Retailing is not the industry it used to be. The internet has changed the way that consumers buy goods and in turn how retailers sell to them. And the changes keep coming, such as Amazon.com’s recent release of an application enabling shoppers to instantly check prices on their own site, which means many consumers will window shop in-store, then buy online later if it is cheaper. In many cases, even if the price is the same or slightly higher they will choose to buy online as Amazon does not collect sales tax in most states. Even more troubling for brick-and-mortar stores, Amazon is offering discounts to users of the app and asking them to report the in-store prices of goods so the site can ensure it is offering the best deal to customers. What this means is increased direct competition for retailers who are already struggling.
What is a retailer to do to in order to confront this challenge? Some might try to undercut Amazon’s pricing, but with its much lower overheads that will be significantly diminished profits, or even selling some items at a loss. This of course is a losing proposition. While competing on pricing and promotions is advisable to an extent, retailers need to truly differentiate themselves from Amazon and other online retailers in order to survive.
One way to do this is the sales and service process. It is very difficult if not impossible for an online, virtual retailer to compete with face-to-face customer service. Therefore it is essential for that all staff be well trained and incentivized to provide excellent service. This is not going to be enough of course to dissuade people from window shopping then buying online later, especially in tough economic times. Other options such as loyalty programs, one-time promotions, and a focus on instant gratification rather than waiting for a package in the mail all have merit and should be utilized, but they will not solve the underlying problem or save the industry, especially as many retailers are already using these techniques.
A suggestion to differentiate your retail store from others and online retailers is to offer customized products and services. If you make your offering ‘one-of-a-kind’ or personalized to the individual consumer, they will not be able to go elsewhere to purchase the same item, and price comparisons become meaningless. And customization is not as onerous as it was in the past. With the advent of ‘mass customization’ in manufacturing, contract manufacturers can often create personalized items at the same cost as mass produced ones. If you then use a CPQ (configure, price, quote) software solution, your customers can configure their product online, by phone or in-store quickly and easily, and receive an instantaneous price quote.
Not every retailer can sell customized products of course, so the best advice in those cases is to ensure your sales process is as efficient and simple as possible for the customer. If they know they can go onto Amazon and buy a product in two or three clicks, a retail sales cycle that takes more than a minute or two when the customer is ready to purchase is not going to work. It is also essential to be consistent across channels, which is another area that a CPQ system can help as these systems are capable of updating all offerings, configurations, promotions and availability across channels including in-store, online, phone and even the channel. You can also configure a CPQ solution to offer special deals when people purchase certain products together or reach certain levels of spend.
Overall, if traditional retailers want to remain relevant, hold onto their existing market share and possibly even grow it, they need to consider new and better ways of doing things. Ensuring you are at least with – if not ahead of – the curve is essential, but even more important is maintaining and improving customer service in every way possible to provide customers an unrivalled experience and keep them coming back.