers not only want the same products to be available, they also want their experience to be seamless. Loyalty programs can help by collecting relevant information and putting it to use. A retailer can use its loyalty program to not only reward customers but also deliver relevant content and integrate data across all interaction points—including online interactions and in-store sales—creating an integrated, omnichannel customer experience.
- Retail price inflation. Year after year, customers are paying more for basic goods, which means they’re less likely to spend as much money on other products like flooring. Simultaneously, retail prices are likely to rise because retailers need to bear with higher costs.There are three steps to overcoming this issue: 1. Make sure potential customers consider the products you’re selling to represent good value for money; 2. Optimize your operations and cost control (here’s where technology comes in handy); and 3. Periodically make sure your current suppliers are still the best fit.
- Customization. Customers are progressively less interested in “one-size-fits-all” services or products. Customization is a trend that is growing. Getting to know customers from their previous purchases and interests can help retailers drive loyalty. Retailers must develop personalized proposals and make sure they’re generating quality interactions with customers. For example, have you ever thought about sending personalized emails about special offers relating to each customer’s preferences? For larger numbers of customers, this can be achieved using a CRM system. This is a surefire way to boost customer retention.
- Sustainability. More and more people, especially younger generations, are becoming aware of environmental, social and ethical issues, and this reflects on their choice of retailers. People are making decisions not just based on which products to buy, but also on the practices of the businesses they’re buying them from. One easy and impactful way to become more sustainable is to replace paper with a software solution to send invoices and receipts by email. Don’t forget to be transparent and authentic in your communication to make sure potential customers know about your efforts to be sustainable.
- Employee retention. Retaining retail employees is a constant challenge. In fact, the retail industry has one of the highest employee turnover rates. There are many reasons including unstimulating routines, lack of incentives for employees and insufficient training. Assuming you’re hiring the right people for the job, increasing employee engagement is obviously the best way to keep your staff from moving on, and it’s easy to achieve with initiatives like employee discounts, team events, setting individual sales goals for each employee, having one-on-one meetings with employees, etc.
- Balance between human resources and technology. Investing in technology is imperative for retailers but these systems aren’t meant to replace employees. Not only are humans needed to operate and/or supervise these systems, but human interaction is important to connect with customers and to create loyalty. Finding a good balance between technology and human resources is something retailers will have to manage in the coming years.