Five Steps to Success
Industry experts offer tips on how to boost business as the summer season cools off.
By Lyndsay McGregor
Industry experts offer tips on how to boost business as the summer season cools off.
By Lyndsay McGregor
Consumers’ moderate spending in June may be the latest sign the economy is trudging through a weak patch in the middle of the year, but all hope is not lost. Retailers who weathered a tepid first half (blamed largely on a record cold spring) should turn their hopes to back-to-school season. In addition, the University of Michigan Consumer Sentiment Index in May reached its highest level since the beginning of the recession. That coupled with the fact that consumer sentiment does not usually impact retail sales immediately—it takes a few months for that bounce to materialize at cash registers—on top of a record stock market that surely will trickle some of its good fortunes down through the economy and a (slightly) improving job market lends hope that there are ways and means to capitalize on this good macro economic news and finish 2013 on a high note.
Here, retail experts discuss key tips on drawing in customers—from refreshing your storefront to turning your store into an active community center—as a means to further capitalize on the macro positives. Your business and, hopefully, your customers will thank you.
1. BACK-TO-SCHOOL RULES
ShopperTrak, the world’s largest counter and analyzer of retail foot traffic, estimates that sales during this month’s back-to-school shopping spree will increase by 4.3 percent, reflecting the U.S. economy’s slow but steady gains. In recent years, back-to-school shoppers had focused on stores with the best value, but with this positive consumer sentiment, shoppers may be more willing to browse more stores—not just the value locations—thus adding to the increased foot traffic and sales.
“Back-to-school is the Super Bowl of retail, in a way. There’s a guarded optimism around it, but retailers are excited about it,” confirms Matt Priest, president of the Footwear Retailers and Distributors Association. Marshal Cohen, chief industry analyst of the NPD Group, a consumer market research firm that tracks the footwear industry, says tapping into back-to-school can have its advantages beyond kids’ categories. “As parents start shopping for their kids they start looking at and assessing their own wardrobes,” he offers. “Especially when it comes to footwear, which is such an impulse buy. If consumers see their size and they know it might not be there tomorrow, they’ll buy it.”
In order to seize this opportunity, retailers are advised to prepare their marketing and operations to increase their foot traffic and, ultimately, shopper conversion rates. “Retailers need to make sure they have the right product in stock,” says Poonam Goyal, a Bloomberg Industries senior retail analyst. “We had a relatively warm winter and that hurt winter merchandise. Now that we’re entering the back-to-school season, all the summer stock is going to be marked down. Retailers need to have the right mix of summer and fall to make sure they’re not losing the customer at any one end.”
2. STAY FRESH
There’s nothing that drags down a store more than old inventory. As Priest says, “Keeping products fresh is big. We’re now in an era where there are more than four seasons. Trends can be in and out very quickly.” As such, Priest advises that whether you’re approaching the end of the summer season or the start of fall it holds true that retailers need to remain focused on product display and carrying brands and styles consumers want. “You need to have the ability to meet customer demand instantaneously,” he says. Cohen agrees: “While you may not have customers thinking about boots at the end of the summer, now is a great opportunity to showcase what colors and trends you have for the upcoming season.”
But be careful not to give too much away, warns York Rasmusson, management consultant at New York’s The Parker Avery Group. “Put out enough product to draw customers into the store but not so much that they feel like they can delay their decision to buy and pick it up elsewhere,” he advises, adding, “Retailers need to pay a lot of attention to updating the detail and the presentation of their stores. Customers have a fresh view of what they saw in June and what they will see in the fall. Offer consumers an enhanced view of the store to go along with new product.”
Tarek Hassan, co-owner of The Tannery in Boston, recommends a blended approach. “We try to give consumers a taste of what fall and back-to-school is going to look like. It adds energy and excitement to the store—not only among the consumers but also the employees,” he says. “They always get excited about the new products on the floor and it gets them hyped for the upcoming season.” He adds, “For the consumer that’s looking right now it keeps us in the back of their mind so when the time comes they know where to go.”
3. COMMUNITY OUTREACH: MEET AND GREET
Buying and selling is moving far beyond a simple choice of online versus brick-and-mortar to a consumer experience that involves in-store, mobile, geolocation, kiosk, social and reward initiatives—all in real time. Customer loyalty and profitability increasingly depend on event-based marketing. Meaning, is your store an active member of the community? Is it in tune with what your target customers do, like and are concerned about?
The advice here being: Get to know your audience. Is there a marathon, for example, in your town and do a lot of your customers participate? Do they typically shop for back-to-school merchandise and are they concerned about local school issues? “Events that will soon be top of mind for customers should already be top of mind for retailers,” Rasmusson offers. When it comes to local sponsorship, whether it’s a soup kitchen or a local music festival, he says retailers need to weigh who the other sponsors are and what touch points will be available to you in order to drive the greatest value for your brand. Will you have a booth or is your name only on a poster? “Lots of money is often invested with little ROI in sponsoring social or community events,” he warns. “Those events need to be the right fit with your brand and customer.”
Priest says any type of creative buzz that gets people in your store is better than standing in the shadows. “Coupons get people in the stores. And Twitter and Pinterest really drive consumer behavior and can do it very quickly,” Priest remarks. “You have to create buzz, whether it’s a shoe designer people might be interested in meeting or having a flash sale so people have an added incentive to come in. Ask yourself, ‘Can I replicate some of the things I’m seeing online?’” As Cohen sees it: “There are all kinds of things you can do to get customers into your store other than putting everything on sale just because stock isn’t moving. If you can bring them in for an event, there’s a good chance they’ll end up buying.”
Hassan is a firm believer in the power of community outreach. “When you host an event for a hot new sneaker and invite an athlete to back up the promotion, it brings in the locals and it also brings in outsiders, which helps promote the store and the brand at the same time,” he offers. Goyal agrees: “You have to give the consumer a reason to come to your store and promotions help you do that. It’s good to interact with your community.” She adds, “Any marketing, as long as it’s targeted, is good marketing.”
4. APPEAL TO SHARP DRESSERS
Men across the country are dressing sharper than ever, and it goes far beyond the likes of actors Eddie Redmayne or Bradley Cooper striking sartorial poses on the red carpet. A tight job market is helping fuel this spiffy revival. Take this sobering bit of data: Over the past 12 years, the U.S. has gone from having the highest share of employed 25- to 34-year-olds among large economies to having among the lowest. And while the American economy has come back more robustly than some of its global rivals in terms of overall production, the recovery has been light on jobs. Thus, many young people are taking their work more seriously and want to present themselves in a more professional way, eschewing the cargo shorts and flip-flops uniform of Generation X in favor of dapper duds and dress shoes.
“Dress is up,” confirms Priest, pointing to shoes that marry traditional uppers with a rubber outsole. “It’s a classic look with a modern twist. Retailers need to carry fresh product that meets the needs of the younger workforce that is on trend.”
Cohen says the key to marketing to younger consumers, men and women alike, is truth, community and competition. “Tell them exactly what they need to know because they can smell a rat if you’re trying to spin a line,” he quips. And don’t even think of treating them like their elders. “Everybody buys anti-aging skincare but not everybody has the same reason for buying it so you can’t have the same message. The trigger points are different.”
Goyal agrees: “Retailers need to relate to that consumer because they know exactly what they’re looking for and if they can’t get it at a brick-and-mortar, they can and will get it online,” she says.
5. LIVING SOCIAL
According to social media analytics startup Campalyst, 97 percent of the top 250 retailers are actively on Facebook and have an average number of fans ranking close to one million. “You have got to expand your Internet presence and move with the industry,” Goyal states. “Retailers that don’t have an Internet presence are going to lose market share. You need to be always working on it and marketing it appropriately, and driving loyalty back to the site through social media posts on Facebook and Twitter. Make sure the customer you’re targeting knows you exist.”
A recent Intuit Small Business Survey found that 27 percent of small business owners wish for more marketing muscle. Cohen believes the Internet is a great way to reach a broader base consumer to tell a story beyond what traditional footwear tells—and to do it for a whole lot less than traditional media rates. “Why not communicate directly with the consumer so they in turn can understand your message, share the message and recognize why they should be buying your product over the competition,” he says. Goyal furthers this sentiment: “Having an online retail presence drives product quickly to someone who’s on the move. It also enables you to reach a lot of the younger customers—most of who are plugged in,” she says.
Along these lines, Rasmusson notes that there are IT solutions such as Prism and ShopKeep that help level the playing field against online titans by offering in-store analytics that can create more effective customer loyalty and rewards programs. For smaller retailers not ready to make the technology investment, he recommends simply talking to your customers and watching them closely so you can make informed suggestions. “Know your product intimately and it becomes an experience for your customers,” Rasmusson says.