The Three E’s Of Competing In Today’s Ever-Changing Retail World - Lift361

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The Three E’s Of Competing In Today’s Ever-Changing Retail World

By Ed Higdon. Posted in Analytics | Insight

March 01, 2018

Retailers are in a constant battle for customer attention and dollars. This has always been true, but thanks to the rise of technology, competition has never been greater. With a few taps of a finger, shoppers have access to retailers across the country and around the world.

Thankfully, the answer to, “how can we compete,” isn’t necessarily that complicated. By focusing on these three things, retailers can compete, and even flourish, with even the biggest behemoths in the market.

One: Expectations

When a retailer makes a promise to a customer, it’s very important to follow through. One of the fastest ways to fracture a customer relationship is to fail to meet their expectations. On the other hand, when a customer’s expectations are met or exceeded, it’s unlikely that customer will look for a replacement. So if a retailer promises to create a better in-store experience, for example, each location must be ready to deliver immediately and deliver consistently.

It is also critical to meet customer expectations with communications. One of the biggest draws of Amazon in the early days were accurate product recommendations. Customers don’t mind taking suggestions about what to buy – as long as those suggestions are relevant. Therefore, customer messaging should be personalized and tailored to the tastes and habits of those target customers. Otherwise, retailers may find they’re exerting a lot of time and resources only to find their sales are diminishing.

Two: Experience

We can all explain what a bad retail experience is like. Messy displays, out of stock items, long lines, gruff cashiers, poor customer service. The list goes on. However, creating an enjoyable experience for a customer, whether online or in store, is critical to driving customer loyalty and maintaining sales.

Some retailers are able to provide a great experience for customers simply by having a Starbucks in their store. Who doesn’t like sipping a latte while shopping? For others, it can be achieved by offering unparalleled customer service or convenience. For example, people choose Amazon because they can search online for what they need, order it, and have it delivered to their door almost immediately. It doesn’t get much more convenient than that.

The key is to first understand your customer and then determine what’s most important to them.

Three: Exclusivity

Everybody wants something that’s exclusive, and creating a sense of exclusivity among a customer base is an effective means of boosting loyalty. There are a couple key ways to do this:

  1. Offer exclusive brands and/or products. Best Buy does this by offering exclusive TV models available only at their retail locations or online. Another retailer, Foot Locker, also does this by offering exclusive colors and styles of popular shoe models only available at their stores.
  2. Carry private labels. Retailers can market their own private label as a way of providing exclusive products only available by that retailer. Not to mention, private labels generally result in higher profit margins considering the retailer owns the brand. Costco does this with their private label—Kirkland. Kirkland products can only be purchased at Costco locations and online.

When customers purchase exclusive products it makes them feel special. They now have something that others don’t. Over time, this boosts customer loyalty and drives repeat business.

The Key To Delivering the Three E’s

The connection between these three factors is data. If retailers don’t know how their customers shop or what they want from them, they can’t deliver on their expectations, create a great experience or offer deals exclusive to them. Only by uncovering important insights about their shoppers can successful retailers truly connect with them to compete in today’s retail market.