How smaller retailers can win market share and drive growth
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I’m always interested in the small business owners I meet across the world, many running generations-old businesses that offer one-of-a-kind treasures. These shop owners, with their time-honored craftsmanship, quickly win over even the most casual window shopper, effortlessly converting passersby into loyal customers.
Creating this sort of memorable customer experience is one of the keys to success for small retailers in the fashion and luxury goods sector.
However, as the worlds of fashion, luxury and media descend upon New York for Fashion Week, these experiences and transactions seem increasingly quaint and inconsequential; one could be forgiven for thinking that high fashion remains the exclusive preserve of global retailers and big-name luxury brands.
While that may once have been true, it’s no longer the case. Remarkably, more and more fashion retailers are starting to embrace being ‘small’ as a strategy for success and growth. Increasingly user-friendly technology tools are helping smaller retailers to speak and deliver to their niche customer sets across all channels with the same voice as they would in a shop in Hong Kong. So what is driving their success?
Tech-savvy
According to research from eMarketer, e-commerce growth is projected to double the retail industry average at least until 2017. Half of all shoppers discover new products when searching with smartphones, and 82 percent of smartphone owners look online for product information when shopping. Smartphones already account for over 40 percent of ecommerce transactions in Japan and South Korea, so it is no wonder that small retailers are realizing that they need to be as tech-savvy and flexible as their customers. That means engaging and delighting shoppers on mobiles, social media and online channels.
“According to research from eMarketer, e-commerce growth is projected to double the retail industry average at least until 2017.”
Highly personal
Technological advancements and the democratizing power of the Internet have allowed retailers to scale up without sacrificing intimacy and personal service. As customers no longer think about retailers’ brands in a silo, neither does the small retailer. They analyze insights from website visitor traffic, social media interactions, and newsletter click-through rates to better understand their customers. Any retailer with a Facebook page can now easily discover that their average customer is, for example, female, aged between 16 and 24, listens to Adele, and by using this data to precisely tailor their sales and marketing strategy, they can more effectively engage and delight their customers.
Cultivate and engage a community
It is much more profitable to sell to loyal customers than to constantly look for new ones. A Bain study showed that just a five percent growth in customer retention could boost profitability by 75 percent.
Small retailers are starting to use this insight to build loyal online communities, which do the selling for them. No wonder a brief Google search on the words ‘e-commerce’ and ‘social media’ turns out 101 million results, with articles such as ’12 Social Media Tactics to Drive Traffic to your E-commerce Site’ being the most visited. Another way is through loyalty programs, which 30 percent of independent retailers are planning to implement in 2016. This is on top of the quarter of independent retailers who already have a loyalty program in place.
Questions & Answers
Q.What is helping smaller retailers compete with larger global brands now?
What is helping smaller retailers compete with larger global brands now?
Increasingly user-friendly technology tools are enabling them to reach niche customer groups across all channels. This allows them to communicate with the same voice as they would in a physical shop, regardless of location.
Q.What is the expected growth for e-commerce compared to the overall retail industry?
What is the expected growth for e-commerce compared to the overall retail industry?
According to eMarketer research, e-commerce growth is projected to double the retail industry average. This trend is expected to continue at least until 2017, highlighting its significant expansion.
Q.How are smaller retailers using data to understand their customers better?
How are smaller retailers using data to understand their customers better?
They analyse insights from website visitor traffic, social media interactions, and newsletter click-through rates. This data helps them tailor sales and marketing strategies more effectively, understanding details like customer demographics and interests.
Q.What impact can improved customer retention have on a business's profitability?
What impact can improved customer retention have on a business's profitability?
A Bain study indicates that a five percent growth in customer retention could boost profitability by 75 percent. This highlights the financial benefits of cultivating loyal customers over constantly seeking new ones.
Reader pulse
Is embracing 'small' a viable growth strategy?
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