by John Stanley
As retailers we are brought up to believe that there are two types of buying modes: the consumer is either buying a purpose item or an impulse item. Our stores are then laid out strategically to encourage impulse sales, especially as these are found to represent 60 percent of total consumer expenditures in many retail operations and the impulse products are often sold at a higher margin. But the recession loomed onto the scene and changed shopping habits.
In a recession, impulse sales naturally decrease across the board and this was true of the recession we’ve just experienced. As we move out of the recession, the consumer is changing once more. Impulse is no longer what they are seeking; they now want information.
You may think that this is where your sales team comes into its own. Sorry, this is not the case. Our own research in March 2010 indicated that 61.8 percent of consumers believed the product knowledge that salespeople provided had declined over the past five years. Consumers now rarely trust their advice. Research that David Evans, the CEO of SPOS Group, recently published also indicates that the information trend that started in the U.S. now has customers wanting access to information right next to the product and they do not want a salesperson to interrupt their shopping experience. This all means that we need to rethink our entire merchandising strategy if we are to be in tune with consumers and grow sales.
Providing information is no small task. If you provide too much information you may confuse the consumer. Provide too little and it implies that you do not know what you are selling. The challenge is getting the balance right.
As a retailer, you need to have an information strategy that helps consumers and provides you with the retail high ground as the expert in your catchment area. In today’s retail environment, the competition is not just other physical retailers, but online retailers as well.
Here are a few steps you can take to own the high ground in the Information race:
1. Have a signage strategy that tells consumers about each product. Provide three benefits and the price. This has been a golden rule of retailing for decades and still applies in the social media era.
2. Accept that in today’s market it is the manufacturer or producer who is the real hero, not the salesperson. So introduce the supplier into the communications chain.
You may want to place a picture of the producer next to the product or even details on the producer’s website or Facebook page. The provider now needs to be a partner in the supply chain as far as the retailer is concerned. This will result in a whole new thinking process in supply chain management.
3. Leaflets on the product you are selling may sound like a dated idea, but in this Information Age there is a place for leaflets that help explain or present a product. These leaflets need to be positioned in holders right next to the product.
4. Remember, we are in the Information Age. You may want to provide a YouTube link that explains how to use a product. You may want to place a TV monitor next to the product to offer a more dynamic presentation at the point of sale. You could also use a Q.C. bar code that can be linked to a webpage and downloaded onto your customers’ mobile phones.
5. Displays and merchandising are still important in the process, but now the display needs to be more educational and tell customers how they can use the product in their own homes. This may require you to link a number of products together to provide consumers with the complete picture.
6. Strategic communications is still part of the game rules. If you place information boards next to all the products on display, it is going to confuse and overwhelm customers. Decide which product you want to push at any given time, provide the information and then rotate your presentations regularly. This will enhance the level of your sales team’s product knowledge and, at the same time, give customers a broad range of product knowledge in increments, making it more likely to be read and absorbed.
7. Research indicates that when consumers communicate through social media, sales go up. So join in on the social media conversation and get customers to present their ideas online. This, in turn, will give you an opportunity to share your own knowledge with them.
Impulse sales will continue; they are a life blood to retailing. What has changed, though, is the way in which people are buying impulse lines. In the past, if a product looked good then customers would buy it. Nowadays, if it looks good then customers will ask you to provide them with the knowledge and information they require to move from being browsers to buyers.
The role of the sales staff will also change. In fact, the term “salesperson” might become obsolete in the future. Consumers are looking for reassurance from salespeople, not a hard push, and retailers need to seriously question whether they are presenting their products in the right way to meet new consumer expectations.
John Stanley is an internationally recognized conference speaker and retail consultant with more than 25 years of experience in 18 countries, and has authored many books.
For more information on John Stanley and his services, please hop online and visit his website at www.JohnStanley.cc.