Since the 2007-2008 recession, retailers have increasingly relied on discounting to drive sales and encourage money-conscious shoppers to browse and make purchases in-store and online. This is especially true now with inflation raging and consumers cautious.
While discounting can be a very effective tactic for shifting stock, it can risk altering how a retailer is perceived by shoppers if it is over used or employed without careful consideration, potentially damaging the retailer’s reputation and hitting the bottom line.
To generate sales without cutting margins and avoid partaking in this race to the bottom, retailers should think about how else they can offer value to their customers. A sure-fire way that retailers can do this is to provide a service that shoppers cannot get elsewhere and are willing to pay a premium for.
Below are 5 ways that retailers can add value to their customers:
Service
It may sound simple, however the truth of the matter is that shoppers are much more likely to shop with you again and become loyal customers if you offer a better experience than your competitors. Retailers can ensure that they are meeting and exceeding the expectations of customers by providing training in the delivery of customer service to new and existing staff, and regularly providing refresher training.
Aside from delivering excellent customer service, retailers can effectively reward the loyalty of frequent shoppers and encourage repeat purchases through inviting shoppers to join a loyalty program. Perks such as money off future purchases or exclusive events can often make the difference between whether a consumer shops with your or a competitor.
Retailers should also consider the service they offer when things don’t go to plan. For instance, one could offer to contact shoppers when products that are out of stock become available, give shoppers plenty of time to return products that they are not completely happy with, or send a written apology.
Expertise
Shoppers prefer to buy from people rather than faceless companies, so they really value it when retailers offer them expert advice. This can transform the shopper and shopkeeper relationship from being purely transactional to being something much deeper and as a result can be a great way for businesses to build preference over a competitor. For instance, a fashion retailer could offer customers free appointments with personal stylists to help them pick out garments that flatter their figure and are within their budget.
Online retailers can provide expert advice to shoppers through interactive customer support via social media channels where many consumers will often look to source opinion before making a purchase. Retailers can go one step further by proactively producing content that shoppers may be searching for and will find useful, such as such as how to guides and step-by-step video tutorials. Retailers could even invite shoppers to share their own advice, whether it be a family recipe for cooking lasagna or a top tip for getting grass stains out of a white t-shirt.
Exclusivity
When you are selling the exact same product as your competitor it can be difficult to justify a higher price, especially in incredibly competitive markets where price changes are closely monitored and scrutinized. However, savvy retailers have realized that many shoppers are willing to pay a premium for items that they can’t buy elsewhere. This offers stores an opportunity to attract customers by offering limited edition products, such as a pair of shoes designed by a local designer or a signed copy of a book.
Retailers can also use exclusivity to reward loyal shoppers by offering them first refusal on new products before they are made available for the public to buy, through organizing special shopping events in store or giving shoppers exclusive access to special products or deals online.
Convenience
We all know that convenience stores charge a little more than other stores, but often we’re willing to pay the difference because it may save us a journey or mean that we can get our hands on a product we want faster. While opening a store in a more convenient location or extending the number of hours that a store is open can be effective on Main Street it’s clear that retailers cannot offer these benefits on the web.
Online retailers must consider how they can make the shopping experience as convenient as possible. For instance, offering free or next-day delivery options or in-store pickup service, gives shoppers the convenience to decide how they would like orders to be delivered and by when. Equally, making a wide range of payment methods available can give shoppers more flexibility when making purchases and can put to rest any concerns that shoppers may have about entering their bank details on the web.
Experience
Shopping should be more than a necessity; it should be something that consumers enjoy regardless of whether they are purchasing a designer hand bag or a can of beans. However this isn’t always the case. All too often consumers are let down by the experience that retailers deliver. Something as simple as a product being out of stock, a mobile website not working, or a store being in disrepair can take some of the shine off the consumer’s experience.
To avoid disappointing shoppers and potentially losing a sale – or worse a customer – it is absolutely vital that retailers pay close attention to the experience that they offer across all channels and aim to exceed expectations. The tried and tested approach of hiring a mystery shopper can be a really effective way for retailers to view the experience that they offer from a shopper’s viewpoint and gain honest feedback about how this could be improved.
Retailers can also adopt this approach to benchmark the experience that they offer to their customers by acting as secret shoppers themselves to assess the level of service offered by their competitors and identify areas for improvement.
George Chang is Chief Channels and Ecommerce Marketplace Officer for Spreetail
This article was originally posted in 2014 and has been updated