Retail Marketing: Key Principles and How to Attract New Customers
Currently, there are many misconceptions about retail businesses, with many believing that shopping malls and brick and mortar stores are closing as eCommerce takes over the world.
While there’s no doubt that eCommerce is getting more substantial, offline sales are surprisingly still 10 times more than online sales.
Even though online shopping provides many conveniences, there are some things that online stores cannot deliver.
For instance, online stores can’t provide the physical, in-store shopping experience, yet most consumers still prefer seeing and touching their products before purchasing.
Shipping is another inconvenience that allows brick and mortar retail stores to prevail. A study by BigCommerce found that 18% of online shoppers hate shipping expenses, 15% hate waiting for products, and 12% dread the difficulties associated with product returns.
Retail businesses should capitalise on these consumer pain points and customise their marketing strategies to address this friction.
Understanding what customers hate online shopping enables retail business owners to create an excellent physical shopping experience that builds customer loyalty.
Outlined below are fundamental principles of retail marketing and marketing strategies that retailers can use to attract new customers.
Critical Principles of Retail Marketing
Retail marketing primarily involves bringing products directly to your customers in retail stores. It involves thorough planning, presentation, and product promotion. Fundamental principles of retail marketing include;
1 – Have Unique Products
Before starting the retail marketing process, you should have unique products on the market. Your products, which can either be tangible or intangible, should also be packed in neat units.
Essentially, you can’t sell products without packing them. However, for your products to stand out, you should neatly package them.
A Forbes survey found that 95% of new product failures occur due to poor quality products and inadequate packaging. Consider the following tips when packing your products;
- Understand your user demographics
- Personalise cheap packaging
- Make packaging part of customer experience
- Prioritise eco-friendly options
2 – Product Price
Price is the second important principle of retail marketing. It would help if you considered several factors when determining product price.
Overhead business expenses, demand, profit, market conditions, competitors, and product positioning are but a few to mention.
You should find a sweet spot on product prices to optimise your sale prices. Consider these two common pricing strategies for your retail products;
- Cost-plus pricing – This pricing method is best for products that aren’t influenced by market changes and competition, such as credit card processing fees. For this method, begin by determining the break-even price for your product, then add a markup depending on your intended profits. However, it isn’t a great pricing strategy for retail products since it doesn’t consider the product’s value or competing products.
- Value-based pricing – This pricing method considers the product’s value to consumers. It appeals to consumers’ emotions, which is high for niche and fashion markets. This is a tremendous retail pricing strategy that allows for high prices and simultaneous profits.
3 – Product Promotion
Product promotion is another retail marketing principle where field and retail marketing intersect. This entails communicating and sparking customer interest in your products.
Product promotion to the retail market features various strategies, including traditional advertisements and influencer marketing.
For effective product promotion, retail business owners should understand their target market and methods of reaching them best.
In-store merchandising, face-to-face marketing, and sale promotions are some helpful tactics to consider for retailers.
4 – Location
Your retail business won’t succeed even with the best products if you cannot reach your target customers.
As you establish your retail outlet, ensure that you find an optimal location, as there is no point in opening a physical store in a place where customers hardly visit.
A good location is essential for customers, as nobody would prefer to go shopping in an area that isn’t convenient.
Retail Marketing Strategies to Attract New Customers
With the above principles taken care of, below are some marketing strategies that retail business owners can use to attract new customers;
1 – Promote buying online, with in-store pickup
Many customers don’t like paying for shipping. Allowing them to pick up their purchases from the store after an online purchase makes your retail store as competitive as other eCommerce shops without physical locations.
If the customer is unhappy with the product, they can always change or return it immediately.
Another reason for allowing customers to shop online and pick their orders is to purchase more products once they get to your store.
When customers see and touch products physically, they will be more likely to spend on them.
You can also offer your customers an incentive to encourage this pattern, such as a 5% discount for customers who purchase their products from your store.
2 – Upload your inventory online
From the BigCommerce report mentioned earlier, 45% of participants who made online purchases also admitted spending approximately 69% of their income monthly on in-store purchases.
This means that customers want to shop online and offline in physical stores. This explains why most eCommerce stores are currently setting up retail shops.
Similarly, retailers should experiment with omnichannel retail.
If you haven’t brought your retail business online, you should dedicate marketing resources towards selling on physical and digital platforms.
While this requires a lot of capital, time, and effort, starting a digital store before opening physical locations is easier.
3 – Optimise your website for local search
A 2017 study found that most consumers discover small businesses through online search.
Interestingly, only 8.4% said that they discovered local businesses physically. This justifies the importance of doing everything to make your retail store appear top on local online searches.
Even after hearing about local businesses through other channels, 36.4% of participants said they searched online stores before visiting.
Below are a few ways of optimising your website for local searches:
- Ensure that you are featured on local directories
- Partner with local bloggers and ask them to review your business
- Register and claim your business name, address, and phone number on Google My Business
- Add “Click to call” buttons on your website
- Request customers to review your business on Google listing
- Respond to positive and negative reviews
4 – Match product prices online
Unknown to most retailers, customers often match online product prices when shopping in the store.
If your prices are higher than those of eCommerce stores, customers may walk out of your retail store without making a purchase.
While it is impossible to match Amazon pricing, you should find alternatives to pricing your products reasonably.
If pricing lower cuts too much on your profits, take advantage of various incentives to attract customers. For instance, you can offer a free warranty, a 30-day money-back guarantee, time-limited deals, or customer support.
Regardless of your preferred incentive, ensure that customers get more value than the amount they would save by shopping online.
5 – Improve your curb appeal
Approximately 8.4% of retail customers discover local businesses by walking in. Increasing the general appeal of your retail store is an easy way of improving this metric.
In the same way, online users would prefer purchasing from eCommerce websites that are appealing and easy to navigate. Local shoppers won’t buy from physical stores unless it looks friendly and products are easy to find.
Work on visual merchandising and place the most attractive items and those most likely to be purchased on display. Ensure that your retail store has clear signage, large display windows, is well-lit, and is clean on the outside.
6 – Provide excellent customer service
Once customers visit your retail store, you should do everything to purchase and shop with you again.
Fortunately, this isn’t as tasking as attracting customers into the store, and it only involves providing good customer service. You should train your employees to welcome customers by introducing themselves by name.
Remind your team of employees that they aren’t not only selling your products as they are also selling the customer experience.
A good customer experience begins when clients walk into your store. Employees should also understand your products in-depth, as it inspires confidence and makes them comfortable when making purchases.
7 – Motivate your employees
Unlike online businesses, employees are the brand ambassadors of your retail store. You can keep them motivated by offering better wages, compensation packages, and other perks to incentivise them to work harder.
Hiring committed and customer-focused employees help reduce employee turnover and increases customer loyalty and retention.
All of these factors contribute to increased profitability. Motivated employees work towards creating an exceptional customer experience.
The world of retail isn’t dying, but it is changing.
Brick-and-mortar stores aren’t going anywhere soon, and business owners should integrate an omnichannel marketing approach for assured success.
Retail business owners should also use a retail marketing platform to optimise retail marketing across multiple channels.
The right platform enables retail businesses to evaluate the effectiveness of specific marketing channels, allocate the proper budgets, and more.