In years past, consumers shopped simply for the experience of shopping. While running out for vitamins at GNC, a cute dress in the shop next door would catch their eye. Friends made plans to go shopping for fun, not just to get their errands out of the way. The entire experience of shopping has changed for consumers, and it’s affecting the bottom line for retailers.
According to BloombergBusiness, 2015 retails sales hit the lowest they have been since 2009. Electronics stores, clothing stores, and grocers were hard hit. Forbes reported an increase in promotions and sales by major retailers between November and December, a sign that retailers are “hitting the panic button.” As reported by MSN, the National Retail Federation recently forecasted growth of just 3.1 percent for 2016, lower than the 3.5 percent that they’d projected for 2015 (reduced in the summer from the 4.1 percent forecast at the beginning of 2015).
Industry experts referenced in Women’s Wear Daily theorize changes in consumer behavior as the cause of the decline in retail sales. While some retailers blame unseasonably warm weather, most look at long-term changes in shopper habits and preferences.
- Consumers are motivated by need, not the desire to shop. Many of their needs can be met with online shopping. Getting them to a physical store requires more effort from the retailer.
- Shoppers are time-starved. They do not have time to wait in line or search for the right product.
- Consumers value and are spending more money on technology and services than goods.
- Consumers continue to be influenced by the downturn in the economy. Even though they have jobs and are in a better position financially, they are still more conservative with their money.
What can retailers do to turn around sales? The industry experts recommend a few strategies:
- Think strategically about target market. What do the shoppers you want to attract desire most from their shopping experience?
- Help shoppers save time.
- Ensure they can easily find what they need.
- Have a speedy purchase process.
- Consider integrated services so shoppers can take care of more than one errand at a time.
- Offer time-saving services like delivery or same-day delivery and online ordering with pick-up services.
- Make shopping an experience that appeals to those who value service over goods. Any innovative shopping experience must take into account that the shopper values their time over all else. The experience must be valuable enough to allocate precious time to it.
- Meet time-crunch needs of consumers and appeal to their love of technology with a multi-channel approach.
- Consider operations efficiency and inventory management.
- Relationship building. Consumers continue to value personalized service. Give them a relationship worth spending time on with customized customer service.
Before hitting the panic button or simply offering more and more price discounts, consider taking a strategic approach to the problem. What do your customers value most? Saving time? Technology? A relationship? An innovative experience? Incorporating consumers’ changing shopping behaviors into your retail strategy can pull you out of the retail slump, increasing sales and your bottom line.← Back to all articles