August 2019

5 Ways Brands Can Thrive in the New Retail Environment

5 minute read

Savvy retail brands are succeeding by meeting shoppers' preferences. Here's how to survive and thrive in the new retail environment.

It's hard to avoid the headlines predicting the demise of brick and mortar stores. In fact, 2018 saw the closure of some high-profile retailers across Canada, such as Nine West, which shuttered its five remaining Toronto-area stores that year, and Jean Machine, a denim retailer with locations across Ontario.

But savvy retailers know that the “end" of physical retail has been greatly exaggerated. While some fading brands have left the market, others are succeeding by meeting shoppers' evolving needs. In fact, 30 new brands—from large retailers such as Nordstrom Rack and Kenneth Cole, to small and medium ones like Smartwool and Lemongrass House—entered Canada in 2018, proving the market is viable for retailers of all sizes.1

Here are some ways retail brands of all sizes can survive and thrive in the new retail environment.

1. Provide shopping options for a better customer experience.

A study by the Retail Council of Canada (RCC) and RCC's Marketing Advisory Council found that Canadian consumers prefer a blend of online and offline experiences.2 In fact, 61% of shoppers report conducting at least one online activity, such as comparing product prices or advertising flyers, prior to an in-store purchase. Conversely, 65% of shoppers did at least one offline activity, such as browsing products and comparing prices in-store, prior to an online purchase.

Small- and medium-sized retailers can focus on enhancing their website channel along with their physical presence to offer a symbiotic omni-channel experience that can boost sales for both clicks and bricks.

2. Build goodwill with experiences.

While ROI will always be a crucial metric, the new buzzword is “ROX"—return on experience. And while that includes the experience consumers have with any touchpoints along the way, offering actual experiences can boost consumer interest and goodwill.

In several of the flagship locations of the upscale outdoor outfitter Canada Goose, including in Toronto, Alberta, and Banff, shoppers can try on goods in “cold rooms," which mimic Arctic conditions.4

Small- and medium-sized retailers can adapt this strategy by offering experiences of their own whether it's a shoe store that offers complimentary pedicures to a dress boutique with fun, Instagram-worthy backgrounds for social media posting.

3. Train your salespeople to offer white-glove service.

Nearly 80% of customers say that personalized service from an associate is an important factor in determining where they will shop, finds retail management consulting firm BRP.5 Even more importantly, 67% of shoppers say that a good customer service experience will encourage them to stay longer and/or spend more money, finds the International Council of Shopping Centers (ICSC).6

Montreal-based Browns Shoes attributes its recent growth to better customer experiences, which includes extensive training for associates, as well as an option to order any shoe from Browns inventory online with free shipping.7

Retailers can boost their in-store sales acumen by offering training to the team at all levels—from managers to associates—to provide a next-level experience that will keep shoppers coming back.

4. Employ cutting-edge technology.

While mapping apps are an important tool to help shoppers find their favourite mall stores, Ontario-based Cadillac Fairview, which operates 68 properties in Canada, is taking such technology to the next level. Its innovative CF Ravel digital platform leverages connected technologies and artificial intelligence to offer consumers suggestions about products and stores that might interest them, while making the mall easier to navigate.8

For example, if backpacks topped a customer's back-to-school shopping list, the app could show the stores that carried them, bringing shoppers to your door. Small- and medium-sized retailers within those malls can take advantage of this technology to get "on the map" and have their goods front and center for shoppers.

Another example, American Express® offers a merchant map to showcase nearby locations where the card is accepted at retailers of all sizes. Incorporating the latest technology can help customers better find what they are looking for, increasing sales and goodwill.

5. Make payments seamless.

Offering a wide variety of payment options satisfies both consumers and small businesses. Nearly half of consumers prefer using credit cards over other forms of payments, including debit cards and cash.9 On the other side, a report from Payments Canada finds that 67% and 61% of small businesses would move away from cheques and cash, respectively, if they had other options. Even more notable is the 81% who say they are willing to integrate new technologies into their operations10.

While shopping has fundamentally changed in the recent past, consumers still crave the experience of finding just the right goods. By melding the omni-channel model of bricks-and-clicks and adapting some techniques of larger retailers, small- and medium-sized businesses can meet customers wherever, whenever and however they choose to shop.