Recently the Chief Wizard, co-founder and CEO at Builder.ai, Sachin Dev Duggal, penned his thoughts on what the future looks like for retail businesses. It was featured on ET Retail by Economic Times. Since Sachin also wrote about the avenues businesses must consider when looking to get closer to their customers, we wanted to share these powerful insights with our readers as well.
Builders, we always strive to help our customers beyond their digital transformation needs and sharing the expertise of our leadership directly with you is just one such endeavour. We hope these insights help retail businesses out there trudge through and thrive despite all challenges.
In what felt like an overnight shift, the way that small businesses traditionally interacted with their customers stopped, changed or morphed. Among those most vulnerable are the smaller retailers without an online presence that depend on their customers to walk through their doors.
While many states are beginning to reopen, a lot of uncertainty still exists around the health of the retail industry. Will capacity be capped to 20%, 50% or 75%? If stores are allowed to be open, will people feel safe walking in, trying on products and exchanging money with staff members? A recent survey found that 90% of shoppers were hesitant to shop in stores because of COVID-19 concerns. And what happens if all the stores need to close again after a matter of months if another wave of the virus occurs?
Having a thoughtful digital presence has been important to staying afloat for many smaller retailers throughout the last few months. As most brick and mortar stores selling non-essential items had to close their doors in March, people turned online. There was a 50% uptick in US online sales in April from the year prior. While digital transformation will play a part in many businesses’ survival, it doesn’t mean that physical stores won’t be around in one year. What it means is that their reliance on a singular channel of interaction will multiply. This is key.
The COVID-19 era has introduced an opportunity for smaller retailers to rethink how they do business, gain new revenue, engage with existing revenue and create efficiencies. Whether you're a business that is looking to build a digital presence from scratch, revamp an existing presence or is still unsure about going digital at all, I’ve provided some avenues to consider when looking to get closer to your customers.
Look inward and take stock
Retailers who are considering e-commerce should not use it as a dumping ground to showcase everything they have available to sell. First, business owners should ask: How many products do I sell? Who are my customers? How often do they use my product? How often do they buy my product? What are the top selling items? What is my product’s shelf life? Does my product have wear and tear?
Just as business owners need to be strategic about how items are presented in their stores, they need to consider the answers to these questions to better understand how an online presence will make the most impact. Once you understand how customers use your product, you can fundamentally look at an approach that’s different.
Consider a subscription service
Right now more than ever, people are looking for a convenient way to get what they want and need. Subscription services are a preferred option for consumers now as they can get their favorite or necessary products delivered directly to their homes without even needing to think about it. If what you are selling is a monthly or bi-monthly product, such as button down shirts, consider a subscription service where shirts are delivered on the first of the month, the previous ones are then picked up and cleaned and delivered the next month. The benefit for the retailer is that you get a steady revenue stream each month. If you sell consumable or household items, consider the ‘subscribe and save’ service as an alternative to one-time transactions. This is a quick and simple way to introduce a new subscription service to your store.
When considering a subscription service, there are a few things you can do to ensure your customers stay happy and loyal. It will be important to communicate to your customers about how your subscription works, the premise and how they will be charged. Additionally, offering a “skip” or “pause” option will also foster consumer retention.
Engage your happy customers and build testimonials
As business moves to the digital space, consumers actually become more skeptical of brands. In a world swarming with scammers, how can you take what a brand tells you at face value? Personally, I would never purchase a product with bad reviews, or no reviews at all. People are more likely to make a purchase if others around them—even total strangers—have bought and enjoyed the product. So, as things are slower now, this is the best time to reach out to your customers and offer incentives in the form of discounts or coupons in return for reviews on your website, app, social platforms, Google, Yelp and more! Your customers are looking for ways to help their favorite businesses, and many will be happy to leave a review. Additionally, it is critical right now to keep your customers in the loop - about whether you’re open, closed, have revised hours and capacity limitations, are hiring, having sales or promotions - the list goes on. If you have a website or an app, create a news or updates section for this information. Additionally, now would be a good time to build your social presence such as a Facebook group or an Instagram page if you don’t have one, to keep your customers in the loop.
If you’re going digital, choose your platform wisely
From what we’ve seen from our customers, apps are more impactful to a business than websites; and according to a recent study, e-commerce apps have a conversion rate that’s 3 times higher than mobile websites. People also view 4.2 times more products per session within apps, compared to mobile sites. Apps are proven to push more people down the purchase funnel, with 1.5 times more conversions per session than through desktop. And the trend isn’t going to change any time soon. In-app sales are growing 46% year-on-year, and as the world accelerates to its digital future, these numbers are only going to rise. Whether the transformation leads to something completely new - like a subscription service or an app - or something morphed - like building a social presence to communicate with your customers - the COVID-19 era has introduced an opportunity. As tough as it is for us to use that word to describe the current circumstances, small and medium businesses around the world should feel encouraged and empowered to rethink and reshape how their businesses move forward.
