2020 was a challenging year. Sadly, many business owners lost their business. Each of them has a unique story, and those businesses failed for various reasons. Remember, hindsight is always 20/20. COVID19 has accelerated the digital transformation journey for many businesses.
Many trends played out before COVID19 disrupted norms, the obvious one being a significant reduction of foot traffic. Famous brands such as Lord and Taylor, Neiman Marcus, Pier1, and Modell’s have filed for bankruptcy in 2020. In my opinion, these companies did not receive advice that prepared them to satisfy the future world. Successful businesses require constant activity in the marketplace because, at some point, year over year, organic growth isn’t possible. That means outside action is needed (divestitures/M&A) and compelling corporate strategies to keep themselves relevant.
SOURCE: S&P Market Intelligence; Image courtesy of CNBC
COVID19 disrupted small business patterns. In contrast, the graph above indicates that’s not necessarily true for large companies. Recently Goldman Sachs, David Binder Research, and Babson University completed an extensive study measuring small business owners’ sentiment. Two figures stuck out to me (see below). In a report published by the U.S. Commerce and MetLife, 58% of small business owners worried about permanent closure. Just 55% of small businesses rated their business as financially healthy.
Without congressional action to extend the Small Business Administration’s Paycheck Protection Program, 36% of business owners indicated they would need to layoff employees or cut employee wages; 30% of business owners will exhaust cash reserves.
Summarizes results May 2020 (Q2) vs. July 2020 (Q3)
Based on the numbers above, more than half of all small businesses aren’t sure if they can stay open, while the other half says financial health is good. How can this be? Let’s dig further to understand what the other half is doing to thrive during this challenging period. Based on the data, here are five ways to improve the retail experience to keep your retail business competitive.
Source: Digital Commerce 360 analysis of U.S. Department of Commerce data; Image courtesy of Yahoo Finance
#1 BOPIS (Buy Online, Pick up in-store)
In an article by yahoo finance, the evidence is unavoidable. Customers are demanding multiple channels to make purchases.
BOPIS encompasses curbside pickup and also “ship from store,” a relatively new option that gets items to you faster by shipping from your nearest store rather than from a warehouse
According to Adobe Analytics, Thanksgiving 2020, online sales increased by 21.5%, which equals roughly $5.1 billion in consumer spending. Furthermore, Dick’s sporting goods reported that 75% of Q2 2020 online orders were fulfilled and shipped directly to consumers from stores. Walmart’s C.E.O. Doug McMillion mentioned in an interview that the enterprise was accelerating digital transformation by two to three years.
#2 Chik-Fil-A Customer Service model
Chik-Fil-A is a famously controversial brand, but not because of its excellent food and customer service. Although, it remains true that they are beating the competition leading to rapid growth across the U.S.A. They currently hold the title of the second-largest fast-food chain (not too shabby). Regardless of how you feel about their values-based corporate philosophy, there are some solid take-a-ways for any business from their customer service operations. They place extreme focus on greeting each customer with a smile from a polite young person. They attempt to make eye contact with each customer who walks in the door. Associates always make a personal connection by exchanging pleasantries such as “How’s your day is going?”. Rumor has it that the C.E.O. himself calls customers who leave negative survey remarks. Talk about a personal touch!
A sign of the times, many restaurants now have a Q.R. code on the table that directs you to a web food/drink menu. Although, you rarely see an option to order. Small businesses might not see the R.O.I. of investing in the technical infrastructure that would send orders directly to the kitchen. Hopefully, this blog has built a genuine business case of why it makes sense to make this investment now. With winter quickly approaching, indoor dining will be risky. Take-out is at an all-time high. Do you want to depend on ordering apps that eat away a minimum of 30% profit? Take matters into your own hands by building a virtual storefront using tools such as WooCommerce, Magneto, or Shopify.
#4 SMS supporting the customer journey
SMS is essential in our daily lives. It helps us stay connected to our friends, family, and work colleagues. SMS has been increasingly instrumental in enhancing the digital customer journey. I recommend reading Twilio’s business case about a U.K. retailer – Marks & Spencer, that leveraged SMS across the global enterprise to increase customer engagement. Twilio’s next-generation IVR, reduced wait times (Independence Bridge Consulting’s IVR is built on Twilio’s platform). Leveraging Twilio’s programmable API, they delivered an extensive range of SMS notifications & alerts that kept customers in the “know.”
The last point is fundamental in retail and shopping psychology. Small business owners may not see the value in hiring experts to execute a well thought merchandising strategy. Not a wise decision. Merchandising is a science, and universities offer advanced degrees in the subject. Anyone who has been to Nordstrom’s can see that all inventory is meticulously placed and scrutinized by the teams assembling the display. Everything is relevant — the lighting, product placement, signage, and stunning displays — to entice and engage customers. Spend the money – hire an intern, a consultant, or a full-time employee. It’s best to trust an expert, so your products fly off the shelves.
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