Start thinking like a startup
Shifts in a rapidly changing retail world and dramatic changes in consumer behavior continue to be a challenge for some traditional retailers. Legacy retailers that have remained stagnant with their old-guard ways are struggling to maintain sales and stay relevant with today’s consumer.
The successful brands all have one thing in common: They don’t fear change.
The companies that continue to thrive are agile, they change with the times, they embrace new ideas. Brands like Zara, H&M and Nike have adopted this mentality — shedding their old-school skin and stimulating sales, providing customers with expediency, convenience and high satisfaction.
Bottom line: They’re thinking like startups.
Companies that ratified this model early on are the ones up-selling the competition, and for legacy brands to keep up, they’ll need to start doing the same. They can do this by better leveraging their data to understand what customers want and altering their modeling approach to sustain sales. Traditional brands need to stop competing with themselves.
Make the most of mobile
Brands need to go digital or face extinction, and they can start with mobile commerce. Forrester forecasts that U.S. e-commerce sales will grow to more than $530 billion by 2020, with more than 206 million shoppers spending money online.
Take 50-year-old brand Nike — the legacy brand started adopting a tech-startup mentality by focusing on expanding its D2C channels. The sportswear giant plans to grow this part of its business by 250 percent in the next five years to stay ahead of competition. Investing in mobile allows companies to communicate more personalized messages to their consumers and create personalized experiences for targeted customers.
Companies that have executed their mobile strategies in an impactful way have seen it boost margins on their entire e-commerce business. It’s a relatively low cost way to drive traffic and drive top-line sales.
Physical becomes digital
Brands with brick-and-mortar stores need to blur the lines between their physical and digital worlds. Targeting customers and creating tailored shopping experiences with integrated shopping solutions like beacons help with foot traffic in a time of declining in-store shopping. To imitate the speed and efficiency of online shopping, in-store digitization will help put old-guard brands in a better position to serve customers, because, as retail analyst Jan Kniffen points out, about one-third of American malls are poised to close.
Consumer demands are changing at a pace that’s impossible to match without new technology and digital resources.
Making stores exciting for shoppers in a multi-channel marketplace remains difficult as in-store purchasing decisions are the declining minority. However, companies can use this purchasing shift and drive positive change, starting with redefining the role of a store. Instead of harboring overstocked inventory and pushing markdowns to move product, stores can marry their brick-and-mortar arm with an online store. By making stores more like a showroom, customers can try on clothing and then order from a company website. Less retail space and less overstock means lower price points.
Engage in dialogue
Audiences are changing, and communicating properly with different demographics is more important now than ever. This generation responds to upstanding customer service and does its due diligence before making major purchases. Brands need to take this into account when speaking, or face dwindling sales.
Speaking to customers correctly relies heavily on social media, and traditional brands will fare better if they focus their attention here. Social media isn’t something that needs to be done — it needs to be done right. Resources like non-traditional influencer marketing and branded content are ripe with potential for old-fashioned brands.
As the marketplace continues to grow, brands that can’t adapt their social messaging will get pushed out by newer, shinier offerings that hold consumers’ attention. Find avenues to connect with customers, whether it be with a stronger Snapchat presence or focus on Instagram branding. Social selling is a chain reaction — brands become aspirational on social sites if enough users pick up on the product. And as customers improve their engagement and loyalty, company shopping experiences can be tailored through social channels.
Utilize alternative shipping models
A good way to cater to customers is adapting the tech-startup subscription service model like Dollar Shave Club, a brand bought by Unilever for $1 billion. This model is effective because it essentially runs on auto — autopilot and auto-pay. Brands that use this method of distribution are capitalizing on a buyer’s need for products, specifically in the health and personal care sectors. The ease and convenience of subscriptions is difficult to compete against.
Retail survival is becoming difficult. Brands that are efficient, flexible and employ spirited customer service are the ones that will succeed. For traditional companies to compete, they’ll need to alter their DNA. Consumer demands are changing at a pace that’s impossible to match without new technology and digital resources. Next-generation companies offer a compelling combination of brand, technology and talent and have direct access to consumers. The speed of retail tech changes is dizzying — while these may be solutions for today, don’t be surprised if they change tomorrow.
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