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.
Know Your Value As A Business
Do you have a unique selling point?
Developing your unique selling point and value as a business often become the cornerstone of your competitive advantage and growth strategy.
Your competitive advantage is that what makes your business different from the rest. It is so important that Jack Welch, past chairman and CEO of General Electric said:
“If you don’t have competitive advantage, don’t compete.”
There are two types of competitive advantages:
- Cost advantage
- Differentiation advantage.
Cost advantage means you provide reasonable value at a lower price. This is achieved by continuous improvement of operational efficiencies and using economies of scale. The low-cost strategy requires a close watch on profit margins and monitoring your competition for price changes.
Your competitive advantage may be easier and more effectively achieved for long-term success, by differentiation. A business with a differentiation strategy can charge better prices with higher profit margins.
Related: Here’s How To Value Your Business
How to achieve value through a unique selling point in your business:
- Bend over backwards: Go out of your way to impress and assist your customers. Focus on their needs, making their experience a pleasant one.
- Be the best: Provide a unique or high-quality product or service.
- Be innovative and bold: Meet your customers’ needs in a new way. Strive to be the first to offer new products or services to attract them and keep them coming back.
- Specialise, specialise, specialise: Instead of aiming to meet the needs of an entire market, rather specialise in one aspect. Establish yourself as an expert in your field and carve out your own growth path for a niche market.
“Don’t try to be all things to all people. Concentrate on selling something unique that you know there is a need for, offer competitive pricing and good customer service.” – This is the advice of Lilian Vernon, a U.S. businesswoman whose company was the first women-found company to trade on the American Stock Exchange.
Don’t Promise Service Excellence If You Can’t Deliver It
In a world characterised by fierce competition for market share, the quality of the services an organisation provides is often its only differentiating factor. The truth is, while most organisations preach service excellence, few deliver it.
While companies that sell sought-after brands may well be able to get away with poorer-quality service, the services industry relies on service excellence to create a good impression and ensure repeat business.
A word-of-mouth industry
It’s accepted that the service industry operates largely via word of mouth. While competing organisations may offer similar services on paper, it’s how they deliver them that makes all the difference. When clients receive excellent service, they will refer the business to others.
Organisations must, however, ensure that if they punt their service as a differentiating factor, they need validation from their clients i.e. Do they offer the personal touch; do they build strong relationships with key players in the organisation; are they strategic partners; and is their service better than anyone else’s?
Service excellence needs to be a top-driven value
Organisations are often quick to point out that client facing staff must provide excellent service. The reality is service excellence should start at the top of the organisation and be a clearly defined value for every employee, from the CEO to the office cleaner. This will ensure it informs all the activities and interactions of employees at every level.
Recruit the right attitude
It’s often said ‘employ for attitude’ because you can develop the skill. While some organisations may need a minimum professional qualification, employing for attitude is an important consideration.
Employees should take pride in their work and be passionate about their careers. A high performing team lives, breathes, eats and sleeps service excellence. It’s second nature for them to go the extra mile to ensure their clients’ satisfaction.
Induction is not a quick fix
How new employees are inducted sets the tone for how they will perform in the long run and informs the quality of the services they will deliver to clients. The concept of service excellence is different from organisation to organisation. It’s critical that new employees understand and buy into the various nuances of what defines service excellence in their new roles.
In our organisation, induction is not a one-day session in the boardroom. It includes an initial induction process combined with ongoing coaching on how to translate every action and activity into service excellence. We want our people to understand and align themselves with exactly what we mean by service excellence.
Train for high performance
How employees are trained is critical to the quality of service they deliver. If we accept the premise that service excellence differs from one organisation to the next, it’s self-evident that someone who was employed as an attorney at one consultancy will not automatically understand how the same role will need to be fulfilled — from a service excellence perspective — at another consultancy.
This is where ongoing training comes into play. It needs to constantly evolve. This allows service excellence to become deeply entrenched in employees’ everyday working lives and ensures you develop high-performing teams.
Employees need to feel valued
Happy employees translate into happy clients. Happy employees are not necessarily people who are never reprimanded or don’t experience stress. They work long hours and go out of their way to deliver on massive projects because they buy into what the organisation stands for and feel valued, recognised and well remunerated.
Only when employers treat their staff well, remunerate them fairly and invest in their development, can they expect the highest quality of service from them.
Leaders need to have the right discussions with their people. These should not only be about targets and how much money needs to be made. They should also centre around service excellence. Good leaders explore topics with their employees and check in with them to see if they are still aligned with the organisation’s values.
Internal service levels are as important as external ones
The quality of services that employees provide internally, is directly correlated to the service they will provide to clients externally. The way they view service within the business sets the tone for how they view service excellence at large.
Get support structures right
Organisations need to ensure their internal structures, processes, procedures and policies support service excellence.
Sometimes a procedure or process can create a bottleneck, which obstructs employees’ efforts to deliver excellent service and disappoints clients. Continually re-evaluate your internal structures to ensure seamless service delivery.
Know thy client
This is the first commandment of service excellence. Many organisations say they provide superior service, but do they understand their clients’ businesses? Do they take a personal interest in the people they interact with? Do they get their views on how they perceive service excellence?
Following up with clients is paramount. Are their expectations being met? Do they have unrealistic expectations? Are some employees delivering and others not? Are there issues that need to be addressed? Is the company over-promising and under-delivering?
These can only be determined if you are close to your clients and communicate with them regularly.
Commit to agreed deliverables
Time is money. Our technology-driven economy means clients expect superior service, delivered within quicker timeframes. To meet clients’ expectations, turnaround times need to be agreed on and met.
It’s critical that all employees deliver a standardised level of service. If only one or two people deliver service excellence, a perception of service excellence can be shattered.
When deadlines won’t be complied with, communication is key. The reality is that sometimes service expectations cannot be met. Your client should not have to chase you for an explanation of why something has not been delivered. It’s up to you to keep them informed.
Don’t sell what can’t be delivered
Often the sales process sabotages service excellence. When there is no congruence between what sales people promise and what employees can deliver, there is a very real danger of not being able to meet clients’ expectations. Ensure your sales people are equipped to sell your offerings and have in-depth knowledge of what you can or can’t do.
Respond to clients’ complaints
The way service providers deal with clients’ complaints differentiates top performing businesses. Clients need to know their complaints are taken seriously and dealt with at the highest level. Communication is key and the more information you glean, the easier it is to solve the problem.
Consistency is key
The services companies deliver to their clients should be reliable, consistent and underpinned by integrity. By building strong relationships with clients, and understanding their needs, service providers can position themselves as invaluable strategic partners.
Ultimately, consistency of excellent service delivery builds trust and trust keeps clients coming back for more and strengthens brands.
Five Ways To Stay In Control Of Selling Your Business
Even when you are ready to sell your own business, you need to maximise your benefit by keeping control of the sale process.
Each and every one of the many hundreds of business owners that I have engaged with over the years has always identified immediately with one key business strategy – the need to have control. After all, they became entrepreneurs to have control over their own business and business ideas, to control their cash flow and the growth of their business.
Yet, curiously, they often apply a different set of standards when the moment comes to sell that business. They do not seem to realise how quickly and how dangerously they can lose control.
The all-too-common scenario is that one day, out of the blue, a business owner is contacted by a “would-be” acquirer who is interested in buying the business. It is probably only in hindsight that they would pinpoint this as the moment when entertaining the approach meant that they lost control of the sale process.
From that moment, the potential acquirer will define the hoops through which the seller must jump before a serious offer is put on the table. The acquirer insists, for example, on full due diligence before a detailed offer is submitted. This leaves the business owner feeling overly exposed for an extended period of time.
But worse is often to come. Eventually, at the eleventh hour, the potential acquirer puts a ridiculous offer forward, based on all the “risks” they believe they identified in the due diligence.
The acquirer conveniently concentrates on the negative. They forget about the embedded value and future growth potential that the seller’s business will offer.
Or sometimes, they complete their due diligence and walk away. That leaves a baffled business owner watching them drive away from the premises – and left with nothing to show for the process but raised blood pressure and the haunting question, “WHAT happened there?”
These are unpleasant truths indeed – but ones that you can avoid. Such scenarios underline why keeping control is critical when selling your business.
This control is not about taking ego and arrogance. It is about taking an approach that is calculated and structured. That way you will drive the process on your terms and according to your agenda. And that critically will mean that you will be able to protect your confidential information along the way so you are not left feeling exposed at the end of the process.
Whether you are approached to sell your business or are proactively going to market to find an acquirer of strategic partner, always protect yourself with these five key tips:
1. Always have a plan
Your plan should encompass: the timeline, the terms and the rules of engagement between the acquirer and yourself moving forward. By putting your plan into place, you take and keep control of the process.
2. Interrogate the acquirer
Make sure that as early as possible in the process, you understand these factors driving the potential acquirer:
- What is motivating their interest in buying your business?
- Have they bought a business before?
- How would they value your business?
- How would they fund the acquisition?
If your potential acquirer has bought a business before, insist on speaking to the business owners who sold to them so you can find out about their experience of working with the company to complete the sale.
Ensure that a potential acquirer gives you a valuation formula upfront so that you can be sure you are both batting in the same ballpark. If you are able to speak with a previous seller, find out how the deal was valued and structured in that instance.
If your potential acquirer has to raise funding, insist on speaking direct to the funder to make sure they are fully committed – and that their valuation methodologies are aligned with what the acquirer is telling you. If there is a mismatch, it is the funder’s valuation that ultimately counts so you may need to engage with the funder.
3. Secure your offer before due diligence
Always make sure that your potential acquirer puts forward a non-binding offer before commencing with due diligence. Doing this will give you comfort that the acquirer is serious. It will also identify for you where the acquirer sees value in your business and what risks they perceive – and what risks there might be for you.
4. Ensure due-diligence terms are agreed
Always make sure that the terms of the due-diligence process are defined and reconcile back to the offer. Due diligence is another point in the process that confirms where your potential acquirer sees the value of your business and identifies risks. Commercial reality and practicality must drive the sale process so make sure you are not manoeuvred into being bogged down in the due-diligence list, which often consists of hundreds of requirements.
5. Always have a timeline
Your time is valuable so make sure that both you and your potential acquirer realise and respect that. Protect yourself with a timeline – you should define the milestones and deadlines of the sale process for your acquirer.
These five strategies will ensure that you retain control of the sale process, just as you have controlled your business development. That will mean that it is less gruelling for you and that you can be confident about selling on terms that you will look back to happily.
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