Power retailing in tough times - Article 12:

Marketing and selling in tough economic conditions

Series by : Prasanna Perera - Marketing and Management Consultant, Chartered Marketer, CIM U.K.

Talk to any retail establishment and the sentiment is one of cautious optimism. The past few months have been really trying for all retailers be it supermarkets, clothing chains, footwear stores and jewellery stores.

While customers continue to visit retail establishments, purchase values have not increased despite the price increases. This means that customers are in fact buying less, due to depleting incomes and limited buying power. Against this backdrop, this brief article will provide insights on tactics that can be implemented to accelerate sales values and revenues.

1. Focusing on creating a rewarding shopping experience for the customer. The in-store ambience, merchandising and layout is important.

2. Train the staff to provide excellent service to customers. The staff can enhance the shopping experience by being courteous, friendly and cheerful.

3. Reward customers for their loyalty, thereby adding genuine value. Loyalty program can also be used to track consumer buyer behaviour and purchase habits. Data mining is also a critical task in this regard.

4. Do not get paranoid about selling prices. Remember the age old Chinese saying "Good things no cheap, cheap things no good." Rather than playing the price discounting game which is detrimental to margins, consider pricing on a "value" basis. Value is providing customers the exact quality for the price they are paying.

5. Be flexible in your dealings with customers. After all, retailing is not all about making profits, but making profits through customer satisfaction.

6. Instead of merely cost cutting on a irrational basis, rationalise costs by taking away waste and unproductive expenditure. Common areas of waste in retailing is stocks, damaged merchandise, obsolete merchandise and utilities.

7. Try cost innovations to enhance cost efficiency (productivity). For example, renewable energy as opposed to fossil fuels, in transportation, lighting etc.,

8. Study your supply chains and value chains and outsource non core activities. Do not waste scarce internal resources, in activities which can easily be provided by third parties. (Transportation, shipping, marketing research, advertising and promotions etc.,)

9. Conduct sales promotions which are "value additions." rather than direct price discounting, focus on banded offers, free offers etc.,

10. Do not underestimate the power of WOM (word-of-mouth) marketing. After all, gossiping is a Sri Lankan pastime and retailers can leverage on this trait. Get your customers, to get new customers.

11. Try and reduce the transaction cost through e-commerce and web marketing. Encourage customers to visit your website and provide feedback.

12. Location is key in retailing, specially so in tough times. When setting up new retail locations a thorough market analysis is required.

By adopting some of these tactics, retailers will certainly be able to tide-over the difficult times, and look for a brighter 2010.