fbpx
HomeOPINIONPrice wars are not the answer to competing with international retailers

Price wars are not the answer to competing with international retailers

Recently, large chain retailers such as Tiffany & Co, Zara and Chanel have announced their impending expansion into New Zealand. It seems this international presence in our industry is showing no signs of slowing, placing smaller NZ retailers under pressure to find new ways to compete.

Often with increased competition comes fierce price wars. And while these tactics can be effective in luring in certain customers, they can’t always sustain long-term retail success. Slashing prices can not only eat up your margins, they can also encourage consumers to only shop with you if you’re having a sale. 

In order to truly win over customers, retailers must go beyond competing on price or products, and step up their game around customer service and experience. When you’re up against other stores who are selling the same products (sometimes for less), you need to connect with shoppers in unique and memorable ways.

As part of Vend’s Retail Success Webinar series, we spoke to industry expert Erin Harris from Innovative Retail Technologies on how retailers can compete through experience rather than price. Here are some of her key tips:

Invest in your workforce

Employees play a huge role in executing your customer service strategy, so make sure everyone in your team is well-trained and armed with the tools that’ll help them serve shoppers better.

“These days, there’s nothing worse than when a customer knows more than the associates on any given thing about your store or brand,” says Erin Harris, Editor-in-Chief of Innovative Retail Technologies. “That’s why retailers really need to invest in training, as well as in scheduling and management, to ensure that friendly and knowledgeable associates are available in the right place and at the right time.”

MIT professor Zeynep Ton conducted an in-depth study on the operations of various retailers and discovered that US companies such as Trader Joe’s, Costco and QuikTrip which invest significantly more in their employees, “have high profits, low prices for their industry, excellent operational metrics, and a reputation for great customer service.”

While it may seem that cutting back on workforce expenses is saving you money, this move can actually do more harm than good. Keeping your store organised and serving customers requires effort and skill, so don’t skimp on investing in your staff. 

Design exceptional shopping experiences

According to Harris, retailers who want to stand out from their competitors must figure out a way to give consumers something they can’t find anywhere else. And no, this isn’t just about selling unique products, it’s about offering shoppers exceptional retail experiences.

One example of a retailer doing this well is Alton Lane, a premium tailored apparel store that sells custom suits for men in the US. “Alton Lane leverages technology in a variety of innovative and margin-moving ways, but they’ve also added a lot of extras that make them a customer service standout. For instance, their locations have big leather sofas, a stocked bar, and even flat screen TVs so customers can catch the game,” adds Harris.

At Alton Lane, a gentleman can make a private appointment at one of their locations, where the retailer will digitally capture his measurements and include it in his file. That customer’s information can then be accessed anytime he wants to shop the brand, so whether he’s shopping in the Chicago location or in the Boston branch, his information will be there. The same goes for when he’s purchasing online.

“They’ve turned shopping into an inviting experience,” says Harris. “Alton Lane knows that most men don’t particularly enjoy shopping, so they designed this home run of a customer experience that makes buying clothes convenient—even enjoyable—for their target shoppers.”

Invest in technology and link it with the basics of retailing

“Technology can and will ease countless operational burdens,” says Harris. She adds that retailers should definitely invest in tools and solutions that’ll help their business. “I’m not talking about blue sky innovation. This is about technologies that are affordable, easy to implement, and are in line with where your customers are, or where they want to be.”

For example, Auckland fashion store and Vend customer Glamour Boutique has created a clever way to use technology for an amazing customer experience – they provide a FaceTime service for customers. With computers set-up in their store, their staff can chat with customers outside of Auckland face-to-face, show them the latest arrivals, and give them a special and personalised shopping experience. 

Set a deadline then take action

As Harris puts it, “‘some’ is not a number, and ‘soon’ is not a time.” Your need to be more concrete about your goals and what you need to do to achieve them. Prioritise your initiatives, set a realistic timeline, and take action. Whether you’re looking to empower your workforce or making improvements to your brick-and-mortar store, you have to focus on what needs to be done, set a date, and just go for it.

Rate This Article:
Author

Francesca Nicasio is a retail expert and blogger for Vend, an iPad-based point-of-sale software that helps merchants manage and grow their business. This article was republished from Vend's retail blog, where Vend talks about trends, tips, and other cool things that can help stores increase sales and serve customers better.