From Myer’s point strategy, to Apple retail, or whomever you care to mention, the overriding imperative of any retailer is to consistently grow sales and margin line at a greater rate of return than operating overhead.
The reality check is that the boardroom doesn’t make sales (ask Billabong?) nor does a great customer driven, piece of strategy per se, or even innovative practices in isolation.
Although these are critical elements to have in place, what really drives sales is good ‘fit’ retailing. And yet it is not surprising that often the most challenging aspect is the erratic manner in which this quest for the holy grail of retail is conducted.
The following are just some samples of insights that we have gained through our studies into the Australian retail sector, customer surveys and market research that support this point over the last 12 months.
It may surprise you to know that many retailers we have spoken with, well over 50 per cent in fact, had not gained genuine customer insights about their customers wants and needs in well over 24 months.
Let me draw the obvious conclusion – how can we hope to sell to this ever changing cross channel customer if we don’t intimately understand them? Would it surprise you to know that more than 40 per cent of specialty retailers that we have surveyed do not have an active CRM/database platform?
We are at the dawn of a globally connected, yet locally driven customer who wants you to be relevant to them at a personally motivated level. Repositioning our offer to connect at this level is fundamental and mandatory.
Or breaking this point down. – more than 60 per cent of retailers surveyed did not know their top 100 customers by spend and personal details.
Lets drop this down one more level: Recently I looked at seven retailers closely, and in visiting their shops found that in 60 per cent of the visits, they where out of stock of either promotional lines or core product.
Here are also some high level looks at the instore moment of truth through our customer connection surveys over the past years.
Only 66 per cent of retailers surveyed offered an add on sale.
Only 73 per cent of retailers surveyed acknowledged customers within the necessary time frame i.e. 30/60 seconds.
Tougher times call for an even greater focus on growing sales and margin and we do see amounts of fat in some retail businesses that outwardly appear healthy.
To read more of this article, visit retaildoctor.com.au