Running a brick-mortar store is a difficult thing in itself, and if as a business you are not taking it seriously, the outcome won’t be welcoming.
Sales plays an important role in the success of the retail stores. The moment retailers find out that their sales are decreasing due to certain things, they act immediately to figure out the reason. Sales can be going down due to various reasons, finding that reason is the most trickiest part. Brick and mortar stores can thrive in this omnichannel purchasing environment, as long as they avoid certain mistakes.
As a retailer there can only be two major objectives for you viz., Get people into your store & then get them to buy something. And if this has to happen, one needs to avoid certain things as researched:
- Over/Underpricing Products
Price optimization is one of the key factors in every business operation as it can raise prices while improving sales volumes at the same time. The pricing managers will implement it and focus on building their business to gather the most profitable customer.
Although product price matters to a purchaser, but it’s important to the seller as well. It takes a combination of favorable market trends, product quality, consumer liking, and product differentiation along with correct pricing to generate sales, which leads to the success of a product.
Retailers who are mismanaging the pricing , struggle to be competitive in the market. A price change in a price-sensitive product can reduce sales. Therefore, measuring a product’s price elasticity is an important factor, as it will help you to determine how sensitive the demand is to any price changes. By testing pricing strategies, you can maximize sales and margins at the highest price consumers are willing to pay.
Some products are unique and retailer puts a high price. Although the uniqueness of the product does not guarantee a high profit. If the customer doesn’t like the product it will not go well in the market. If the price of a product is set too high, it doesn’t matter whether the product is unique or if the consumers like it, they won’t buy it. The price has to be right to cover the large area of the market.
Thus, you need to understand that, overpricing of product directly decline your sales and underpricing indirectly decline your sales as well as it also damages the business in other areas.
So, the price of the product needs to be set right.
- Poor Communication
Effective communication at every business is crucial for success, particularly in sales. Poor communication will turn potential customers away from your products. Existing clients may lose faith in your business. The key to boost your sales and customer base is to improve all areas related to communication that is causing sales to decline. Poor verbal communication such as using unclear words, speaking too loudly or too slowly. The company should train them to maintain eye contact, enunciate, express enthusiasm and smile. An employee should repeat the main parts, of what he is told during a sales conversation and can help with a beneficial or problem-solving product or service.
Many employees fail to ask customers questions to establish if the product is beneficial. They also fail at the end of the sales pitch, to ask the customer to take the offered product.
It’s important to have a smooth relationship between marketing and merchandising teams to make well informed strategic decisions to maximize sales performance. Retailers should be aware of this and take care that no one will make this mistake as it can directly affect sales.
- Ignoring Competition
One of the biggest mistakes a retailer can do is to ignore the competition. To find out the reason for the decline in sales is to analyze the competitor data regarding pricing and discount behaviours.
If you’re a low-cost retailer, you want to ensure your price is always lower, you can monitor your competitor’s pricing strategies in real-time. This can ensure that you’re maximizing your margins while staying competitively priced.
You can also ensure the right quantity by benchmarking against your competition. This allows you to find gaps between product strategies. You can learn from the top-selling brands for each product category across the competition.
If your sales are declining, diving deeper into competitors’ data can help uncover useful insights. The underlying issue of your declining sales can be due to a new marketing campaign or a better price. Most reasons mentioned above can be avoided by considering competitive intelligence.
Your competitor might have just launched a new product with great features that top all current competitors, yet you had no idea this was happening.
You need to know how your competitor moves at all times so that you can take immediate action and develop strategies that can keep your business competitive in the marketplace. Ignoring this can affect your business in the future.
- Absent on Social Media and Online Platforms
Social media and online platforms have not only become a part of vocabulary but also a platform to interact to buy and sell. Technologies are integrated into our daily lives-both personal and business as well. People are connecting on social media platforms. Like connecting with friends and family on Facebook, Instagram, etc. and connecting with people on the business level on Linkedin. Many retailers know how to take advantage of online presence but still are confused about, what having an engaging online presence is all about.
Customer’s habits are changing dramatically and is being influenced digitally which is on a constant basis. For instance, a consumer is going for shopping but before going he is going to check the reviews of the particular store.
Here you can see in the example that the retailer is having advantage and through this advantage he attracts the customers. The advantages include reviews, testimonials, blog post and the other details that are hard to showcase in the store.
The key to driving reach is finding the right content for your audience. Use a social media management tool to monitor the engagement with your posts. Track which posts are performing well and which ones aren’t.
The best thing about social media is that it’s available to businesses of all shapes and sizes across industries. But for some, incorporating social media into marketing strategies is a bit more complicated—especially those in regulated industries like healthcare, financial institutions, and government.
- Neglecting Customer Service
Giving customer service often means being a good corporate citizen and refraining from controversial comments, just 23% of respondents said they would continue to purchase products from companies no matter what actions it takes.
This is the biggest cause of retail failure that we observed.
Some retailers think that customers are there for their convenience, not the other way around. We have seen retail businesses fail because they were located in inconvenient locations and because they didn’t accommodate their business hours to customer needs. For instance, a store opens on the location where companies are everywhere and the timings are 10 a.m to 4 p.m. The store is closed during business hours and the owner doesn’t know that he is not reaching the potential customers.
We have seen also in some retail stores that employees are not treating consumers in a good manner and not conveying their store’s policies and discount structure. The solution to this is to train their employees and yourself-on the basis of customer courtesy and providing service.
Although avoiding these major mistakes doesn’t guarantee success, though it brings closer to not to bring failure near you. There are so many risks in today’s marketplace, one should take care of these mistakes. This is not rocket science, so don’t panic and analyze your store and start applying solution step-by-step.
If you are still confused and want to improve your decision making, Vedalabs is there for you. As Vedalabs, provides you the solution, with the help of Artificial Intelligence and the other IoT technologies presents you the data that reflects the total footfall count, repeat customer count and demographical overview which will eventually help the retailer in various ways like store optimization, personalized promotions that will allow them to gain maximum customer satisfaction and also to be ready for the change in trends in the market and help them in making them efficient strategies
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