You go out for a walk and you see an attractive window display in a local departmental store showcasing their summer collection. You are scrolling through Facebook and you see an ad highlighting lightweight, comfort-wear shoes. You check your email and you have a special discount offer from an e-commerce store from where you bought a product last month. All these are examples of retail marketing.
Retail is the sale of goods or services from a business to a consumer for their own use and retail marketing is the process in which retailers promote awareness and attract customers to buy products from their retail store. Retailers generally do not manufacture the products. They just collect products from manufacturers and are responsible for selling them. There are 4 key principles of retail marketing also known as the 4 P’s of retail marketing.
Product
This refers to the selection of products that a retailer sells. Even if you are not manufacturing your own products, the products that you are choosing to sell in your store must be selected carefully. Here’s how you can sell distinguished products:
- You must know who your audience is, and what their needs, interests, and preferences are.
- You must work on your packaging. Make it more personalized to create an ever-lasting relationship with your customers.
- Plan how you will promote your products and keep the conversation going with your customers
Price: Due to increasing competition amongst retailers, many of you might have to slash the prices. However, it is also common for retailers to sell the same products in different price ranges. There are two common methods of retail pricing:
- Cost-plus pricing: In this method, you have to consider the overall cost of the production unit and add a markup price to it. This method could be adopted for pricing products that are not influenced by market conditions.
- Value-based pricing: In this method, the pricing of the product is decided based on the value of the product. You might have seen such pricing in the fashion industry where designer brands or labels keep their prices preferably higher because their products have a brand value.
Place
It refers to where your customers can find you, that is, the distribution channels or delivery lines that you use. The channel that you use for the distribution of your products matters a lot in the success of your retail business.
For instance, you might be selling cotton dresses in a local store. However, at the same time, your competitor is selling them through a wholesaler. Both of you will have different profits and different outreach.
Promotion
It refers to how you connect with your customers and make them aware of your brand and products. There are many different ways of promoting your products. In fact, this is what retail marketing is all about. You can use advertisements, social media, partnerships or collaborations, or even in-store events to promote a product!
But, what matters today is how personalized your promotion activities are so that they make the right impact on the customer.
You might ignore the specials board in a restaurant that displays the special dish of the day. But, you would not ignore the email from that restaurant that gives you a 10% discount on the specials exclusively!
You might ignore an email that tells you about the upcoming sale in an online store. But, you would not ignore the email that gives you a members-only benefit in that sale!
Yes, personalization is changing retail marketing completely.
Even the statistics agree with me…
- 80% of consumers are more likely to buy from a company that provides a tailored experience,
- 66% of consumers expect brands to understand their individual needs, and
- 70% of consumers say that how well a company understands its individual needs impacts their loyalty.
Customers today expect the retailers to ‘know them’. They do not want the same old communication from every brand asking them to buy their unique product at cheap prices. They want the brands to approach them with product recommendations based on their interests. They want to feel valued and cared for.
Here’s how retailers can ensure a personalized retail marketing experience for their customers:
- Create personalized ads based on products that the customer is searching for.
- Show product recommendations based on the products added to the shopping cart of a customer.
- Some brands also send handwritten notes to the customers and thank them for shopping with the brand.
- You can remember the little details of customers like what sizes they choose and make them as default for all products they search.
- Some retailers take personalization to the next level by allowing customers to create their own products. For instance, customers can create shampoo based on their hair care needs.
- Last, but not least, you can send targeted emails to the customers, giving them personalized benefits and rewards based on their actions like giving you positive feedback, recommending your brand on social media, buying your product, etc.
Personalization in retail marketing is not a choice but a necessity. If you want customers to stay loyal to your brand and come back again and again, you need to show them that you value them.
With that, let’s move on to the last section of this blog…
How to ensure a successful retail marketing strategy
Now, I would like to share some how-to’s that will help you create a fool-proof retail marketing strategy for your business.
Collect customer data
Data is the key to a successful retail marketing strategy. If you do not collect data related to your customers, their purchase history, buying patterns, search history, interests, demographics, and preferences, you will never know who your customers are and what they expect from a brand like yours.
You not only need to collect customer data but you also need to refine, organize, and segment customer data based on different criteria. For example, you need different marketing strategies for different types of customers such as new customers, customers who are inactive for a month, customers who are inactive for more than 90 days, customers who have recently interacted with your brand, and so on.
Understand your customers
Another crucial step in creating a successful retail marketing strategy is understanding your customers. You must know who your customers are, what is their age group, are they working professionals or home-makers, where are they located, what kind of products they like, what issues they face, what products they need, and so on. This will help you select products accordingly and implement effective marketing strategies.
For instance, if you are selling school supplies, you must know everything about school students, like what colors would appeal to them, what products would be useful for them, etc.
Be where your customers are
Now that you know who your customers are and what they need, it is time to reach out to them. And, for that, you need to be where your customers are. For example, connecting with teenagers is much easier through social media sites like Instagram, Facebook, or Snapchat. If you want to connect with working professionals or industry experts, LinkedIn or Twitter should be your choice.
If you are a local brand, make sure you refine your Google business listings and add all the relevant details about your brand. You can also aim at collecting as many customer reviews as you can so that your brand looks genuine in the local search.
Reach out at the right them with the right msg
This point, again, specifies personalization in retail marketing. Customers receive hundreds of emails and messages every day from brands. How can you stand out in those messages? By sending the right message, at the right time.
For instance, if a customer has just reached your brand. You cannot expect them to immediately buy something. Instead, you can send them an email introducing your brand (a great welcome message to make them a part of your family!). You can also show ads to them that highlight the unique features of your brand.
Similarly, if a customer has just made a purchase, instead of promoting the next product to them, ask for their review. This would seem more appropriate and relevant at that time.
Incorporating an omnichannel experience can help you achieve personalization in retail marketing. This way, no matter which channel the customer uses, they will receive synchronized communication.
Keep customers engaged
Last, but not least, the key to a successful retail marketing strategy is keeping your customers engaged with your brand. In other words, building your brand’s loyalty. There are many ways to do that but for the sake of time, I would mention a few.
- You must work on creating a connection with your customers through your content. Your content delivery should make the customer feel that you have something special for them.
- You must emerge as an authentic brand. For instance, you can share your brand’s stories with the customers, highlighting the different phases your business has gone through to reach here.
- Running a loyalty program would also do the trick for your retail business. This is because you will keep sending exciting offers and rewards that will keep your customers engaged with your brand.
It is time to switch to personalized retail marketing
Retail marketing has four important pillars - product, price, place, and promotion. Retailers must use these pillars to provide a personalized shopping experience to the customers. Every customer today expects personalized communications from brands that can be done by collecting customer data, understanding your customers, reaching out where your customers are, sending them the right message at the right time, and keeping them engaged with your brand.
