Articles

The Five Keys To Specialty Retail Survival.

Time to face facts. We are in the early stages of a massive step change in retail. The red ink and the blood of fallen retail heroes is only just beginning. The source of all the pain is not change itself because this is not new to retail, but the speed of change that now confronts us is.

Many retailers have simply run out of time and have no choice but to abandon outdated thinking and outdated ways of doing business to rapidly embrace re-birth or perish. The keys to success for contemporary specialty retail lie in five principles.

All specialty retail must embrace the need to:
1. Globalise
2. Evangelise
3. Humanise
4. Capitalise
5. Contemporise.

1. Globalise
Shoppers are shopping the world (thanks primarily to cheap travel and online) and international brands are targeting our market. If your products and services, your customer experience and your customer value proposition are not world class standard as a minimum, you will see continued sales and margin decline.

2. Evangelise
The shopper pool is finite and disposable income is polarizing. The Pareto Principle is real – 20 per cent of your customers will generate 80 per cent or more of your profit. Concentrate on them and build a customer experience that excites them and they will do your promotion for you. Ignore them or bland out your appeal in the vain attempt to attract volume and you will fail.

3. Humanise
Shoppers have never been more appreciative of genuine, immersive human connection. Real retail is not an automated game and information technology does not rule it. People crave human engagement – as evidence just try to get a table at a popular café on a Saturday morning. Great technology has the power to be hidden, seamlessly integrated and enriching of an experience without dominating it. Human connection and engagement ‘is.was.always.’ (to borrow from a poorly performing retailer) will be the source of power that will sustain specialty retail.

4. Capitalise
High performance specialty retail contrives to drive margin dollar and basket dollar profit inflation – not deflation. The best retailers in the world understand the concept of price integrity, creating magnetism and training customers to buy more, more often and at full price. As stated before, the pool of shoppers is fixed. It is the same group of people who shop you – month after month – and the only way to increase profits is to increase the profit dollars you extract from each and every customer over the lifetime of the relationship you have with them.

5. Contemporise
Great retails have a powerful self-belief and customer value proposition that drives everything they are. But they also understand that context changes and that being successful yesterday does not guarantee you will be successful today or tomorrow. Staying true to who you are but also staying relevant to your customers every day is critical to success.

While the going will get tough for some, the retail landscape will cleanse itself of the over-proliferation of me-too grey to reveal a new era of brightly colored richness. Great physical, immersive, engaging retail experiences that thrive on connecting to human beings on a multi-sensory, deeply emotional level are emerging already.

In combination with the forced revolution in distribution, physical retail – and specialty retail in particular – will go through a renaissance. Fully comprehend the five keys and apply them and you’ll be one of the retailers who enjoy the spoils that flow from customer delight.