Is online retail the only way forward?
In a previous post we looked at 3 Steps to Creating a Better Customer Experience, where we introduced the concept of the “Retail Spectrum”. This represents the integration of online retail and traditional brick-and-mortar shopping experiences, and where any mixed-method retailer can sit. There is no ‘right or wrong’ position, but looking at this simple tool can help you find a balance and quickly give you some direction for your sales, growth, and marketing strategy.
So, you’re probably wondering; “How does this apply to my business?” or, more importantly; “How is this going to help me make more money?”. Interestingly enough, The Warehouse are a good example of a business who understand the Retail Spectrum and how this applies to the ongoing success of their business. They’ve recently introduced a implemented strategies which appeals both ends of the spectrum. Being aware of where they sat and comparing it to where they would like to position themselves, has seen them launch their first ever ‘Click & Collect’ initiative.
There’s three key steps in understanding this tool. They’re simple…but they’re effective.
Where do you sit?
Being that retail is a sales driven environment, the first place to look is where the majority of revenue is coming from. If you’re doing your job right, it should all be coming from sales…but which channel is the most successful? Is it your online retail, or your in-store sales?
Start by comparing your online retail sales and in-store sales for the last quarter. If you sold more online then you’ll be weighted more towards the right (predominantly online retail), whereas if you’re customers are purchasing more in-store then you’ll be geared more towards the left (predominantly bricks-and-mortar). This simple visualisation will show you where on the spectrum you currently sit.
Where are you going?
The next step is to analyse the current trends. This is vital because it may uncover something different to your original assumptions around where your customer traffic is coming from. A great place to start is to take the last year’s last two years of sales figures and look for trends in purchasing channels, product movement, social media activity, promotions, and sales. These will show you what the trend is for where your sales are being made.
Where to next?
Once you’ve identified where you are (step 1) and how you’ve got there (step 2), turn your attention to aligning your business and sales strategy to find ways to better balance offline vs. online sales that will capitalise on this shift. Do you need to invest in ‘Click & Collect’ a part of your ongoing online retail model? Perhaps you need to reduce the number of brick-and-mortar outlets you have. You may even find that you need to launch a campaign designed to increase foot-traffic to your stores.