ecid=NL1001">worldwide retail sales are expected to hit US$23.35 trillion in 2020, down 5.7 per cent from 2019, and nearly 12 per cent below pre-pandemic estimates of US$26.45 trillion.
From what we’ve seen recently in Victoria, and more specifically Melbourne, we can expect false starts to the ever promised ‘re-opening’, which not only makes it hard to run your business, but impacts negatively on the consumer spending outlook for longer. Cautious customers are rarely enthusiastic spenders.
From what we’ve seen so far, unless you are selling food or booze for consumption at home, you’re in for an even tougher financial year than last year. For many retailers, welcome to the road to Armageddon.
If 2019 was the year of bare-knuckle hand-to-hand combat, in 2020, it’s time to get down and dirty. So what can be done to minimise the damage so you at least stay in the ring?
There are a few weapons retailers can add to their arsenal to help come out the other side in one piece. One is an increased focus on personalised communications.
To do this right, you’ll need a number of pieces of the puzzle in place. Firstly, get your data sorted. Banish any data silos and get your house in order.
Next, you’ll need a team of people that live and breathe collaboration. There’s no point having your marketing people make a commitment to improving the customer experience through more personalised communications if your web team is off on another tangent, or your fulfilment folks are dropping the ball.
You need everyone to grasp not only the part they must play but also what the others are doing. Sounds expensive but the reality is, it’s actually going to save you money in the long run.
Now, more than ever, it’s time to nurture one-to-one customer relationships. You can do that by looking after your best customers, re-invigorating lapsed customers and ‘look a-like’ prospects. Reach out to the people who have spent money with you before, then make it personal. You could start by offering them something based on their previous purchase behaviour.
To determine the people to target, run RFM analysis which stands for Recency, Frequency and Monetary. You’ll quickly identify which customers are your best by examining how recently a customer has purchased, how often they purchase, and how much they spend.
You may have read that automation is also going to be your friend but as you look to up your personalisation game, you need to be selective about what you automate or it will likely have the opposite effect. Do an audit of your business functions and look for ways to free up valuable resources so you can focus your people on more pressing tasks. For starters, replenishment emails are an easy candidate for automation.
Now is the time to get ruthless about the business must-haves based on performance. Forget about the nice-to-haves, this isn’t the time. Unless you can see an activity delivering a positive effect on sales or your bottom line, chuck it. Working with partners that have a 360-degree view of your business will certainly help.
And if all else fails, go on holidays. In the stockbroking world they often say, “sell in May and go away”. Of course, if you’re in Melbourne like us, you’re not going anywhere so you may as well get to work.
Craig Flanders is the CEO of full-service agency Spinach.
