Play to your retail strengths

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Can smaller electrical retailers compete with industry giants and online stores?

Yes, if they play to their strengths says retail expert Corin Birchall of Kerching Retail.

Whilst pictures of crowded high street sales might give the impression that shops are enjoying a post-Christmas boom, there’s no doubt that 2012 will be a tough year for independent retailers, whichever market they operate in.

The electrical retail industry faces a particularly fierce challenge from the internet as online shopping gains momentum and many large retailers announced a spike in online shopping over the festive period. However, specialist household electrical appliance retailers are predicted to maintain a large share of the market – around 88% for 2011-2012 sales – and high street retailers do have a number of advantages over their online competitors.

Appeal to the senses

If electrical retailers want to maintain or grow their customer base they must add value to the retail experience. Price will always be a factor but unlike a tailored suit or a bouquet of flowers, rigorous manufacturing controls mean that most branded electrical products are identical whichever retailer you buy from. You are therefore not selling the product, but yourself. Whilst shopping for products such as white goods may seem to offer little potential for creating a sensory experience, the importance of emotional stimulation needs to be appreciated and understood. Many electrical retailers can legitimately be accused of demonstrating little imagination when showcasing products, by for example displaying them by price range instead of encouraging the customer to visualise a product in their own homes.  Visual merchandising, music, video, pictures and content are all powerful tools in bringing a product to life. 

One major advantage that the high street retailer has over the internet is the ability to offer a tangible experience: to touch and explore. As retailers such as Apple appreciate, products in cabinets are a retailing sin. Whilst retailers may cite the value of their products and argue that some gadgets are vulnerable to theft, there is no shortage of security products available today that can help address this issue. Recognising that touch is a crucial factor in a customer’s engagement with a product is fundamental in adding value and stimulating sales. Interestingly, psychologists suggest that when we touch items in a store, we start to own them in our minds.

Seeking knowledge

An electrical purchase is not like buying an item of clothing when the purchase is largely governed by personal taste. The customer is more likely to seek information and advice when buying electrical goods – which gives the specialist electrical retailer a significant advantage over supermarkets and online stores. When technology is involved, customers usually want to talk to people; to ask questions and to be informed. As a specialist in the field, an electrical retailer should position themselves as an expert, offering high levels of support and advice. Ensure that staff are well trained and have a good level of product knowledge – they are not just there to sell, but to inform. For example, a concession that I was involved in setting up employed ‘product specialists’ rather than sales people, changing the whole emphasis to sharing knowledge rather than closing the deal. Similarly,  Dixons fended off what was set to be an aggressive attack from Best Buy by significantly stepping up their customer service offering and developing a mega store model – combining PC World and Curry’s stores into enormous destination sites.

The customer journey

It’s also important to train staff   in more than just product knowledge: they need to appreciate the relevance of the customer journey and how questioning can help them understand their needs better. For example, is the customer establishing a need, gathering information, carrying out a comparison or nearing a decision? Knowing this will enable your staff to respond appropriately – but they will only know by asking relevant questions.

There are some areas where the smaller independent electrical retailers will struggle to match their competitors, so the key to success is identifying what you can do better – and making sure that you do. Look at how you attract, convert and retain your customers. Be objective and play to your strengths. You may not be able to compete on price or product range, but you can offer a first rate retail experience.

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