4 Ways retailers can generate more revenue
By Higor Torchia, Country Manager for Vend EMEA - Oct 4th 2018, 14:06
As a retailer, you go into everything that you do for your business with a plan. There are hundreds of things that you have to consider. How is your time best spent? Are there certain things that influence customers to buy more? Will certain strategies be more effective than other sales strategies?
You’ll quickly find that coming up with the answers to these questions is anything but simple and implementing those successful strategies can prove to be difficult.
That’s because everyone wants more high-value customers and profit for their retail business. There’s a lot of competition out there for a rand. But in order to build a successful retail store, you have to have a successful sales strategy — or rather, several sales strategies you’re willing to implement.
What is a retail sales strategy?
Simply put, a retail sales strategy is how you plan to make more sales in your store. By now you know how to best order inventory and implement customer service best practices, but it’s the strategic way you present your products and your sales that will set you apart from your competition. To really succeed in selling pretty much anything, you need to sell the value of a product over the price. It’s not about just putting up a “sale” sign and hoping for the best. It takes careful planning, and here are some strategies to get you started.
1. Upselling and cross merchandising
One of the most famous American phrases is, “Would you like to supersize your order?” It’s an example of upselling, in which you try to get the customer to buy a slightly more expensive product than the one they were originally going to buy.
This can be effective because sometimes your customers don’t know that a more premium product is available until you mention it, or they simply need to be told about what makes a certain product more valuable.
Just make sure your upsells are related to the original product so that the suggestion makes sense, and also be sensitive to the fact that your customers may be restricted to a certain anticipated price range.
If you’re serious about upselling and cross-selling in your store, make sure your employees are trained to carry out these sales techniques properly. Teach your staff to look out for the customer’s best interests, and have them upsell only if the product is a good fit.
In addition to training your staff, you should also create in-store displays that can do the cross-selling for you. You can do this by dressing up your mannequins so they’re wearing matching clothing and accessories.
Another idea is to put complementary products together. Take a look at this example from Target. The top shelf showcases different brands of sunblock for kids, while the shelf directly below it has swim diapers on display. Target knows that customers shopping for swim diapers will likely need sunblock (and vice versa) so they cleverly put the products together.
2. Flash sales
The chance to save money — but only if you act fast — is one of the oldest tricks in the book, but also one of the most effective. After all, if a killer deal is only offered “for a limited time,” you feel panicked that you’re going to miss out on the sale.
A flash sale can benefit a retail business in a few different ways. First and foremost, it gets people talking and attracts new leads thanks to the hype. It also shortens the sales cycle, which urges people to buy when they would have otherwise procrastinated. As a result, a flash sale can turn a slow time of year into a profitable stretch.
But there’s also the chance you only attract bargain hunters who have no intention of becoming long-term, full price paying customers.
Here’s a quick to-do list for when you’re planning to run a flash sale:
- Make sure you have a clear reason why (move excess inventory vs. attract new customers, for example.)
- Decide what products you’ll sell and how deep discounts will affect profitability.
- Make sure you have enough inventory to fill demand.
- Ensure your website can handle the traffic.
Whenever Apple announces a new product, people camp outside the stores for days because they know that there will be limited quantities and they want the exclusive product. Since the iPhone came out in 2007, they’ve been offered in a limited amount of available stock, and people will do anything to be one of the first with the latest model. It’s genius, seeing as that one product accounts for 65 percent of Apple’s sales.
If you don’t have your own version of an iPhone for your store, it’s time to create one. For example, a boutique shop might strike a deal that designates it as the exclusive retail provider of a certain designer’s products. Exclusivity means the retailer doesn’t have to worry about being undersold by nearby competitors carrying the same products, and so they can set profitable prices.
And studies have shown that limited supply in a virtual shopping environment lead participants to believe scarce items were more popular, and more shoppers chose the scarce item over the non-scarce one when told to select an item of their own.
When it comes to your marketing efforts, there are simple tools you can use to foster an air of exclusivity.
Waiting Lists: Having individuals sign up for an upcoming offer or event ahead of time builds up the hype surrounding your product. The added bonus is that this also helps you build a list that you can use for emails to continue the relationship in the future.
Deadlines: Setting deadlines for registering for an event or redeeming a promotion creates a sense of urgency. Your customers will be pushed to act now before it’s too late.
Limited Quantities: Limiting your promotions to a set number of people also creates a sense of urgency and encourages your customers to act now so they can be one of the lucky recipients.
Qualifications: Making people met a certain set of criteria — like a sale for teachers, for example, or store VIPs — promotes the feeling that since not everyone can have it, it must be more valuable.
4. Lifestyle promotion
Sometimes it’s not as much about marketing a product, as much as it is marketing a lifestyle — that requires your products. Take Lululemon Athletica, a yoga and exercise apparel company, that takes the crown when it comes to lifestyle promotion. Their strategy is based on promoting its “Lululemon Athletica” and “Ivivva Athletica”-branded products as necessary for a healthy, fun lifestyle.
The company reported sales of more than $2.7 billion in 2017, and in the annual report, the executive of the board listed these as strategic pillars:
- Driving innovation – our product pipeline is strong, and we continue to scale our technical innovations.
- Expanding our global footprint – our store formats are nimble, and we are in the early days of introducing Lululemon to our international guests.
- Growing our digital presence – the power of our digital ecosystem is just beginning to be fully harnessed.
- Investing in our people – we know that when our people thrive, our business thrives, and enabling this remains at the forefront of everything we do.
While you might not be able to expand your global footprint, you can expand your local footprint, all while driving innovation with your products, grow your digital presence, and invest in your people to ensure that they all embody the brand and lifestyle that you want to project.
No matter which strategy you decide to implement, make sure that you measure and track the results. Your marketing campaigns are only effective if your business improves on the bottom life.
Set measurable and specific objectives, and set up the right tools to track your progress. What do you want the end result to be? How can you use that insight to design your next campaign?
If something doesn’t work, remember you can always learn from the experience and modify your next campaign.
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