Old School | New School
Are brick-and- mortar and online marketplaces virtually the same?
Okay, so you’ve owned your brick-and-mortar shop for years (or are, perhaps, a retail newbie), and you’re feeling a bit overwhelmed. With the constant arrival of high-tech doodads, new-fangled social media connections, online competition, along with the day-to-day demands of running a retail business, you’re barely able to just keep up. Okay, so you’re more than a bit overwhelmed. Understandably so.
You find yourself contemplating, there’s got to be an easier way. If you’re a seasoned shop owner you might be thinking gosh, handwritten receipts and an occasional ad in the local paper worked just fine. Wahappened? You watch in dismay as other shops crumble, speculating if yours is next, wondering if there’s anything to do to prevent that. Or, maybe you’re secretly looking forward to the freedom and security a nine-to-five gig would entail.
Here’s the good news: while many believe that real shops are doomed in today’s tech-driven world, there are still just as many people who prefer hands-on in an actual store, rather than a virtual one. Although off-line sales still remain bigger than e-commerce, we can’t deny that it’s growing at a significant rate, especially for those of the Millennial persuasion.
It's obvious that today's retail hardscape is more competitive than ever. Not only are you competing with the store across town, but with online shopping, you’re competing with stores all over the world. Even some non-tech savvy are turning to their computers rather than malls. Those deeply committed to our non-cyber stores are being rattled to the core.
The theory as well as some ponderings presented in this article are the following: Are there significant differences in owning and managing an online shop versus a real one? (Spoiler alert: the answer is no!) And, what are the secrets to remaining relevant and profitable in this time of retail shop Armageddon?
Opening my own shop in 1994, I was a wide-eyed, idealistic visionary, thinking what’s the big deal about running a shop anyway? So what if people don’t know what ‘going green’ means. I can educate them about the importance of making eco-choices with every purchase!
It didn’t take long for reality to hit, shifting my positive attitude into OMG this work is never ending, incredibly complicated, I never make a dime and I just can’t keep up with the constant technological mayhem! No one really cares about being ecological except me and a few others, certainly not enough to keep me in business. Why the heck am I doing this anyway?
What kept me going was a passionate feeling of meaningfulness, not only about what I was selling, but about what I was doing as well. It was extremely sad when we had to close in 2014 due to my husband’s illness, yet, admittedly, I felt some relief. I’d grown to love and care about so many customers, and, even though my days were never less than 14 hours, I was doing something important for the community and for the artists and vendors I’d deeply connected with. Mostly, my sadness was about knowing that one more independent, long-time retail holdout would be biting the dust.
Nonetheless, my finger remained firmly on the pulse of the retail shop world. Writing articles for this magazine, plus having a somewhat-under-control shopping addiction, it’s virtually impossible for me to walk into a small shop without my analytical antenna going up. I do a silent critique of merchandise, displays, traffic-flow and customer service. You can take the girl out of her shop but…
Moving from the bustling city into remote mountains has forced me to become an online purchaser. As a loyal small shop supporter, this was something I swore I’d never do. However, this new realm of point-and-click shopping has taught me something you sticking-with-it-no-matter-what brick-and-mortar folks will appreciate: running a virtual shop is pretty much the same thing as running a real shop – same issues, same goals, same challenges, different packaging.
What do I mean by that?
Let’s start with an example. Back in the day, when a customer had a negative experience in a shop, they would most likely do a couple of things. One, they would look around for the manager and report what happened. Perhaps they’d write a note to the owner of the business informing them of their bad experience. They might have taken it further and tell their friends what happened, cautioning them to not shop there. This event would probably not affect the shop too terribly, unless it happened frequently enough to warrant lots of tongue flapping in the community.
Nowadays, before they’re even out the door, customers are on their smartphones writing negative Yelp reviews, posting pictures on Facebook, or even downloading a video of their horror onto Instagram.
Although these posts may spread faster and more furiously, and are probably there for eternity, this negativity may not make much difference to the shop’s livelihood. Even better, the shop owner is able to rapidly counter the information, offer an explanation, or may even be able to apologize to clean things up. These complaints may be the needed alert an oblivious shop owner needs to make some important changes, something they wouldn’t have been aware of without the fear of a viral social media blast.
It’s Kinda the Same
Even though there are a few obvious differences, running a virtual shop is pretty much the same as running a real one. Both require goal setting, flexibility, changing with the evolution of technology and with the curve of customers’ ever-flexing taste. Both need to have an identity or a brand. Both need to sell quality items. Both need to have ease of customer service. And, although the concerns might look different, both need to use creative problem solving constantly. Although one doesn’t need to sweep a virtual shop, or worry about artistic displays, it still needs to be kept orderly, aesthetically appealing and easy to navigate.
Customer Shopping Experience
We’ve got our work cut out for us, but remember that small, independent retailers are essential to healthy communities. We give value that the internet can’t because we create experiences built entirely on human relationships.
People like to shop online for obvious reasons: They can shop 24/7; they can compare prices easily; they can find sales and discounts; they have an endless variety of options. It’s also somewhat of a novelty for some.
Even with all that, for many, nothing beats in-store shopping. If nothing else, they can take it home instantly, avoid paying shipping costs and are able to talk to a real, live sales person who can answer questions and give advice.
Although life for the local retailer is tougher in this digital age, the traditional store is far from being dead. Ironically, many large online merchants are discovering the inherent advantages of real shopping and are opening storefronts of their own.
E-Commerce Sites Can’t Do What Shops Do
They can’t surprise, delight, inspire or engage. No matter how much data they collect or how effectively their algorithms predict behavior, they will always be transaction based. We, on the other hand, can pivot quickly in response to a changing customer base. We know our customers because they interact with us face-to-face daily. We support the local bowling league, homeless shelter or pre-school. The big guys simply don’t connect in a meaningful, human way.
As an article in The New York Times noted, “An age of online shopping has, surprisingly, led to an exciting time for shoppers to get back out onto city streets to explore new, innovative shops. Rather than crushing physical stores, the rise of online shopping is, in many cases, encouraging the development of new and innovative retail shops. Companies of all sizes that once sold primarily through multi-brand retailers are building on their experience running online stores by opening direct-to-consumer brick-and-mortar locations. Established retailers are shifting their focus from basic transactions to offering compelling brand experiences and higher levels of personal service.” (“Clicks to Bricks: Online Retailers Find the Lure of a Store,” November 10, 2016.)
This progression confirms that stores have tremendous potential to take advantage of the changing times and reclaim customers in the increasingly competitive retail market.
Here are some other statistics to help appreciate what you, the indie shop owner, are doing:
Only $.06 of every $1 spent at a big box retailer stays in the community. For a chain store, that figure rises to $.20. By contrast, research has shown that every $1 spent at an independent retailer keeps $.60 circulating in the community.
Shoppers have confidence in small businesses over large corporations by a 3:1 ratio, and recent research by the National Federation of Independent Business and American Express found that 94% of respondents said that shopping at a small business makes them feel good.
What all that means is, if you’re a small shop, what you’re really selling is value.
You most likely already sell unique items, but how else can you leverage your real shop advantages? What can you do that online competition will not or cannot do? What can you offer that other retailers—and especially the big online sellers—have difficulty offering?
We’ve all heard inapplicable business advice from big stores, read empty promises of success by following the latest tried-and-true formula, or listened to advice you just can’t afford to apply. So, here are some down-to-earth suggestions designed for the small indie business to help with day-to-day management of your retail shop by realizing your unique position in this ever-changing world of commerce:
1. Keep it Local
We’ve all heard the phrase “location, location, location.” Concrete shops can reap the benefits of location by becoming a destination point, drawing upon traffic patterns and customer demographics. Even more important is becoming an integral part of the community, a visible fixture, as this will become part of your branding.
Nothing compares with word-of-mouth advertising as your best marketing tool. Understand your customers and take care of them. Make your shop a place where people want to gather, targeting products, services and events that support the locals.
It’s shown that a majority of shoppers prefer the convenience of purchasing at a local retailer if an item is available in both a nearby store and online. Many may research and compare products and pricing online, but will complete their purchases at a convenient location.
Remember: Customers want to support small businesses, especially those in their immediate community. They want to walk in and be greeted as an old friend rather than a credit card number. They love receiving a hand-written follow-up note after a purchase or a real birthday card with a special gift offer.
2. See Me, Touch Me, Feel Me
Probably the most important aspect of a physical shop is the experience customers are afforded. It’s not just a place to buy things, but rather the joy of actually touching, feeling and being with the merchandise. When asked their preference, most customers still prefer to shop in a physical store - as long as the experience is worth it. Making it great is the key to will help grow your business like nothing else.
The truth is, people like to shop. Always have and, arguably, always will. It’s that primitive hunter/gatherer thing. There’s no comparison between making an e-purchase, versus a fun afternoon outing, strolling through unique independent shops, stopping for lunch, sipping a latte, having some Me or Us time. It’s fun trying on clothes, leafing through books, touching artisan made tchotchkes, sampling body products, smelling scented candles, listening to bells chime or even experiencing the simple pleasure of window shopping. It’s not only retail-tainment, it’s actually psychologically therapeutic on many levels.
A successful retail space is more than a well-stocked supermarket to fill up a shopping cart. Rather, it’s a showcase that encourages the human nature wanting to browse and discover. Your job is to create a great shopping atmosphere which means appealing, organized, fun, clean displays and ease of flow. The ambiance, the look and feel of your shop, the uniqueness of products as well as the true caring, above and beyond customer service are all part of the feel-good factors that bring customers back again and again. Even if it’s easier to use a mouse.
Customers can have a soulful, reflective experience in a physical shop, feeling led by their heart or those subconscious, intuitive pulls. When they purchase something, they bring the memory of the entire transaction home with them and it lasts forever. It becomes what they see when they look at that one-of-a-kind handcrafted vase made by a local artist who they just happened to meet at your shop. It’s the joy they feel in the shower using that fragrant handmade organic soap they splurged on from your shop, just because. Or the feeling they get knowing they supported an independent business rather than being just a statistic on Amazon’s algorithm.
Your job is to constantly research what’s going on in the realm of shops and shopping. Take frequent field trips to malls and other shops to see what works and what doesn’t. What grabs your attention and why? What about colors? Observe how they deliver a full sensory experience of sight, sound, touch and feel. How are their displays interactive in some way? Do they mix products or accessorize items together? Get inspired by what they do and adjust it to give it your own flavor.
Add activities such as product demonstrations, book signings, poetry readings, events for children, classes, contests, celebrations etc. Not just end-of-season sales or special discounts. Make your shop worth the visit.
3. Know Your Stuff
Whether by seeing a product up close, observing it demonstrated in person, or finding answers to detailed questions, consumers turn to retailers for their knowledge. That’s why you’re in business, actually. Statistically, more shoppers are likely to buy when helped by a knowledgeable salesperson and value their recommendations. They often buy more than they planned if they like the salesperson. They’ll even travel further to find the most knowledgeable source if the same item is available at different shops.
Even if their initial product research is done online, it’s an expert salesperson at a local store who closes the deal, even if the price is slightly higher. This is true even for customers reared in the digital age.
What that means is educating your staff thoroughly, and maybe even brush up on your own product knowledge. Be a problem solver and an informed expert, offering go-to information as part of your impeccable customer service routine.
4. Trust, Trust, Trust
By a shop’s mere physical presence, trust is built, something that consumers can’t get online. This is the key to relationship building, your most important success commodity.
Consumers associate brick-and-mortar with legitimacy. By engaging with a seller face to face, they feel more secure, knowing you will be there if there are issues or the need to return something. They may feel more secure making credit-card transactions at a store counter rather than running the risk of being hacked online.
Personal interactions lead to customer retention. It will also lead to good reviews and a strong social-media following. Trust goes a long way, so be careful: It can be easily lost by a few bad interactions.
5. Techno Logic
Even though it might be overwhelming, the myriad benefits that technology can bring to your store should never be overlooked. It’s always a significant investment, so keep track of new developments in tools for retail solutions, to find options that will address your needs and fit your budget. Nowadays, there are programs available for small shops that used to only be available for megastores.
Updating or adding technology can deliver a tremendous return on investment. It can help reduce labor costs, improve productivity, automate manual tasks and help create financial statements. Point-of-sale (POS) systems can help speed up your checkout process with fast scanning and less errors. Most can keep an accurate track of inventory which can be incredibly useful for those dreaded yearly physical item counts. They can even give statistics on profit margins, trending and much more.
You can also use technology to reduce the costs of processing financial transactions. Using electronic signature captures can also eliminate that stack of credit slips which can make it easier to handle disputed transactions.
In addition, add business intelligence and analytics to your arsenal. This will provide insights to help get the right products in the right quantities at the right time. There are even programs that can help develop an accurate merchandise plan as well as the right product-mix for your retail store.
Use analytics to help gain a better understanding of your customers. There are programs that collect data to keep track of purchase history, returns, items they are looking for, email addresses, birthdays, etc. which helps tremendously in crafting marketing strategies. This can even help fine-tune a more personal customer service plan.
Tools such as Google Analytics helps show what your customers are looking for on your website, how they’re finding your site, and how they’re behaving once there. This can allow you to track online shopping patterns and provide individualized offers.
Utilize an eclectic array of marketing tools such as email, newsletters, blog, social media, etc. will help customers deepen their engagement with your store and keep you on their radar. Be careful not to overdo it, but with the overwhelming choices available, it’s possible to fill in any cracks.
6. In it Together
Managing a retail store is a complex puzzle. However, if you start with caring about the customer experience, the pieces start to fall into place. In other words, if the customer's experience in your store is what drives all the choices you make, everything comes together. Don’t ever forget who the lifeblood of your retail business is, especially now when shoppers have infinite choices.
Today, what drives business is not just about service, but rather about the holistic customer experience with all aspects working together - from salespeople to policies to cleanliness to merchandising to inventory.
Great service is valued highly, and could cost many a sale if it’s not there. It’s something that costs little to establish and should be a priority. Delivering that personal touch is what small shops can excel at, and it’s something that can never happen online.
Your team is the face of your store. We’ve all experienced a rude, inattentive or uninformed clerk in a beautiful shop, and these encounters practically guarantee lost customers for life.
Hire people who bring customer service skills to the table, or those who have potential to do so. Look for those with personalities somewhat different from yours to add balance and complement what you bring. Rather than letting things fester, regularly review your service basics and communicate quickly when someone isn’t upholding your standards. Don’t be afraid to let an employee go who doesn’t fit the vibe, or passes the buck about not making sales, or makes excuses about keeping responsibilities. The importance of setting goals with your staff will make sure you and your employees are on the same page. Discuss where you are headed. Talk about sales numbers. Encourage “upselling” without pushiness. Train employees about the merchandise so they’re informed and can answer questions effortlessly. Consider creating a commission payment that motivates employees to sell higher grossing products.
Most importantly, always make customers feel welcome, find ways to help them and sincerely thank them for their business. Part of serving them is to have specific customer follow-up procedures such as a thank you email or keeping them posted about upcoming events and sales.
7. Be Yourself
Small shops mean unique. If you’re not, why would a customer bother to shop there? An integral part of that is being passionate and knowledgeable about what you sell, which is hopefully why you opened to begin with.
However, don’t assume that everyone shares your passion or your knowledge. For example, if someone is just beginning to delve into New Age information, make sure to have products that could introduce them to this realm. That’s what can bring someone to your passion and ultimately what builds your customer base.
As a small business, you are exclusively suited to get to know your customers, adapt to their changing needs and help with any confusion. Your job is to remain relevant, but stay loyal to your brand. However, it’s also about being innovative, providing quality products and keeping your prices competitive.
As the mass merchandise stores move into smaller towns, small independent retailers are feeling the squeeze. To survive, you need to continue to change and update your merchandise mix, perhaps even rethink some product lines. Carefully introduce new items and notice the response you get. Customers want to see fresh and new, but they may also shop your store for certain consistent items.
If you’re considering carrying an item that big stores also sell, make sure there’s a compelling reason to do so. Being unique means that you ultimately control your own brand, pricing and business destiny.
8. What You See Is What You Get
The silent salesperson in your store is visual merchandising. An engaging, well-done display can sell as many products as a live salesperson and gives you the upper hand over online shops.
Each morning, as you unlock the door, stand on the threshold of your store (like a customer) and take a critical look at what you see. Would you like to shop there? What display pulls your eye? What screams excitement or looks tired and bare? Is there a natural traffic pattern that needs tweaking?
Once in a while, invite a friend to give their objective opinion, especially if they’re not an expert but just an average shopper. Constantly observe customers as the best way to evaluate if a display is working or not being noticed. There might be some “dead” areas of your shop that need to be livened.
Displays should be straightened daily, freshened frequently and major rearrangements done monthly, especially when holiday merchandise arrives. This not only keeps things attractive, it moves energy around and allows your inventory to be “re-loved!”
Create easy=to=navigate product vignettes that group items together; present inspirational ways to utilize merchandise at home; make aesthetically pleasing displays using layers of different heights to add interest and move the eye.
9. Cash Flows
Although it’s not often something a visionary business owner necessarily wants to deal with, it’s essential that you understand your financial numbers, and what these numbers are telling you.
Cash flow is a daunting challenge in a business that’s as unpredictable as the weather. There are cash expenditures that crop up on a on a daily, weekly and quarterly basis including payroll, inventory, accounts payable and taxes. Most shop owners don’t take the time to create a budget, thus find themselves strapped for cash at different points.
Budget your demands over the course of the next few months including upcoming orders, steady costs such as rent, utilities, payroll, etc. Forecast (AKA “Open to Buy”) monies by going over sales reports from prior years. Always go back at least two years to get a fairly accurate prediction of what you need to purchase for upcoming months keeping in mind any changes you’re observing.
Planning in this way will allow you to allocate for big purchases that may need to happen throughout the year so you’re always prepared.
Remember: Nothing is worse (for you and your vendors) than ordering inventory and discovering you don’t have the money to pay for it!
Speaking of which, inventory management is crucial to customer experience. Being out of stock or not having a full assortment of something a customer came in for is devastating and will send them immediately to their laptop. Apologizing and special ordering will only take you so far.
It may seem like a pittance, but review your credit card processing costs and fees. Spend time understanding the costs involved in processing payments. Check with your provider and ask about specific charges and fees on your monthly statements. Shop around to find less expensive credit card vendors so you can reduce costs. Every penny counts in retail.
Ask your local economic development agency or chamber of commerce for information about government grants and utility discounts. You might be surprised at the array of sponsored incentives that can lower everything from capital expenditures to payroll costs. Even such things as new signage, landscaping, lightbulbs and modernization of your computers and POS. Never hurts to ask!
Since e-shoppers can easily research items sold in your shop and get them cheaper with the click of a mouse, make sure your vendors commit to keeping their prices the same as yours on their websites. If not, don’t carry them!
10. It’s All Important
In brick-and-mortar shops, every little thing speaks volumes. Customers may not be consciously aware as to why they’re reacting, but their subconscious knows. Your store design, what an employee is wearing, return policies, lighting, even the background music: These are messages about what you stand for, the demographics you’re aiming at, and whether you are truly walking your talk.
Examine your practices and policies closely to see if they’re perhaps working against your customer experience. Is it really necessary to have a no-return policy? Is heavy metal music the vibe for your New Age shop? When was the last time you really cleaned underneath your merchandise or patched nail holed walls? Do torn jeans represent what your customers relate to in a salesperson? Is fluorescent lighting making your products look dead? There are simple changes that could be a huge help to your shop’s presentation and feel.
11. Change is Good
Often, change seems complicated and overwhelming until you actually start. Remember learning to drive and how frightened you were? Now, it’s second nature. Remember your first computer and how terrifying it was? Now, it’s undoubtedly a piece-a-cake.
Getting an updated inventory control system, starting a blog or posting items for sale on your website will not be as difficult as you may imagine. Remember: There are those who can help, so don’t hesitate to find them. It might take some work, but you can do it.
In conclusion, the only thing we fully control, in retail and in life, is what we give. Everything else is merely reaction to external forces. By approaching this ever-changing retail climate with passionate generosity, figuring out what you can offer that’s relevant, meaningful and important, and choosing to give it with love, you become the game changers of the world. Not only will your odds of success increase, on a deeper level, your heart and soul will feel good. Isn’t that truly why you’re in business?
Since we are all involved in the consciousness business, here’s a powerful word of advice: Change one simple word in your vocabulary and it can shift your attitude about everything. Instead of saying I have to, say I get to. This turns everything into a place of gratitude. What a difference a word makes!