Customers’ needs and preferences are constantly evolving, especially in retail, so businesses must evolve with them. With this in mind, Adam Joy, CEO of the Australian Lottery and Newsagents' Association, explains why physical retail remains a viable business model.
Businesses that anticipate what their customers will need, and innovate to meet those needs before the customer finds another business that gives them what they want, have a higher chance of success.
Take, for example, the industry that I operate in: newsagents. We represent over 4,000 newsagencies across Australia, and there is a clear distinction between newsagencies that are highly profitable and those that struggling or only maintaining the same revenue.
Successful newsagencies act as a community concierge and find out what their particular area needs, and then meet or exceed those needs.
Newsagencies that fail to try new things and are afraid to change are left exposed to the many challenges that threaten their businesses, such as declining print sales, rising costs in traditional product categories and online retail.
The great news is that there are shining examples of bricks-and-mortar SMEs that are not afraid to change and try new things – and these businesses are far from dying. That’s right – bricks-and-mortar stores are not dead, even in the face of online retail.
If you own a face-to-face store or service, here are ways you can do to remain profitable and grow:
Diversify or update your offering
Newsagents who have adopted the community concierge mentality have tailored their offering to their community. Having a concierge mentality means you either have many of the items and services that someone needs, or you know where and how they can get it.
For some newsagents, this has meant changing their habitual retailing of the traditional categories and techniques and diversifying into gifts, collectibles, mobile phone sales and repair, in-and-outbound parcels, dry cleaning, cafes, book stores, ink specialists, money remitters, print fulfilment centres, coordinated stationery, tourism and plush.
Newsagents are also capitalising on syndicated cost models to deliver multiple services from the one retail outlet by combining a newsagency with either an independent supermarket, post office, pharmacy or tobacconist.
For your business, diversifying your offering or creating a strategic alliance with a complimentary service might be the way to increase profits.
Or perhaps what suits your demographic more is to narrow your service offering right down to be a niche specialist. For example, some newsagents are now niche magazine title specialists, and this is working well for them as it addresses their customer’s needs.
Adapt to new methods of delivery
One thing that the rise of online shopping teaches us is the importance of convenience, particularly for stores in business districts.
One newsagent whose customers particularly do not have time to wait in line has incorporated an app that allows customers to make their purchases online and then simply collect them at the designated pick-up time. They now have very loyal customers and a steady income stream as a result of adapting to their customers’ needs.
By removing roadblocks to people easily doing business with you, you have more reasons to encourage sales.
Create a memorable experience
Customers need to be given a good reason to go in-store and friendly customer service is no longer enough – customers must be given something that they cannot experience online. This is where retail theatre plays an important role in creating an emotional connection with their consumers.
An example of this is one of our newsagents setting up a slow cooker with a delicious-smelling stew in-store, fresh vegetables on display, and providing free samples to taste. This was all to promote a slow cooker-themed magazine that was on sale. It’s no surprise that the magazine sold out quickly and he also had the opportunity to engage with customers at the same time.
Another example of a memorable experience is a newsagent that hosted an evening of wine and cheese at their store on the night of the 2016-2017 federal budget, with a finance expert talking about what the budget means for the community.
Your business can thrive
Thinking outside the square to give your customers what they need in the most convenient way, while making their experience memorable (for the right reasons), is critical in today’s competitive market.
Get this right, and your business can confound expectations and thrive.
Adam Joy is the chief executive officer of the Australian Lottery and Newsagents’ Association (ALNA) and a member of the Australian Institute of Company Directors.