While spending on books, cafes and restaurants increased, overall retail sales results were brought down by a major decline in clothing and department store sales.
Interestingly, dining, even in the form of fast food, is about the experience, socialisation, connection, whilst books are about an experience beyond one’s life. All raising the question, is this what customers’ hearts are crying out for?
Some experts cite online shopping as the reason for this decline, yet you can buy books online and home delivery is an app touch away, so it’s not like these categories are exempt from the choice between online and bricks-and-mortar.
Could it be that customers don’t buy just based on convenience (we are all busy), but is convenience the biggest factor? What excuses do we use for other areas where sales are also in decline?
I am sick and tired of hearing about the online vs bricks-and-mortar debate in terms of an either/or view of retail. To me, it’s ALL retail, and it’s about being RELEVANT and delivering VALUE to customers. If customers are going to venture off their couches into our centres, surely this is because they are after something more than convenience.
Analysis provided by Kepler Analytics last year showed that while there has been a sustained drop in foot traffic into shopping centres, there are fewer “browsers” and more “shoppers” with a propensity to purchase.
Their data showed greater conversion of store traffic, and an increase in ATV, which demonstrates that some retailers are beginning to understand the need to provide real service.
With consumer spending lagging, the solution does not lie with government cuts to tax and interest rates. Neither will cause the stimulation to consumer spending that will overcome this continuing trend.
Instead, we are going to have to find differing, out-of-the-box solutions, if bricks-and-mortar retailers are not only going to survive but thrive in the modern world.
Jessica Irvine wrote in the Sydney Morning Herald recently that sluggish retail results were because of a “more deliberate and conscious style of consumerism” with influencers like Marie Kondo impacting this trend.
Kondo talks about the items in our homes in terms of whether or not they bring us joy. When they do not, we pass them on or “repurpose” them.
Are there lessons that we as retailers can learn from the Marie Kondos of this world to help those of us whose businesses and livelihoods rely on consumer spending?
Are we listening to what our customers are trying to tell us about deliberate customer spending that fosters joy for them, for us and for the communities within which we operate?
I say it is time we opened our ears. Here are some ideas of ways to create a new consumer experience:
Connect our customers to those in need
With increased consciousness around the environment, customers want to be able to “repurpose” branded clothes by coming into stores gifting or recycling their pre-worn items to those who need them.
Clothing retailers could facilitate this and provide styling expertise for the beneficiaries, sharing the positive results with the original owners by sharing pictures of the people who have given old items new life. Creating connection, less waste, greater value, joy and customer loyalty.
Take a look at IKEA’s approach to providing gift vouchers on items returned by customers that they can resell. Absolute perfection and connection.
Use storytelling to convey the broader impact of the brand
Retailers that hope customers will read about the social good they’re doing on their website or in pamphlets are missing the opportunity to connect with customers in-store by not training staff to share these stories when interacting with shoppers.
Staff who can share the company’s stories of community impact, helping others, reducing their environmental footprints, uplifting women and educating communities will garner deeper connection with customers who are looking to be aligned with companies whose values reflect their own.
Convey the value of one purchase many uses
People don’t stop needing things just because they decide to spend less, and it does not mean that they want the cheapest deal so they can buy more.
Customers today are becoming more discerning about where, how and why they spend, as it can help to make them feel joyous about their decision to spend with you.
Demonstrating how an item you sell can enable them to do more with what they already have, or how it can be used in differing ways for a number of occasions, is an example of taking the customer’s experience to new levels.
When spending is down, we need to deliver more value to convert what is available and look to make conscious, deliberate consumerism joyous for our customers. It’s the perfect resolution for every retailer this New Year!
Ingrid Maynard is founder of The Sales Doctor.