As major high street businesses struggle to cope with the rise of ecommerce and changing shopping habits, Gary Little, co-CEO at consumer finance specialist Duologi, looks at how smaller retailers can thrive in the new retail landscape.
The past few months have largely been characterised by a variety of high street retailers opting to close their doors in favour of moving their operations online, with ONS figures reporting a 17.3% increase in online sales year-on-year.
House of Fraser and Mothercare – two previous heavyweights of the UK high street – have both cut back on a significant numbers of stores in order to streamline their business and create a bigger emphasis on e-retail.
However, despite popular opinion, this step-change does not necessarily mean the “death of the high street”. Instead, we’re seeing a new retail landscape wherein flexibility and customer choice is king, and consumers give their custom to brands which provide something different, whilst allowing them to shop where, when, and – most importantly – how, they want.
Considering that 82% of consumers feel “under-represented” by larger brands, the growth opportunities for smaller retailers, which tend to be more flexible, agile, and in touch with what their customers want, could be huge if leveraged correctly.
With this in mind let’s look at how smaller, more flexible retailers can thrive in the new retail landscape.
Offer something different
Although counter-intuitive, the best thing that smaller brands can do to compete with huge brands is…try not to compete.
Retailers that create genuine points of difference – a quirky in-store service or a very niche online product offering – will stand out from the big names and earn their place in shoppers’ hearts, rather than just competing on price.
This is particularly true when it comes to great customer service. Anyone who has ever tried to get through to the helpdesk of a huge global brand will tell you it can be a lengthy, frustrating and sometimes fruitless process.
Moreover, some larger retailers – perhaps due to lack of resource or training – can often be lacking in friendly and knowledgeable staff. This is where smaller retailers can really step up, by offering a personal service that customers want to come back for.
Listen to what customers want
Large brands have access to enormous pools of data and this top-level analysis works well to predict generalised trends in consumer needs. However, smaller retailers are far more likely to be in tune with what their particular customers want and should use this to their advantage; allowing themselves the flexibility to adapt to changing desires as and when they occur.
In fact, recent research has shown that over half believe that retailers could improve their customer experience by listening to feedback.
Social media can be hugely effectively tool in this respect, providing a two-way street for retailers to ask shoppers what they’re looking for, then acting upon it. Not only will this provide invaluable market research, but gives shoppers the impression that they are part of a brand and have some degree of responsibility for shaping it – further increasing loyalty and reducing the likelihood they will shop elsewhere.
Offer finance options
Consumer spending power is of utmost importance; if shoppers don’t have access to funds, they can’t purchase products. For smaller retailers – that can live or die by a couple of economically unsure months or years – this is even more critical, but those businesses that can offer flexible ways for shoppers to pay are at a distinct advantage.
Point-of-sale finance provides a great way to do this, allowing shoppers to access the funds they need to purchase items within just a few hours, both online and in-store. A range of options, including 0% interest or buy now pay later, means that customers can pay for items in a way that suits them – meaning they are more likely to be accepted for their desired credit amount.
Brands that offer point-of-sale finance can expect to see a significant return; our research shows that sales could be boosted by up to 40% through the provision of at least one of these options.
Make use of online marketplaces
More customers than ever now start their purchase journey on marketplaces such as Amazon and eBay, with research finding that for more than half of shoppers, Amazon is always their first point of call.
However, whilst e-retail has been widely blamed for ruining the UK high street, savvy retailers should look to work with online juggernauts such as Amazon – not necessarily against them.
Selling products through these marketplaces is an invaluable way to boost brand awareness and reach a global audience. What’s more, setting up a store can be done with relatively little outlay and includes the option to take advantage of benefits such as Amazon’s fulfilment infrastructure.
Punching above your weight
Whilst headlines around the ‘death of the high street’ point to an unstable future for retail businesses, there are many ways that smaller brands can fight back and boost sales in a hugely competitive market. These retailers must remember the importance of creating unique selling points, while providing customers with a wide range of options for both purchase and payment.
Gary Little is co-CEO at consumer finance specialist Duologi
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