We live in an “always on” world, where we can do our banking at midnight, the weekly shop in the park from our smartphone and pick a new outfit from our office desk. Retail has changed profoundly – we have called time on fixed opening hours, traditional marketing and cumbersome delivery methods.
Patience is in short supply in this new world; more than ever, customers’ time is a precious commodity. In fact, standing in a queue is almost unthinkable for many millennials. As well as being somewhat impatient, millennial shoppers are often more discerning than other generations. They are more passionate about factors like the carbon footprint of their purchases and the importance of supporting local industry, and so they tend to favour independent and local retailers.
Many worry that these retailers will struggle to match the e-commerce sophistication of titans like Amazon, putting them at a disadvantage. Thankfully, independent and boutique shops can take advantage of their nimble structures to thrive in this new retail landscape. Below are three areas that they can concentrate on to gain a competitive advantage.
The sudden growth of e-commerce has caused havoc for many mid-sized retailers, as those that had invested significantly in IT infrastructures could not deal with sharply increasing volumes, and so their systems became obsolete far earlier than originally projected. Independent retailers that remained nimble avoided this fate, and they should continue to do so.
Smaller retailers should outsource their IT structures where possible and look for cloud-based solutions that minimise up-front investment. E-commerce is evolving at a frantic rate, but independent retailers can embrace this change by reducing reliance on legacy infrastructure and using technology that integrates easily into their existing APIs.
In the social media age, marketing has gone full circle. Consumers now desire a personal interaction when shopping and dealing with brands, similar to the traditional relationships with corner shops and sole traders. This means millennials interact with brands in a way that is more similar to their grandparents’ generation than that of their parents’. As international corporations scramble and invest considerable money to replicate SMEs’ way of doing business, independent retailers can simply extend their normal customer interactions to digital channels.
Brands should use their social channels to respond in real-time to local events, and can do so without the red tape or sign-off process that many bigger companies require. They should review social analytics and target followers geographically close to their enterprise who are likely to buy their products, as well as those with an interest in their sector that command influence.
The announcement of Amazon Prime Now is a reminder, if this was needed, that the old model of queuing for purchases on retailers’ terms is finished. This might be intimidating for smaller retailers but it doesn’t have to be. By outsourcing sensibly, retailers can compete with international sellers despite working on a smaller scale, while concentrating on their unique offering that appeals to customers.
Omnichannel retail is growing in importance, and it won’t be long until it isreferred to simply as “retail”. Led by digital natives, customers are demanding the ultimate convenience in purchase and delivery, while still seeking quirky and independent products not offered by many high street retailers. Boutique retailers should embrace this new way of doing business by staying nimble, investing in cost-efficient digital solutions, and outsourcing functions where possible. This allows them to concentrate on their core offering. The future is bright for retail innovation, and smaller, braver enterprises who outsource strategically will continue to be at the heart of this.
Patrick Gallagher, CEO of CitySprint