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Retail is increasingly under pressure. Especially big players like Amazon and Co make many companies clear. But what many perceive as a threat also offers great opportunities. Here you can find out how retailers can use digitization for themselves and which new concepts can already be identified.
Purchasing in the flower shop becomes the online order from the wholesaler. The new sports shoes are also ordered via Adidas. And the new chest of drawers has long been marked on the Amazon Wishlist. The fact is, online trading is increasing. This is also demonstrated by the Mintel study. 92 percent of respondents say they have purchased online in the last 12 months. But this does not have to be the end of the shop. On the contrary.
Contemporary structures promote the shopping experience
While online shopping is supposed to take place anonymously and without emotion, stationary companies have the advantage that they can offer their customers a shopping experience. Modern customers strive for ever more intense shopping experience. It is therefore all the more important that retailers also meet this demand. Therefore, more and more entrepreneurs rely on a hybrid business model. In other words, two business ideas become one. A prime example of this is the bookshop Meyer in Weissenburg.
Café meets Books
Museums also increasingly rely on an integrated café to attract visitors
What distinguishes the bookstore from many others? Your dual function. Matthias Meyer, the Managing Director, realized early on that the sole distribution of books only promotes the shopping experience to a limited extent. In addition to the books, stationery, etc., a café has been integrated, which offers homemade cakes, snacks and coffee. As simple as the idea is, as well as it works. The “second-home atmosphere” invites visitors to take time for their shopping, relax and feel comfortable. As a result, the normal purchase of books becomes a real shopping experience.
The café not only provides for a new branch that generates more revenue, but both models complement each other and create synergy effects. With the intention of drinking a coffee, the customer goes to the bookstore and takes a new book with him in impulse purchase. These attractive and experience-oriented shops are real customer magnets. Especially in times of millenials who like to post about products and the location in the form of appealing images on Instagram.
Growth on the running belt
The retail giants continue to grow and offer customers lower prices through their market power and advanced technology in logistics, marketing and information systems. The customer benefits, however, even the manufacturer is facing some sales giants in a worse negotiating position. Smaller manufacturers cannot meet the needs of large retailers and lose their competitors.
These too have to adapt to the ideas of the individual traders, otherwise the market could be lost. Prices, quantities, details of shipping, quality of the products and other ideas are often provided by the retailer - not the manufacturer. All a question of market power of the seller. Retailers lose when Category Killer hits. These are larger retailers who specialize only in certain products in a category. The better prices and convenient services do not make it easy for small retailers.
New technology for retail
Retail without technology is virtually no longer possible. This starts with the use of merchandise management systems and goes on to tracking customers in the store through sensors and cameras. Even in order to make predictions, smart digital technologies are indispensable. AI and machine learning can help determine price elasticities and customer preferences.
A potential source of income for retail is hardly used, but it is almost obvious. Customer data is a valuable source of monetization. Purchase history, brand and payment preferences are interesting data sets for market research and advertising, which can be transformed into an additional source of income. However, the data can also be used elsewhere.
Do you earn points?
Customer programs have long ceased to have the charm of the past. Discounts, points and loyalty rewards must be adapted to the needs of the customer, preferably not only on the spot on the shop floor. The use of chat bots can also help. The Millenial usually has no problems finding their way around in a well-programmed chat bot. Customer interests must be placed at the center of the bot and navigation through the systems should be simple. (Try our guest list Bot) By entering the user you can concretize preferences and gain new data. Based on purchase preferences, offers can be sent to bot users and individual loyalty programs can be set up.
Recently Apple's payment service Apple Pay was released in Germany and already some German banks have opened up for the service. The expectations of the German banks were exceeded with regard to the service. This shows that digital payment options are becoming increasingly popular in Germany as well.
Cashless payment is a must
Cashless payment is now possible via Apple Pay via your smartphone or Apple Watch
As early as 2016, more than 46% of customers paid in retail with a card. The fact that the percentage is not higher is also likely to be attributable to the lack of offer. The gastronomy included.
An increase in sales is possible here. Although only 21.7% of Germans were paid by card in 2017, card payments account for around 47% of sales in stationary retail. This suggests that digital payment is more money spent by the consumer in the store and an increase in the use of card payments is expected. (Source: EHI)
Nevertheless, it is still not possible to pay by card, especially in rural areas in many shops. And this despite the fact that small companies now have the opportunity to bring a wide range of digital payment options into the house for less than 40 euros. The startup SumUp offers a good opportunity here and impresses with cheap but chic hardware and fair commissions (payment current account 0.95% per transaction). The account opening is free of charge and there are no costs for the account itself. Here you can take a look at the page of SumUp! * *
If you want to learn more about the impact digitization has on the business form of a company and how retail is defined at all, you can read here.
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Retail trade and its forms of operation
Every company that distributes products to end consumers, i.e. B2C, acts as a retailer. This includes, for example, wholesalers or manufacturers who sell their goods directly to the consumer. The type of sales does not matter. In this way, a retailer can sell their goods via phone, TV, online or even in the local store. Retail is always in a transformation and is therefore fast-paced and challenging. Just open a shop and sell great goods, so in most cases it won't work.
Literature often distinguishes between two basic types of retail trade - retail with and without retail space. The trend is more towards larger retail spaces for retailers who still sell their goods in a local store. (Source: Handelsdaten.de) Different types of service levels can be identified on the shop floor: self-service, independent selection, limited service and complete service.
It becomes exciting when retailers no longer have sales space at all. Then the forms of distribution of the goods are very different and some interesting forms can be found.
If the door is knocking again and one of the new Vorwerk Thermomix is presented, we have reached direct sales. Also called multilevel selling or network marketing, it is a nice solution to sell the latest technology to the private environment. In most cases, independent employees are employed, who take over the presentation and sale of products in private households at sales events. Even today, this is still a billion heavy industry, but companies are always finding heavy direct sales in the mulitlevel selling clientele, which is why there is a change in the direction of multilevel distribution strategy.
Direct marketing is not to be confused with direct sales. Previously ordered through the catalogue and promotional brochure, today we shop online on Amazon, Zalando and Co. The focus here is more on the direct response of the customer within the communication measures. Finally, here's the shopping service. This is, however, a special form of retail trade and is to be mentioned here only for completeness. [/ vc_column_text] [/ vc_tta_section] [/ vc_tta_accordion] [/ vc_column] [/ vc_row]
Increasing digitalization causes many companies to fall into a rigidity of shock. Instead of trading, it is hoped that online trading is just a fast-paced trend. But it is by no means too late to rethink your own strategies and adapt them to changing consumer behaviour. So deal intensively with the needs of your customers and ask yourself mercilessly honestly whether you can meet them. If not, there is the possibility to change this in the future at any time. This is where we support you with our market expertise and help you secure long-term success in highly competitive trade.
Hacks to go:
3 tips to keep up with as a retailer
Digitalpayments - Offer cashless payment. This ensures more sales and a better customer journey. Think not only of debit cards but also of online payment, Paypal, etc.
Website - You need a website as a digital business card for your company, but also to get to know your customers. Via the pixel of Facebook you can target your customers via advertisements, learn more about their properties and their buying behavior.
On and Offline Service - This allows you to bind customers to your offer with digital service options, e.g. as a shoe store, to send the shoes of the right size home.
You want to upgrade your retail for digitization? Then write to us via our Facebook chat function or download our free white paper with 19 tips for successful marketing.
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