Management Memos

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February 2019

February 2019 Drive Every Sale You Can In 2019

This Will Be a Tough Year

Retail trade is a metaphor for all kinds of trading. If the economy is good, retail is good. Right now retail isn't so good - which indicates almost all trading is probably off, or under threat. What do retail trends say about your business?

Traditional Retail Is Taking a Hit

Retail majors have public reporting responsibilities and really do show it all. David Jones’s profit halved; Myer declared a ‘disappointing’ loss; and German giant Esprit closed its Australian operations (with global sales falling 40 per cent in four years). US-based ‘Gap’ closed its last Australian store in February 2018, while other brands to have collapsed include Metalicus, Oroton, Marcs, David Lawrence and Pumpkin Patch.

Time To Rethink

Department stores and clothing retailers are rethinking the in-store shopping experience. They’re using buyer behaviour research and other psychological studies, to make themselves more appealing. As a general rule, shoppers don’t consciously take in the changes - they just respond favourably.

Experiential Marketing

Make yourself at home!

For example, Rodd & Gunn’s ‘experiential’ retail store in Chadstone, Melbourne, mimics an actual home. There’s a slanted, wood-panelled, ceiling, and a ‘living room’ space with sofa, armchairs, and a coffee table. Artworks hang on the walls.

It’s all intended to make you feel as relaxed as you would at home, and follows research showing that shoppers feel more comfortable surrounded by familiar design elements. It’s not colour and music that make much difference, but layout and other sensory experiences do.

This isn’t new. We used to call it ‘visual merchandising’, remember?

But it’s more than visual, so let’s call it ‘Experiential Merchandising’.

Why Do This Kind of Thing?

Shopping At Home, Comfortably

Shopping At Home, Comfortably

To get shoppers into the store, the retail store has to compete against this home shopping experience. Shopping from home is comfortable. You can do it in your own time. There’s no pressure to hurry up and buy something, and you can do it in your pyjamas.

So you make the shopper feel more at home in your store. Tactics involve evoking sensory familiarity through furnishings, lighting and even scents, such as the faint smell of wood in a hardware store.

Good traders will also appeal to the human desire to be ‘special’. From providing a luxury environment while waiting, (you can’t staff up to peak demand), to a special welcome when they walk in. There are a myriad ways you can make your buyers feel very special. It makes sense to invest in this, because now every customer is very important.

So now you’re making it a very special experience to buy from you. ‘Experiential Merchandising’ in action!

Only Half The Story

What's happening in-store is only half the story.

If any more evidence was needed, the increase in on-line retail sales in recent times shows that buying at home is so convenient that many many people are choosing it over physical, bricks-and-mortar, shopping.

B2B Buying On-Line

B2B Buyers Also Shop On-Line

It would be a fatal mistake to forget that B2B customers are buying on line too. They probably are not buying while dressed in pyjamas, but they are doing it when it’s convenient and easy for them to buy. And isn’t that when you’d like to be selling?

Again, taking ‘Retail’ as a bellwether, consider this: Foot traffic was down 3.6 per cent from 2016 to 2017, and 4.3 per cent from 2017 to 2018, according to ShopperTrak Australia.

And this: Australian retailers generated 16 per cent more revenue online during Cyber Week in 2018 and 35 per cent more online in the crucial pre-Christmas week of 11-17 December, compared to 2017, according to Salesforce.

So, with store shopping declining and on-line shopping rising, a savvy retailer (and all other traders for that matter), would be working hard to do well across both in-store and on-line trading. Are you working to make the best of both?

But That’s Not All

On-line Sales ShareGrowth

Shouldn't your webshop be mobile friendly?

It isn’t the simple ‘in-store versus on-line’ conundrum.

In the 2018 Christmas sales period, Salesforce found that mobile shopping was the dominant channel for the first time, with 72 per cent of shoppers using mobile and 60 per cent of online orders completed on mobile.

So it seems that it’s not just the comfort and convenience of shopping at home that triggers on-line buying. It’s convenience on-line - even if you’re mobile at the time - that triggers on-line buying.

Making Sense Of It All

NAB chief economist Alan Oster said “ABS [figures] of 0.4 per cent for the month largely reflects a business as usual November. This suggests that the weak December ... at least partly reflects underlying weakness in the retail sector.”

Put another way, this also suggests weakness across a range of trading sectors. You will have to pull out all the stops to get in front this year. In other words, you’ll really need to make your customer experience really great, across all your platforms.

Your Customer Experience - ‘CX’

You can put this all together quite simply. Wherever you sell, you can make it a rewarding and satisfying experience to buy from you. You have to do this most especially this year, when market conditions are going to be tough.

In-store (or in the showroom, or in the office, or wherever you make the sale), your customers have already made an effort to see you face-to-face. Find new ways to make them feel it's a very special experience.

Buying At Lunch Time

Buying at lunch time

On-line, comfort, privacy, and simplicity are the prime customer drivers. Make your on-line store welcoming, intuitive, and easy to get fulfilment.

For shoppers buying under pressure (think 'back-to-school', lunchtime customers in the work canteen, tradies buying job supplies, and so on), make sure your mobile on-line store is quick and easy to use. Not flash and showey. Quick and convenient

This way you’ve planned to make your CX a very special match to just what the customer is looking for - no matter where, or when, they visit you.

What Does This Mean For My Business?

Facing a hard trading outlook for 2019, the message is both simple and challenging. Take a long look at every point of contact for your customers, and,

Provide them with different experiences at each point - which means giving:

The special attention they want when they approach you in store,

The comfort of shopping at home when they approach your web store, and

The quick convenience they need when mobile.


Taking extraordinary steps to make your Customer Experience (“CX”) a superlative experience for your customers will help you Drive Every Sale You Can In 2019

We can help you explore the challenges you face, and the opportunities they represent.

Let's discuss it on a phone call. After that, you can just hang up - if that's what you'd like to do. NSA!

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Any advice, information or comment contained in this document is general in nature, and should not be relied on as the basis for any specific commercial, business, employment, or financial decision. Specific advice should always be obtained for each individual circumstance. Accordingly any advice, information or comment contained herein is for general guidance only.