How to Stay Ahead in the Current Economic Environment
Much like 2016, the first quarter of 2017 has seen a slow start to consumer spending. However, just like last year, this is expected to be a temporary setback. Strong consumer confidence and income growth have set the stage for a spending bounce back in the second quarter.
This creates an opportunity for retailers who want to set themselves up for growth in the second quarter. A key component is striking the right balance between online and brick-and-mortar sales. As consumers’ purchase behavior evolves, retailers must decipher how to change their businesses to best reach consumers.
Consumers' evolving purchase behavior has had a significant impact on the brick-and-mortar locations of major retailers. While some big brands experienced significant growth in their online sales channel, many saw lagging sales at their brick-and-mortar locations. Retailers are taking action and evaluating their model in light of the digital shift, while others will continue to fall behind. However, retailers in niche sectors have been able to sustain the traditional brick-and-mortar sales model.
Across many retail verticals, consumers still want to see the product they’re purchasing in person. They may browse online for specialty items such as jewelry, but they’ll ultimately purchase goods in the store. While stores that focus solely on apparel, electronics and other consumer staple goods may have to adjust their strategy to meet demand for the online marketplace, furniture and other specialty retailers still benefit from having a strong brick-and-mortar presence. A recent survey from TD Bank found that a majority (59%) of furniture retailers say their brick-and-mortar store was the most important channel for selling furniture. Moreover, 58% said they do not offer a mobile application for their customers, with a large percentage noting they do not see the business impact of having one (46%).
However, for other retailers it is imperative to integrate an online sales channel. For these retailers, there are several aspects to consider. The first is to focus on creating a holistic experience for the consumer.
A recent study from PwC found that consumers are using online tools to compare prices in-store while also using online reviews to make their purchase decisions. The online sales channel should be an extension of the brick-and-mortar experience. If a store location has great displays, the online channel should have great product photos to replicate the look. The customer service offered in-store should also be replicated online by providing easy ordering and fast shipping. Everything the customer appreciates about the store should be matched or improved upon online.
Beyond replicating the brick-and-mortar store experience, online sales tools should solve problems. When consumers go online, they want hurdles removed not additional steps to purchase added on. Key components to removing hurdles include fast delivery, easy return policies and no additional fees for online ordering.
Each retailer will approach the balance between brick-and-mortar and online sales differently, but regardless of the approach, staying focused on the consumer will help boost sales across the board. Consumers are not always looking for the cheapest retailer, they often want the one that makes them feel the best. It’s important to evaluate competitors to ensure that pricing and customer service are meeting the industry standard.
Consumers want to feel important and special. A positive in-store experience matched by a seamless online sales program will drive customer loyalty and help boost sales in the second quarter and beyond.