5 Crucial Ways Retail Brands Can Pivot Toward Profitability
Building a new, sustainable business model is the defining factor separating success and failure.
It goes without saying that 2020 has been a very unique year for businesses in every industry and sector. But despite all the disruptions, some businesses have been able to maintain or even increase their sales. Granted, that's mostly due to the kind of products businesses sell, like personal care necessities, but in some cases, success has come because of tweaks to business models and operations that suit the times.
From established brands moving to the Facebook Shops platform and music bands embracing online retail in lieu of tours to Shopify introducing invoicing and other services for sellers, it is clear that the retail industry is prime for seismic shifts. For retail businesses looking to increase their profitability during and after the current disruptions, the following are some of the most important pivots to consider implementing:
The fact is, retail businesses need to have an online presence, but many businesses have either opted not to be online at all or have just put up a basic website with limited functionality — more for local SEO than anything else. That strategy is outdated. As we can see from the dramatic rise of online grocery shopping during the lockdown, which is something people traditionally preferred to do in person, a complete ecommerce experience is critical for every retail outfit. Even though the argument can be made that people will revert to traditional shopping attitudes after a while, that “while” is likely to be quite some time, and studies have shown that up to 52 percent of people surveyed don’t intend to return to physical shopping. Thankfully, the fix is simple — get a fully functional website with great UI/UX and integrate it with your usual delivery methods.
2. Delivery options
Your usual delivery methods might require some tweaking. As more people avoid close, in-person interactions, offering the right delivery options that balance safety (of both the customer and your staff), efficiency and security are increasingly important. Curbside pickup is growing in popularity, as are drive-thru systems that allow customers to get their packages without leaving their vehicles. The flipside of this is many businesses that rely on in-store upsells may lose a significant amount of business. Offering as many options as possible, combined with a responsive website optimized to make shopping seamless and engaging, can actually make up for that.
3. Customer service
Customer service is another factor that can help make up the income from in-store upsells and even boost earnings. Depending on the kinds of goods you sell, there might be a need for your customer service staff to provide technical guidance that would typically be shown to a customer in-store. Having highly experienced and personable staff walk customers through any issues will make a huge impact on them and boost the loyalty they feel toward your brand. Even if you do not sell technical products, you should still consider dedicating more resources to customer service to help customers resolve issues quicker. You'll benefit from the sentiment of being responsive to their needs in difficult times. The interactions will be a good opportunity to introduce upsells or other special offers.
DTC brands have been growing significantly. A recent study evaluating direct-to-consumer ecommerce sales showed sales will grow by 24.3 percent to $17.75 billion in 2020, up from $14.28 billion in 2019. The current situation is likely to make ecommerce grow even more as people avoid going to crowded places. According to Jay Lu, CEO of Sofary, “being able to bypass traditional intermediaries (such as a distributor, wholesaler, broker, or agent), market to and acquire customers directly will be critical to shave off costs. When it comes to scaling and growing profits, being able to provide that customer with their products in a timely manner, and to ensure their satisfaction in terms of the product itself and customer service, will be the defining factor between successful retail brands and those that aren’t in 2020 and beyond.”
5. Contactless payments
As with no-contact delivery options, providing your customers the opportunity to make payments without having to exchange cash or touch POS terminal keypads is mandatory now, if you want to make sure as many people as possible feel comfortable coming into your store to make purchases.
The options for contactless payments are diverse, and the more you have available for customers to choose from, the better positioned you will be. From Apple Pay, Samsung Pay and other similar services to using QR codes, the key is to be as flexible as possible. More people will continue to shift toward being fully digital over time so the investments you make in overhauling your payment systems now will be valuable and generate returns in the long-term.