Marketing

Retail marketing, the way forward

Marketing and selling in favourable economic conditions:

Prasanna Perera, Marketing and Management Consultant, Chartered Marketer, CIM U.K.

Retail is the world’s largest industry and incorporates a vast array of businesses, too numerous to mention. In Sri Lanka, we are observing a boom in retailing, with many retail establishments being set up, across the country. In this brief article, my endeavour is to discuss certain strategies for retail marketing, specially with the future in mind.

In retail, detail is the key

Going into detail is very important to succeed in any retailing endeavour. Stocks, debtors, costs, operational efficiency, (productivity) and creditors, all need to be monitored and analyzed carefully. A healthy cash flow, through prudent working capital management is a must.

Many retailers go out of business, not due to lack of profits, but lack of cash. Hence, please watch over your cash flows and operational efficiency.

The store is your theatre

You need to put up a good show, when the customer visits your store! Hence, all aspects of the store ambience must be looked into. Visual merchandising, displays, staff attire, store cleanliness, signage and many other aspects. In the present competitive scenario, there is no room for complacency. (You must be on the ball!!)

Visual merchandising and displays are important, as they can help to increase impulse purchases. The in-store ambience must create a pleasant and relaxing shopping experience.

Serving other people

Retail is all about people serving other people. Hence, recruiting the right staff is important. This is presently a major challenge in a Sri Lankan context, because retailing involves hard work. Sri Lankans in general want a cool, relaxing job, which retailing is not.

When recruiting staff, hire for attitude and train for skill. Once the staff are recruited, proper induction and skill development programmes need to be conducted.

Training is not something that is an option, it is a must. Retaining good staff is another challenge. Good remuneration, coupled with fringe benefits and other non-monetary incentives will provide retailers their best bet in staff retention.

A good way of keeping the staff enthusiasm going is to practice spot incentives i.e. rewarding staff immediately they perform something exceptional.

Do not pay lip service to people but believe in your staff, treat them well and they in turn will look after your customers.

Consumer trends

There are emerging trends that need to be addressed. Lifestyles and social value changes are creating newer buying trends. Sri Lankan consumers are more fashion conscious are always on the lookout for something new. Consumers are also desiring greater shopping convenience, clean store environments, pleasant customer service and even parking facilities.

With a greater number of working couples, shopping timings are also changing, with Fridays and weekends preferred. Therefore, in retail marketing, observing consumer buying habits and monitoring future trends is critical.

Retailing is gradually moving away from physical entities to both physical (offline) and online. (Brick and Clicks). Online retailing is now happening globally, specially in the US, Europe and Middle East. Although offline retailing will never be replaced altogether, online retailing is popular for certain product and service categories. Therefore, organizations in retail marketing need to embrace web marketing.

Certain retailers have only online presence (Clicks only). They are referred to as virtual retailers. This trend is forecasted to grow in the years to come.

Growth in loyalty programmes

With consumers spoilt for choice, retail marketers are focusing on retaining customers. Hence, the focus on loyalty programmes. However, there are certain aspects that need to be kept in mind.

The privacy of consumers must be respected and it is prudent to obtain permission before engaging consumers in loyalty programmes. This will ensure good ethical practice and cooperation from loyalty programme customers.

Further, once permission has been secured, data mining can be carried out, to personalize product and service offerings.

It is the category that matters

In retail marketing, category management is the trend. Instead of brands, modern retailers are focused on product and service categories. Hence, manufacturers and brand owners need to develop their competencies in category management, so that joint category initiatives can be carried out with retailers.

Growth in private and own labels

Modern retailers in an endeavour to build their retail store brands, are focusing on developing and marketing their own private labels. This trend will continue to grow in the future, as modern retail keeps expanding.

Naturally, brand owners are unhappy, since they have invested in brand building and retailers are not supporting them. My view is that the consumer is the final jury. Consumers will make the decision for both brand owners and retailers.

Robust supply chains

Supply chains will have to be super efficient, in a retail industry, due to the need for safeguarding margins and enhancing operational efficiency.

Internet based supply chains (e Supply Chains) are now being used, to seamlessly integrate suppliers - manufacturers - consumers (or buyers). Supply chain management will continue to be a key driver of retail marketing in the foreseeable future.

Spiritual marketing

Retail marketing, besides addressing the mind and body of consumers, needs to consider the human spirit (soul) as well. Consumers of the future will have distinct preferences for retail brands, that are seen as ethical, socially responsible and community minded. (People, Planet and Profit).

Retailing is an occasion for shopping, which needs to make the consumer feel good, about themselves and the brands associated. (Both the retailer brands and product and service brand).

In this brief article, I have outlined some ideas about the retail marketing concept - present and future. One thing is certain; Retail marketing is changing rapidly and changing forever.