USA Today recently published an article titled 10 retailers take two-thirds of your money. The story highlights the revenue distribution among the Top 100 retailers in the S&P 1500. It was startling to see that such a small number of retail powerhouses take in such a large percentage of consumers’ income. It’s no surprise that Walmart tops the list, and it was interesting to see that CVS, Costco, Kroger and Amazon rounded out the Top 5 spots on the list respectively.
But what do statistics like these mean to retailers not on the USA Today list? For one, the statistics indicate that smaller retailers have less room for error. It says that to remain competitive they must be even more diligent than the Top 10 about how they run their business to capture their fair share . . . and maybe even an unfair share.
The retail business is fairly straightforward: Increase revenue, control costs, ensure customers are satisfied. Sounds simple, but accomplishing those goals is complicated. The way you go about collecting, analyzing and acting upon important data represents the key to success in the retail world. But don’t try to boil the ocean. Simplify and focus on these three areas first:
- Understand your customers. Who are they? What do they like and dislike? Where and how do they shop? Where do they want their products delivered? Answering these questions allows you to better meet your customers’ needs and ensure they become repeat customers. It also can help you acquire new customers.
- Know your merchandise. What sold well last year or last season? What do you anticipate is going to sell well in the coming season? What products should you remove or add? When should you take markdowns to make room for the new season’s merchandise? These are the questions you need to answer to make the best use of your inventory investment and to make sure you have the merchandise when and where it’s needed.
- Ensure satisfaction. What satisfaction means to me may be different than what it means to you. Satisfaction isn’t just about the “path-to-purchase.” It’s also about developing an ongoing relationship with customers so they become your brand advocates. Fully employing all the weapons in your marketing arsenal is critical if you intend to play in the same league as the Top 10.
Once you’ve got customers, merchandise and customer satisfaction nailed, everything else will fall into place. Smaller retailers won’t ever be able to sit back and rest on their laurels, but once in a while – with the right strategy and tools in play – they might be able to take an unfair share of pie away from the Top 10.
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