Surprisingly enough, this wasn’t due to a downturn in the American economy. In fact, consumer behavior still resulted in overall economic growth last year. This doesn’t seem to match up with the thousands of businesses, including incredibly popular retail chains such as Forever 21, filing for bankruptcy.
It wasn’t that people weren’t buying anymore. It was that people were changing the way they were buying. People were buying online more.
The retail apocalypse has a lot more to do with where we shop than if we shop. Who’s the big elephant in the room? E-commerce.
That’s right: Online stores have changed everything for brick-and-mortar businesses.
Online sales have increased dramatically within the past decade, so much so that brick-and-mortar businesses struggle to keep up, and are often forced to close their storefronts. Think about it this way: Every time you order groceries from Amazon Prime Pantry, your local grocery store loses a sale, and some of these grocery stores are already going bankrupt.
This year, it’s estimated that 2.05 billion people will be online shoppers. That’s about 26% of the world population, or every 1 in 4 people you come across. Clearly, online shopping is changing the way we conduct business and live our lives. This number keeps rising.
So, what do you do if you have a retail storefront? More importantly, what if you don’t have an online marketplace? As the old saying goes, if you can’t beat ’em, join ’em. In this article, I’ll dive into everything you need to know to survive the retail apocalypse.
With some extra knowledge, a willingness to adapt, and passion for staying connected to the modern-day consumer, you’re sure to thrive even in an ever-changing environment.
How Did The Retail Apocalypse Happen?
One of the main reasons we learn history or social studies is to educate ourselves on the mistakes of our past. Therefore, it’s important to look at what went wrong and created a retail apocalypse, before implementing a new strategy.
Here are a couple of possible reasons why brick-and-mortar businesses may facing their death:
Private Equity Funding and Bankruptcy
Brick-and-mortar stores that are already struggling, turn to private investors to avoid bankruptcy. While this can sometimes be useful, (take the successful Dunkin Donuts re-branding by the Carlyle Group, for example) it can also be dangerous.
Any business indebted to lenders is likely to have a difficult time keeping up with lender and interest rates simultaneously. Especially if the business was already struggling, private equity funding can easily run a business to the ground if it’s not financially balanced.
For some businesses, filing for bankruptcy can be a lot simpler than paying off debt in full in the end.
Too Many Storefronts
The growth of the American mall was faster than the growth of the U.S population from 1970 and 2015. If you have too many idle storefronts, the cost to keep them all operating will outweigh your overall generated income. Makes sense, right?
Overall Growth of Online Shopping
No one could have predicted the dot.com boom of 2000, but it’s no secret that the growth of mobile app shopping has increased steadily over the years.
While there are many factors that play into the retail apocalypse, these above factors are some of the main ones to take into careful consideration.
What Does The Retail Apocalypse Mean For The Future?
The retail apocalypse has had some serious consequences for businesses and consumers alike. Here are a few reasons businesses must adapt to the e-commerce market not just for profits, but for the overall well-being of their company:
The Future of Retail Workers
As a result of the retail apocalypse, 1.3 million retail workers have lost their jobs within the last 10 years, according to Business Insider.
Less In-Person Interaction With Consumers
Consumer and customer satisfaction are the bread and butter of any successful, long-lasting business. Less successful storefronts mean less time to communicate your brand on a more personal level.
The Fall of a Beloved Brand
Toys-R-Us, Forever 21 and Barney’s New York are just a few of the casualties from the retail apocalypse. The fall of these companies isn’t just a significant loss financially, but also a loss for consumers. Failure to innovate lets down your loyal customer base regardless of whether or not they shop online. Your failure to save your storefronts is you letting down the customers that prefer to shop in-person.
Succeeding in the Modern Age
You may be wondering what you can do about the downfall of physical retail locations. As said by Steve Jobs, “Innovation is the only way to win”. While some businesses may maintain a profitable consumer base from storefronts alone, the vast majority need an e-commerce space to succeed.
A lot of it comes down to visibility. Think of it this way: Is a customer more likely to find a store through Google that has an online shop and a storefront or just a storefront alone? Your online inventory acts as an advertisement for your business itself.
Plus, every online product listing can be search-engine optimized so you’ll appear higher in search results. Consider your first instincts when you shop: Do you ever look online for inspiration? Comparatively shop brands from your phone?
E-commerce development can also help you with inventory issues. More storefronts mean you have to have inventory in-person without knowing whether or not it will be purchased. Online stores allow you to see the profit before shipping the product. Plus, you’ll naturally gain insight into customer data, which in turn, can benefit your physical locations.
Understanding Changing Consumer Behavior
Consumer behavior has evolved rapidly over the years. According to Invesp, United States shoppers spend the most online per person globally. The USA alone is a huge market paving the industry’s large embrace of e-commerce and online shopping.
You may be wondering why there has been such a shift to online shopping. It boils down to a couple of simple reasons that I like to call the three Cs: Convenience, Cost, and Comparison.
The first one, convenience, is probably the most obvious. Why would you drive out to a sporting good’s store if you can get what you need delivered straight to your door from Amazon within 2 days? Amazon has certainly mastered convenience, which is partly why they are dominating the industry today. In fact, 47% of American shoppers purchased their first online item through Amazon.
Cost is changing as well. Online shopping lowers overhead for companies, which means they can lower the cost. The online marketplace also brings forth new cost possibilities. Since businesses don’t have to buy more inventory until an item is purchased in bulk, they are able to keep prices online low. They also don’t have to pay expensive rent for their storefronts.
Online shoppers can also easily compare products and brands by reading user reviews of a bunch of similar products, before buying. A whopping 97% of online shoppers say that customer reviews play a major role in their buying decisions.
Listening to Your Consumers
Without consumers, there would be no business. Even if you’re hesitant to adopt an online marketplace, do so out of respect for your customers. You know they’ll appreciate it if you have an online shopping option for them, rather than strictly storefronts, right? Think of how many times you’ve opted to shop online. What would make your customer base act differently?
In another sense, online shops offer immediate, non-intimidating customer feedback. It’s likely customers will leave reviews on your individual products giving you valuable information that would be difficult to gain elsewhere.
Moreover, just because you have an online store doesn’t mean you can’t have a classic in-person storefront. If nothing else, use your engagement statistics to track down your most popular products. Then, stock your retail storefronts with the most commonly purchased products online.
I’ve learned from experience that excellent online customer service is just as important as in-person communication. What are you doing to make sure your customer has an easy time buying and returning?
What sizes or product models are you constantly running out of? Can you stock more of the item to avoid the same mistakes in the future? Without a doubt, your online shop will become your goldmine of vital consumer information.
Setting Yourself Apart From The Competition
Let’s say you already have your retail store and online e-commerce store. This is a great accomplishment, but unfortunately, it’s more or less a base standard in today’s marketplace. You’re going to have to find other ways to set yourself apart from the competition, and become a winner in this competitive space.
Think of it as a job interview with your customer as your prospective employer. All the other applicants also have an online and physical shop, so what can you do to stand out? Any unique characteristics or strategies are much more likely to get you hired, or in your case, produce a sale.
In a lot of ways, your consumer is your employer. They dictate what you sell, how much of it, and your overall marketing strategy. So, what can you do to appeal to them directly?
One thriving chocolate company, Hotel Chocolat, has been able to maintain its business by expanding to an online shop while encouraging customers to come shop in stores. Impressively, more than 2/3rds of the company’s sales come from in-person transactions at their brick-and-mortar store. In other words, they are one of the rare companies to have survived the retail apocalypse.
The business is able to thrive based on its embrace of innovations: Hotel Chocolat is constantly developing new flavors, and experiences to bring their customers into the stores. For example, their chocolate masterclass is widely popular.
To boost a brick-and-mortar storefront, you have to think about what a storefront can offer that online shopping can’t.
How Can You Get More Sales?
Sales allow your business to thrive. So, what can you do right now to boost sales? Here are a couple of simple strategies for boosting your sales in today’s saturated marketplace:
- Great Customer Service
Regardless of whether or not you’ve created an online shop for your business, it’s extremely important that you offer great customer service. After all, satisfied customers are much more likely to talk about your business and bring in organic sales through word-of-mouth referrals.
- Think like a Consumer
To boost your sales, think of every time you’ve made a purchase for yourself. What were the deciding factors to go with one product over another? Did online shopping or reviews play a role in your buying decision? What about marketing?
- Offer Something Valuable that Solves a Problem
To some degree, a product or service should speak for itself. How can you improve your product to be more valuable for your target audience? Or, what services can offer at in-person locations to drive up storefront sales? Do your products solve problems for consumers?
- Use Online Data to your Advantage
Don’t forget: An online marketplace is an endless source of consumer data. What products are selling and which aren’t? I’ve found that using your online shop’s analytics can be extremely useful for coming up with an effective marketing campaign.
Everyone is on their smartphone every day, scrolling through social media platforms and using social media to online shop. I’ve learned from experience that social media visibility is essential to driving sales. According to a 2019 study by Buffer, 73% of businesses agree that social media has grown their business.
Moreover, more and more social platforms are embracing tools for you to drive direct traffic to your business. For example, Instagram users with a verified number of followers are able to embed links in their Instagram story for buying a product or going to an external e-commerce site to buy something. You can also shop directly through Facebook or other platforms with their integrated business tools.
Outside of sales, social media is great for getting the word out about your retail store location, if you’re also trying to survive the retail apocalypse. You can use your outlets to easily advertise and share fun, free events, for example.
Some businesses use crafty hashtags and incentivize their customer base to share them on their personal accounts in exchange for free or discounted services. You may be wondering why a business would give up a product for a measly Instagram post, but over time, it makes a lot of sense. Instagram posts from verified buyers are extremely valuable sources of advertising.
The more your brand is talked about, the more likely it is to build up customer credibility and bring in new customers. Social media spreads like wildfire, so there’s a strong possibility that a friend of the original customer will see their post. As a result, they’re so much more likely to consider buying your product or service.
Website User Experience
So, you finally have an e-commerce website, but now what? Data shows that you should focus on making your website’s interface as user-friendly as possible. In fact, Kissmetrics reports that a whopping 47% of consumers expect a page to load in two seconds or less.
Consider optimizing your images and text for a more effective, faster website. While you don’t want to sacrifice style, you also don’t want to sacrifice speed, either. It may be worth hiring a professional website designer or engineer for proper consultation.
Don’t forget that websites appear differently on phones and tablets then they do on a desktop computer. Figuring out how to optimize your e-commerce site for mobile can notably set you apart from other retail competitors who forgot about that crucial step.
Also, you may want to learn copywriting or hire a freelancer to update your website product descriptions. Not only is this a valuable skill you’ll use in the future, but it will also make your business easier to find online.
Having an e-commerce website is good, but having a polished one is much better.
Can You Survive The Retail Apocalypse?
I know what many of you are thinking. What if you’re simply not interested in giving up your brick-and-mortar business? Is it even possible to survive the retail apocalypse with today’s conditions? Or will your storefront ultimately close its doors?
In the end, it all boils down to how much effort you’re willing to put back into your business. Your brick-and-mortar store could survive if you improve neighborhood awareness and improve your team’s sales skills. Great businesses are also built off of supportive communities.
However, you might want to at least consider having an online store as well as your brick-and-mortar store. Your online shop doesn’t have to be your main place of business, but it could give you valuable insight regarding how to cater to your in-person clients.
Whether you have both an online store and a storefront, or only one or the other, you’ll need to improve your sales skills and fight for the survival of your business.
On your online store, you should advertise that you also have a brick-and-mortar store, since online shoppers in the area might be attracted to the fact that they have the option to see, touch, and feel your products in person. You could stand out by having both a brick-and-mortar store and an online store, mixed with awesome brand marketing for both.
To survive the retail apocalypse you’ll have to fight hard for your business, but it’s not impossible. An e-commerce presence and a great sales team of closers does make survival easier, though.
The Art of Closing
Learning how to properly close a sale is probably one of the best ways to protect your business from the retail apocalypse. The art of closing is all about adapting to your consumer’s needs and embracing innovation. As said by Albert Einstein, “If you always do what you always did, you will always get what you always got.”
Great closers know how to adjust their sales pitch to their specific customer pain points. What does that mean exactly? It means that your product may be useful to one person in a completely different way than it is for another person. The best way to sell is to listen more, and talk less. Ask questions and find out what your prospect actually needs.
For example, imagine that you’re selling a type of body lotion. One of your customers uses it because they find the scent calming, and another uses it to help sooth their eczema. The way you market and help these consumers reach a close is entirely different.
Over time, I’ve realized that taking personal customer emotions and problems into consideration is extremely important. After all, that is what drives a sale: A consumer’s problem that needs fixing.
The retail apocalypse is largely unavoidable at this point, and many businesses are doomed. But that doesn’t mean that your business is doomed. As long as you embrace innovation, continue communicating with your consumers in the right language, and work on your sales skills, you have a shot at surviving the retail apocalypse
If you want to improve your team’s sales skills or your own in order to survive the retail apocalypse and keep your storefront from closing its doors, watch my FREE training video on sales and High-Ticket Closing.