I have opined on many occasions that retail is dead or dying (I may have also contributed personally to its slow decay). A recent study, however, from Blackhawk Engagement Solutions, an international incentives and engagement company, may offer a ray of hope to small retailers.
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The study, a compilation of two distinct studies, examines the means, the devices and the influences along millennials’ paths to purchase.
The first study was conducted in April 2015 and surveyed more than 500 millennials, focusing on specific shopping behaviours. The second study was conducted in October 2015 and included an additional 500 millennials and their mobile app and gift card preferences.
The results demonstrated that millennial shoppers are plugged into mobile and social shopping and are completely disrupting historically traditional shopping patterns.
“Millennials are leading a change in purchase trends,” said Rodney Mason, global vice president of marketing at Blackhawk Engagement Solutions.
“As such, it’s incredibly important for retailers and retail marketers to understand how to appeal to this demographic. Millennials are savvy shoppers and many have come of age in a post-recession era, and our our research shows that this group routinely comparison shops on mobile to get the best value and shopping experience. The market, however, has not yet capitalised on those habits.”
Retail entrepreneurs can certainly learn from the key findings the study, which can provide guidance as they examine and refine their strategies this holiday.
1. Smartphones are a primary means to connect to the Internet
No surprise, but smartphones are a dominant method of connection to the web for millennials, with 89 percent of them using the devices to connect, vs. 75 percent who use laptops, 45 percent tablets and 37 percent desktop computers.
Retailers therefore need to have a mobile first strategy if they want to stay relevant with this generation.
2. Social media is number one for shopping information
Without a doubt, millennials are connected to social media. More important, they are using it as their primary source to find and hear about products, special deals and shopping news.
The study also found that the traditional methods of advertising, television (six) and print media (seven), both fall behind other digital advertising methods. Retailers need to at the very least integrate digital media with their traditional advertising strategy – if not replace it altogether.
3. Millennials are sensitive to price
When it comes to price sensitivity, 95 percent of respondents said they have more or the same sensitivity to price as last year. Additionally, price has the greatest influence on millennials’ purchase decisions above all other factors, including quality, brand, store and availability.
This is surprising because a growing economy or shopper segment typically leads to less sensitivity to price, but millennials clearly are bucking that trend. More than likely, this is due to the simple fact that they have the ability instantly to price compare and save on almost anything they buy.
4. Google and Amazon are favourites for comparing prices on smartphones
Amazon (46 percent) and Google (43 percent) dominate millennials’ preference for price comparison activities.
Love it or hate it, the reality is that millennials (and more so older generations) are using mobile devices to price compare and save, even while in your store or on your website.
To compete, retailers need either to offer competitive pricing or more value than consumers can get on Amazon, Google or other large retail outlets.
5. Millennials prefer higher-value rebates over instant discounts across shopping categories
For categories including electronics, entertainment, sporting goods, clothing, wireless plans and even groceries, the majority of millennials indicated they would choose a higher-value rebate offer over an instant discount.
What this means is that retailers can offer rebates that provide more savings (and greater value) than simply cutting and matching a price or offering an instant discount.
When retailers figure in the value of unredeemed rebates, it could ultimately wash out any price cut. Retailers should tread with extreme caution, however, and assure that any rebate program is not difficult to redeem or deceptive, which could end up harming your brand long term.
6. Millennials will consider “Buy Online, Pickup In Store” as an incentive
An impressive 88 percent of millennials say they would consider buying online and picking up in store to save R100 on a R500 item.
For retailers who ship, offering a discount to pick up in store not only creates perceived value but also saves shipping and handling cost and drives traffic to the store.
7. Gift cards are believed to be safest for online shopping
Millennials are sensitive to cyber security issues and identity fraud, and 64 percent of millennials believe that gift cards are safer to use online than any other digital payment method.
Moreover, 66 percent believe gift cards limit identity fraud. By offering gift cards or alternative payment options, such as Paypal, retailers can attract sensitive buyers who are looking for alternatives to Amazon.
8. Millennials embrace loyalty programmes
While millennials are much less likely to be loyal to a brand, 69 percent belong to a retail loyalty program, and 70 percent of those are happy with their programmes.
While the preferences of millennials are changing, requiring entrepreneurs to examine brand loyalty in an entirely new way, retailers can still drive return sales by creating a transparent and value-added loyalty programme.
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These shopping habits probably are not news for most big retailers, but for smaller retailers who struggle to compete and stay relevant in today’s digital landscape, attracting millennials may be as easy – and as affordable – as understanding and adapting to the non-traditional shopping habits of this growing market of millennials shoppers.
This article was originally posted here on Entrepreneur.com.
Why Creating Value For Your Customer Beats Giving Price Discounts
Customers want value for money. It’s time to rethink your pricing strategy (without losing your margins).
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Businesses that can prove and deliver the greatest value can ask their price.
Pricing strategy may be low on the priority list, but complaints about competitors’ low prices get a lot of attention. It’s time to rethink your pricing strategy and rules.
For most of us, pricing is a cost-plus system, the calculated cost of an item is marked up by a percentage to get the selling price, which may then be discounted to match competitive prices. This method assumes that your cost is the lowest it could be, which is rarely true. It is likely you could drive down costs by smarter purchasing or more efficient manufacturing.
The second wrong assumption is that the mark-up percentage is correct; it is more likely to be a long-ago rounded off thumb suck of what you need to run the business, and out of date in this economy. Crucially, cost plus pricing ignores the value that a customer gains when buying the product.
Research shows that customers increasingly seek value for money and will even pay a premium for value. This is especially true of young people, but all classes of buyers, from giant corporates to very poor individuals, seek value over price. Many tenders are not awarded to the lowest bidder but to the supplier best able to deliver. Very poor people buy expensive branded food because they are trusted.
Companies hesitate to switch suppliers only for price, particularly where delivery and quality are vital. With all this evidence that value is important, it’s time to rethink your pricing.
Ask your customers what factors are important when choosing suppliers. Price will always be one factor, but focus on the others. Your goal is to become the supplier that best matches all their needs. In many cases, you may even be able to increase your price. Bottled water sells for anything from R5 to R50 a bottle, simply based on the buyer’s perception of the health and other values of that brand. You can get a website and brand identity for less than R10 000 or more than R1 million — neither are the wrong price, it depends what the buyer needs. Get all the information you can and don’t rely on your own or your sales team’s perception of customer needs.
What happens if you cannot make money at the price the customers see value in the item? Start a harsh examination of your buying or manufacturing efficiencies. At the same time re-examine the margin calculation — lean businesses need less margin than lazy ones. If you still cannot make or buy it economically, consider changing your pricing strategy.
Convenience pricing is offering a bundle of goods and services for a single price or monthly fee. The customer can easily assess affordability and decide if this offers value. Cell phone suppliers and motor dealers adopt this pricing method. You buy a car for a single monthly fee including the car, warranty, maintenance plan, roadside assist, financing and other items. Both customer and seller are satisfied.
Value-based pricing sees the price determined by the value of the product or service to the individual buyer. The most skilled value-based pricing experts are the street hawkers who are quick to assess the value a student, a businesswoman or a tourist may put on an item. Public speakers have different prices for different audiences like large businesses, start-ups and NGOs — I use this method.
Incentive-based pricing is widely used in the IT and construction industries. It works on the basis that the price is variable and depends on the performance of the supplier. An IT project may have a nominal price but bonuses are paid for early completion, being below budget or developing more than the requirements. Conversely, not meeting deadlines, delivering late, poor quality or incomplete systems will reduce the price eventually paid. Consider if your business can use one of these highly effective pricing strategies.
What Is Customer Intimacy And How Do You Use It?
If you think that maintaining a close relationship with customers is not as important as selling your products, you are wrong.
Knowing your customers well is a major part of being a successful marketing company. When companies do not connect with their customers, this is when they lose loyalty, revenue and positive customer sentiments. And in today’s world of hyper-connectivity and improved brand interactions, not being connected to your consumers can damage your brand in the long run.
If you think that maintaining a close relationship with customers is not as important as selling your products, you are wrong.Customer intimacy should be a top priority for any company who wants to maintain their success.
But, what exactly is customer intimacy?
Simply put, it is a business strategy that is based on paying close attention to the needs of your customers and ensuring that these needs are met and prioritised at all points of their journey with your company. It often involves close contact with customers using a variety of different channels and techniques. You need them to know that you care about their needs and understand what they are asking for.
You could think of it as segmenting your audience and creating specific offerings to precisely match their needs. If you want to excel at using customer intimacy, you will need to combine your in-depth knowledge of your customer with the ability to be flexible in your operations. This way, you can respond to any customer needs as quickly as possible, maintaining the high standards they have come to expect from your brand.
How do I use it?
Now that you understand what customer intimacy is, you are ready to delve deeper and figure out how to use it. There are some simple tips that you can use to implement customer intimacy in your current marketing strategy. Outlined below are just some of these effective methods.
Always prioritise your customers
This is the first step to any successful customer intimacy strategy. Prioritising your customers means that you need to set up operational processes which are “customer first” in their thinking. You will need to start by listening to customers and analysing their concerns. Only once you understand these concerns, will you be able to provide solutions.
It is important to look into processes that prioritise these concerns rather than react negatively to them. An example of this is avoiding looking at how many calls your client service team takes in a day but rather looking at the goals that they achieve when answering customer queries. Have they answered the customer’s question? Is there a resolution in sight for the problem? These are a more important metric to look at than how many calls are answered in a day.
Try to resolve problems
In order to become more customer-intimate, you should strive to solve the problems that arise rather than discourage people from coming to you with issues. And your brand should make customers feel as though they can share their grievances, either by contacting you directly or by writing a review on your social media page.
Statistics show that customers share a bad experience twice as often than they do a positive one, which could be highly detrimental to your company. So, when your customers do take the time to contact your business with either a positive or negative review, you have to have steps in place to resolve these problems. Use these complaints to improve your processes and your customer service section, so that the next time someone contacts you, it will be with compliments and not complaints.
Set goals that your entire company must follow
One of the most effective ways to become a customer-centric company is to set common goals that all of your employees must follow. For example, one goal could be to answer customer questions within 24 hours with a solution that is realistic and achievable. Or you could aim to improve your project turn-around time by gathering information from clients at every stage of their journey.
Whatever goals you set for your business, you will need to ensure that every employee adheres to them. Leaders need to set an example for their staff so that the customers, ultimately, reap the benefits. But be sure that your goals are attainable. You cannot expect your employees to reach the unreachable, as this will negatively impact the level of customer service you can provide consumers. Look at the data that is coming in from customer calls and interactions and use this to come up with goals that you can reach.
The customer is always right
We often use this saying in a joking or derivative way, but it is truer than you might think, especially for marketing companies. In today’s world, the consumer wants brands to focus on them. In fact, if a brand ignores even the smallest form of contact with a customer, there could be an issue. And this is why you need to become a customer-intimate brand.
You need to prioritise the needs of the customer at every touchpoint in their journey with your brand, solve any problems that might arise and ensure that everyone is on the same page in your company. Soon you will see that your customers are singing your praises to everyone they meet.
How To Use Sales Skills To Build Your Business
If you want to build your business up, read on below for how to use sales skills to do so.
Building your business from the ground up is no easy feat. You might feel overwhelmed by all the ways and methods that are available to you but there is one way that can help your efforts immensely, and that is by using sales skills. Sales skills might not seem like they are applicable to building a business, but what is a business without sale people?
You could look into a sales accelerator for business development course to improve your selling skills. Sales training courses can be useful, as they will teach you about sales techniques and sales strategy, which you can apply to other aspects of your business. So, if you want to build your business up, read on below for how to use sales skills to do so.
Listen to existing customers
An effective way to improve your business offerings is to listen to your existing customers. Listening is actually more complex than it seems, and it means that you have to do a lot less talking. This will help you to truly hear your customers and take stock of what they are saying.
Listening to existing customers is one of the best sales and marketing strategies you can use to improve your business. This is especially true if you have built a relationship and rapport with your current customer base, as this will encourage them to give you insights into any issues they might be facing. Whether you are a small business or a large company, listening to customers is always helpful.
Try to solve a problem
Solving a problem is a marketing plan that is effective and sure to work in building your business. And a great salesperson knows that solving the problem of a potential customer is a sure-fire way to improving the conversion rate of their business.
You will need to do some research into the problems that your target market faces and then focus on how your products or services can be used to solve these problems. This ties into the first step of listening, not only to your existing clients but to potential ones too. Listen to what people are saying and learn to read what is being said. This way, you will be able to ascertain the problems your customers are facing and you can come up with solutions to fix them.
Use word of mouth
Existing customers can be a huge help to your business, in that they can provide you with positive referrals to use to boost your client base. If a customer is happy with the services or products you have provided them with, you can ask them for the name and contact details of other business owners who might benefit from your help.
You can also ask for positive testimonials from customers that you can place on your business site and social media platforms. You should always ask permission before using testimonials, and be sure that they are factual, true and relevant to your brand. Referrals and testimonials are common sales tactics that can be applied to boosting a small business or improving the reputation of an established company. And while nobody enjoys receiving negative reviews, it is important that you use these reviews to learn from your mistakes and improve your customer experiences.
Sell your vision
Building your business might involve reaching out to investors to help with monetary issues, and this is where your sales skills will really need to shine. This is because you are not only selling your business, but you are selling your vision of your business as well.
You will need to give specific details as to how your offerings will help customers to solve problems and answer questions. And you will need to sell a successful vision to your investors of how you want your business to success. Show them that your employees will be happy with how well they are taken care of and that customers will live a better life by using your services or product.
Exceed customer expectations
When a salesperson goes over and above what the customer expects, it is likely that the customer will become a return customer. And this is what you want for your business, right? So you should look into ways in which you can meet and exceed customer expectations.
One of the benefits of always exceeding expectations is that you will no longer have to rely on the “hard sell” to encourage people to use your business. Word-of-mouth will travel about your excellent customer service, which will sell your business for you. If your brand is passionate about providing customers with the best possible service, you will be selling your business and improving it all at once.