Anxiety tends to heighten for retailers during elections as people stop spending in the leadup to the ballot. But waiting for customers to get over the fear of the unknown will not pay rents or wages. It’s times like these retailers need to build a connection with consumers to survive downturns such as campaign-induced spending inertia.
Knowing what customers want is an obvious start. Australian retailer Bunnings cannot be matched when it comes to courting this country’s love affair with DIY.
The hardware giant has also topped the hit-list of Australia’s most visited online retailer for the quarter just passed, despite only announcing the launch of its online store midway through March with a progressive rollout scheduled to take 18 months.
Bunnings is so well connected to its customers, the lack of a complete online platform for purchase has not been an obstacle for consumers, but obviously there has been a build-up in demand.
The entry of another heavyweight to multi-channelling should not dissuade smaller retailers. In the 12 months to December last year, Australians spent $28.6 billion on online retail. Less than 40 per cent of that revenue was earned by the major players, compared to major retailers’ 69 per cent share of total retail sales, including online.
Smaller operators prepared to be nimble, creative and responsive to consumers’ needs and desires will improve their chances of getting noticed online. And video, estimated to make up about 80 per cent of all internet traffic, is regarded as one of the best ways to convert clicks to sales.
Video consumption during a customer’s shopping journey is increasingly being tracked as leading to better conversion rates. Video helps build trust and adds a human-to-human connection to the online experience, especially when built around showing how a product works.
Connecting with customers also means understanding them. Successful retailers such as Ikea understand that customers place value in something they have put some of their own effort into.
This desire to contribute to the creative process is also working for ready-to-make meals supplier YouFoodz, which balances consumers’ need for convenience with the desire to eat healthily and the enjoyment of cooking, and companies supplying the ingredients for customers to make curry in a hurry.
Retailers need to exercise caution about how closely they adopt customer feedback. The recent demise of high-profile start-up Shoes of Prey has been linked to the fact that the company’s market research, which showed that customers actively wanted to customise their shoes, had no correlation to how they would actually behave.
What people say, in terms of their intentions to buy and contribute to the creative process, is not always what they will do.