The path to smart specialist retail

The continued digitalisation of trade poses new challenges above all for smaller and medium-sized enterprises. In particular, owner-managed specialist retailers without a strong buying association behind them are reflecting on what they can do to fight against the depth of product range, availability of items and the product prices of the booming online retail sector.

Core competencies of specialist retail

A study by the Sociological Research Institute (SOFI) at the University of Göttingen identifies opportunities for brick-and-mortar retailers in spite of the increasing pressures of digitalisation. First and foremost, they recommend a strengthening of the classic competencies of specialist retail, these being personal customer communication and advice – i.e. the “ability to sell”.

It is really important in this respect that front-line retail staff receive further training in a systematic way. On the one hand, sales assistants need to have specialist knowledge about the product range, in order to always be better informed than the customer. On the other hand, they need to keep a constant eye on the world of pricing and reviews that exists on online platforms. This helps them to have a justifiable line of argument when explaining price differences to purchasers.

Decisions with the help of big data

Nevertheless, the digitalisation of retail is in full swing and it is also creating opportunities for smaller and medium-sized specialist retailers. They do not always, however, see the need to make space for it in the budget. Specialist retailers rarely make the most of the possibilities offered by the analysis of in-store customer behaviour in the way that shopping precincts or specialised markets do by incorporating Wi-Fi data into their decision-making processes. 

One of the next big hypes in retail is sure to be individual pricing. This method doesn't just provide online shoppers with an individual price based on the data gathered about them, it also allows brick-and-mortar retailers to identify customers from their smartphones and offer them special discounts on particular items as they stand in front of the shelves.
Digitalisation can also enhance a personal consultation with the customer at the point of sale (POS). The sales assistant can use a tablet to supplement the range of goods in the store by the available stock levels and to provide information about order and delivery times.

Data management creates customer knowledge

If retailers work with an individual online concept, a digitalised POS makes it possible for them to collect data about potential customers significantly quicker than by using handwritten notes in the customer card. Retailers can use voucher promotions to create incentives and prompt potential customers. In doing so, they build up a database that illustrates purchase histories or identifies regular customers. It makes sense when doing this to keep it limited to meaningful data. Simply collecting data is not enough and neither is it in line with the data minimisation required by the GDPR. It is even more important that retailers link their findings back into business operations, in order to adjust their offering and their services to customer interests. Contact details can also be used for targeted campaigns, specially tailored offers or special in-store events. New products or season lines can be celebrated with a select group of customers after normal opening hours. 

Information flow for customer loyalty

Two methods of communication present themselves: social media channels and carefully measured doses of newsletters providing customers with value-added info. The same rule applies here: less is more. It is better to send info or special offers less frequently than to flood the already overloaded customer with too many.
These online activities must not be reserved to the owner or an internet-savvy trainee. The processes need to be just as natural to all employees as the daily opening of the store or the updating of your own homepage. Customers also expect a quick reply to their email enquiries, within a few hours rather than a few days. Slow response times and irrelevant information are simply two things that customers no longer have the patience for today.

About the author

Thomas Tjiang is business and local journalist and communication consultant. Since the start of the  1990s,  he  has  worked  for  all  types  of  media,  such  as  daily  and  monthly press, the radio, TV, news agencies and on-line editorial offices. The freelance expert for literature and communication science has lived in Nuremberg for 30 years. 

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