Challenges and Best Practices for Specialty Retailers

By: Marcy Chickering, Client Marketing Director, Valassis and Dave Cesaro, Director, Client Marketing, Valassis
Published Thursday, Mar 30, 2017



Challenges and Best Practices for Specialty Retailers

Heading into spring and summer of 2017, the digital age sets a challenging stage for specialty retailers. As consumers increasingly turn to online shopping, showrooming and webrooming, specialty retailers must use this same technology to their advantage. Just think about it. When you shop in-store, you most likely have your mobile phone in hand, ready to aid in your research. That’s if you start your search in-store. Many shoppers start their search at home on their laptop, tablet or mobile phone.

Top Challenges:

Retailer Rationalization

The average number of retailers shopped has declined substantially from 12.4 in 2007 to 9.4 in 2016 based on Kantar Retail data. On the flip-side, the good news is that 2016 year-end numbers indicate that things have stabilized. That said, retailers need to fight harder than ever to stay top of mind with consumers constantly on the hunt for the best deals and promotions.

Kantar-retail-Average-Number-of-Retailers

Online Shopping/the Amazon Effect

Online shopping will continue to increase dramatically. If you don’t have an omni-channel strategy you need one -- quickly -- to survive. With 55 percent of all shoppers now digitally enabled according to Kantar Retail, the need for engagement touches all specialty retail segments from pet supplies; to sporting goods; to soft goods. There are very few items that cannot be bought online today and consumers are paying attention and changing their ingrained shopping habits very quickly. In fact, 2016 saw a 5 percent increase from a year ago among the most digitally engaged.

Kantar-Retail-Shoppers 

Showrooming and Webrooming

According to techopedia, showrooming is when consumers go to a store to look at a product, sometimes to touch, feel and see it in person, then go online to buy it for a lower price. Dr. Gary Edwards, chief customer officer at Empathica, defines webrooming as the opposite of showrooming -- consumers research products online, then go to a brick and mortar location to buy. And many are taking these actions, as Harris Poll reports 69 percent of consumers showroom and 46 percent webroom.

So what does this mean? Retailer loyalty is waning and consumers are becoming more sophisticated due to the availability and ease of gathering information and comparison shopping for the best deal and product. As one analyst recently put it at the National Retail Federation Conference, “If you want loyalty, get a dog.”

OK, we’ve seen how consumers are using technology to their advantage. Now let’s flip things around and talk about how specialty retailers can use technology to their advantage.

Best Practices:

Mining Data

Data is the key to the castle. When trying to determine the richest target consumers, syndicated data can get you part of the way there, but a retailer’s own data is definitely the gold standard. A lot of marketing divisions struggle with how to mine and use data most efficiently. When it’s done right, ROI will spike upwards.

Frequency of Touch Points

According to Google’s ZMOT (Zero Moment of Truth) study, a consumer engages with 18.2 pieces of information on average before making a final purchase decision. It may sound like a lot, but when you consider how many pieces of information come our way every day, it’s only a fraction of our messaging exposure. Frequency is extremely important but the key is actually connected touch points.

Connected Touch Points

You’ve probably heard the term “multiple touch points” but consumers are craving personalization derived from “connected touch points.” Connected touch points refers to an advertiser having the ability to determine you are the same person whether you’re shopping from your mobile phone, tablet or desktop. This is the next evolution of digital advertising and consists of integrating promotions so the same household that receives a personalized email, also receives a print promotion and mobile message. Connecting with the consumer with a succinct message across their path to purchase is critical.

Best-in-class Retailers Are:

  • Using their data to segment and find their most loyal customers, as well as to identify potential customers who act like -- not just look like -- their best customers;
  • Staying top-of-mind with consumers throughout the year so their brand is part of the consumer decision set; and
  • Integrating their media so the consumer is receiving the same message regardless of delivery vehicle.

Are you a best in class retailer?