Retailers should take a strategic approach to going online and multichannel
Independent retailers can be very successful online, bit it helps if they properly consider where their strengths are for the online market
One of the classic modern day books on company strategy is by Johnson and Scholes. ‘Exploring Corporate Strategy’ sounds like it is intended for big companies, but it is just as relevant for single store retailers. Johnson and Scholes show how a sound company strategy is created from taking 3 main steps; 1. Strategy analysis. 2. Finding strategic choices. 3. Implementing a strategy. See insert for a description of these.
1. Strategy Analysis. In this first step you would look at the environment you are selling in. For example, what is happening in your market? What are the new trends? What are the outgoing trends? Who are your competitors and strengths do you have in your company to allow you to compete and do well in selling any of these latest trends?
2. Strategic Choices. Here a retailer creates a list of strategic choices and then finds the best fit for their business.
3. Strategy Implementation. This is about creating a simple plan to implement the strategy. If for example the strategy is to sell a specific range online, then the plan would show the main steps needed to do this with a rough timescale for each step.
This is the ‘classic’ Johnson & Scholes approach to creating a strategy for your business.
This looks at step 2; ‘Finding strategic choices’, by looking at different strategies for running an online retail business to supplement shop income. It will look at the pros and cons of each and will hopefully present some ideas for your own business.
Selling to local customers for convenience
In the last couple of years there has been a huge increase in online grocery shopping. It may seem strange that people buy online when the shop is not far away, but it’s just so convenient! This can work for other forms of retail including equestrian. Consider this specialist shop; Uniform4kids.com. They make it so much easier for busy parents to buy the right school clothing, particularly school branded items, even though the shop may not be far away. They have a very strong competitive proposition because they have products suited to their local market. It can be so much more convenient to buy in the comfort of a living room with a glass of wine of an evening.
To make this work the business has to inform existing and potential customers in the area that a website is there for customers to buy online. This can be done by local advertising and of course handouts to your shop customers. Put it on every receipt with maybe an incentive to tempt a visit to the website.
Extends opening hours. Increases convenience. You can also provide information on a website to tell a story about an item that is sometimes harder to do in a shop. The operation of running a shop meshes beautifully with an online one providing it’s thought through. Studies by AMR Research, DoubleClick and many others all support the fact that multichannel shoppers consistently spend 50 percent or more than a single channel shopper. It will develop a deeper customer relationships because multichannel customers are interacting with the business on different levels.
It can be tricky to evaluate the whether you will get the return from the investment made in putting the products online, especially when targeting a local market. The best way to minimize the risk here is to start with a couple of ranges, target a specific group of customers and evaluate the return.
Some of these ideas use examples from outside of the independent sector, this is done on purpose as it’s very healthy to see what businesses in similar sectors are doing.To be continued...
