WHAT YOU SHOULD BE STOCKING THIS CHRISTMAS

Henrynativity

Christmas comes but once a year, so target customers with what they want and capture your share of that lucrative seasonal peak in sales, advises Gekko managing director Daniel Todaro

It’s Christmas and there’s nothing that gets people more excited than the gift of technology.

We Brits rack up a staggering £11 billion on credit cards to fund the ‘perfect’ Christmas and we start early. More than a quarter (27 per cent) of shoppers begin their gift shopping in the three months before the big day and 48 per cent just one month before. So it’s time to start your Christmas ranging.

In this world of plenty, deciding what to stock can be a difficult decision for a retailer, so keep it relevant to what your consumers either need or desire. To do this, it’s essential to be in tune with your customer base and the latest trends. What was selling five years ago may not be relevant today.

A good place to start is a category that’s most definitely relevant – the smart home. Listen to your peers and follow the advice of the ERT Turning Point summit participants: “All it takes is a small bit of space to introduce the smart home to your store – even just a metre square is enough to bring a whole new category to your customers”.

The smart home is a great opportunity for retailers looking to widen their customer base. With the smart-home market expected to be worth £53.4 billion by 2022 – an annual increase of 14.5 per cent – it has been assisted hugely by sales of ‘smart’ speakers from brands such as Google and Amazon.

Google has integrated its Google Assistant into products from other brands, such as Sony, Panasonic and JBL, increasing reach and popularity. Amazon Echo and Alexa is also being integrated into speakers and soundbars from Yamaha and other smart-home devices, such as thermostats from Hive.

Further proof as to why you don’t want to miss out on the action is the fact that 42 per cent of these smart speaker ‘early adopters’ have gone on to buy a second device. The message is clear. The smart home is here to be expanded in your range plans and with smart speaker products available from £49, ranging needn’t be an expensive investment.

Justified

The decision to range smart speakers can be justified by the fact that demographics indicate some users have never bought actual physical music. When you consider that 52 per cent of all music streamed is by the 16 to 24 age group, it’s clear to see why the wireless speaker market is set to increase 21 per cent in 2017 – equating to 55 million units shipped globally.

A study from Nielsen affirms that connected technology is the highest use of media devices among 18 to 24-year-olds, and this age group uses connected tech five times more than those aged 50+ age. That will not only grow, but also change to include older age groups very rapidly, as the smart home becomes a mainstay for all.

Music on the go is another growth sector opportunity, with headphones set to increase four per cent to 368m global unit sales this year. Premium audio brands are increasingly moving towards wireless technology, meeting the needs and expectations of younger generations. As consumers favour the wireless approach to music and media on the go, retailers need to be able to match this trend and also consider compatibility for iOS or Android devices – not all headphone products will work on every device.

The smart TV category continues to grow and is, of course, relevant to retailers in the run-up to Christmas. In the EU, smart TVs account for 57 per cent of all TVs sold, which surprised me.

It does, however, demonstrate that there is a continuing market for smart TVs and, more importantly, an opportunity to upgrade customers.

With UK shoppers spending in the region of £474 (£305 EU average) on around eight people this Christmas, the need to meet the magic £59 price point in your ranging is essential to capture the 73 per cent of sales achieved in retail for at least one gift.

Giving shoppers this experience on the shopfloor is what can set independent retailers apart from multiple and online retailers.

Off course, an omni-channel approach should not be ignored and where you can’t physically display products because of space restrictions, implement a system that enables online ordering and 24-hour click and collect from your store.

And remember, the smart home is not just for Christmas – so embrace it all the time

Read the article at ERT: http://ertonline.co.uk/opinion/jingle-bell-stock/

 

 

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New survey by Gekko reveals retail staff are more influential than celebrities and vloggers

Gekko - Google Retail blog image

The results from a recent survey published today by field marketing agency Gekko entitled ‘Shopper Influencers’ reveals that the bricks and mortar retail environment continues to play a significant role in influencing shoppers purchasing decisions across both general and high value goods. The survey by OnePoll was conducted among 2000 UK consumers between 18 and 55+.

Even among today’s tech savvy 18 to 24 years old’s more than 40% prefer to head in-store to see, touch and experience a product before buying, rising to 58% for the over 55’s. Most surprising is that 38% of 18 to 24 year old’s want a personal service and recommendation from in-store staff, the highest among all of the age categories. Only a small proportion of 18 to 24 year old shoppers are swayed by celebrity endorsement (18%) or the opinion of vlogger’s and bloggers (28%).

The influence of friends (70%) and online reviews (71%) among this age group is significantly higher in making product purchase decisions and this is consistent across all age groups. And when it comes to high value items such as TV’s, home appliances and luxury items, the trend continues with online reviews, personal recommendation and the in-store experience rating as the most important influences across all age categories.

When it comes to looking at the key influencers across product sectors there are some notable trends: 

  • Within the tech sector, online reviews from other people are still heavily relied upon (38%) among 18 to 24 year olds but interestingly this is also the case for all age groups with (35%) for over 55’s.
  • Similar to tech, for home appliances, user reviews rate highly across all groups (32%) 18 to 24 year olds, rising up to (46%) among 45 to 54s.
  • For beauty and fashion, reviews from other people score highly across all age groups but in this sector, unlike the others, the influence of bloggers and vloggers is much more highly rated, although only among the younger 18-24 generation (32%) for beauty and (23%) for fashion.

When asked what advertising has influenced a considered purchase none of the mainstream advertising channels were cited as influential: just 7.5% for TV, 8.7% for website, 4.6% for social media, 3% for billboard and 2% for newspaper and print. Advertising in-situ within the retail environment however was rated the key influencing factor at 19%.

Daniel Todaro, Managing Director of Gekko, said: “According to the ONS, while online sales continue to rise, e-commerce as a percentage of total retail sales July to August 2017 was still only 16.4%.  The findings of this study show that the shop floor is clearly still winning in considered purchases, therefore marketers need to invest in making the experience as good as it can be. When a shopper is ready to make a purchase they will look for advice and guidance from people who have experience of using the product be that friends, family, other users or experts in-store. Consumers today are much more savvy and recognise that celebrities and vloggers have been paid for their endorsement, while time and money spent working with staff on the shop floor will in fact pay for itself through category development and increased sales at a higher average sales price, making your marketing work harder.”

Read the article here

Source: Gekko

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Don’t be a retail Dinosaur

Gekko Field Marketing - Retail Dinosaur

DON’T BE A RETAIL DINOSAUR

The best retailers are those that can adapt – that may include looking at rentals or creating a smart home experience in-store to appeal to a new generation of buyers, advises Gekko managing director Daniel Todaro

Having sat on the ERT Awards judging panel, selecting retailers who are the best in their chosen specialism has highlighted some high-flyers, but we all know that there are some real dinosaurs out there that need to change in order to survive.

Retail is one of the most dynamic of industries. At its best, it quietly adapts to the needs of shoppers to increase dwell time, convenience and average basket value. Multiple retailers follow this religiously to increase sales and margins – an approach independents should learn from.

With home ownership increasingly more difficult to achieve, ‘generation rent’ is becoming a significant demographic. This model may not appeal to all retailers, but as a generational change, for many it’s unthinkable to buy outright, repair or move MDAs and CE items. Offering some form of rental package is another consumer-driven solution that allows a retailer to drive sales.

Smart home

With the growth of various new categories, retailers have numerous opportunities – and the greatest of all is the smart home. This will influence all product areas over the next five years.

At the end of 2016, there were 8.5 million smart homes in Europe and the market is forecast to grow by 57 per cent a year to reach 80.6m by 2021. This equates to 36 per cent of all European households owning a smart-home product.

Although shoppers are beginning to see the benefits, it’s clear that they aren’t simply looking for a like-for-like replacement. The key is to display products in a connected manner as a consumer would do in their own home.

In emerging categories, such as smart speakers, the global market is expected to grow annually by 43.7 per cent up to 2022. Sales of 4K UHD TVs are set to grow by 38 per cent in 2017 and will account for more than a third of the worldwide TV market.

And with a quarter of consumers citing a ‘lack of knowledge’ as a reason for not purchasing a smart-home product, and a further 21 per cent worried about security, independents have an opportunity to showcase the technology and alleviate these concerns. If shoppers can see how these products will work in their home, it is much more likely to lead to a sale.

It’s up to retailers to create this environment. Make sure your store’s wi-fi will support multiple devices. Set up some wireless speakers so that shoppers can play songs via Bluetooth using their app. Most importantly, ensure that your staff are trained on each product.

Brands can only help so far in supporting you with training and point-of-sale to create in-store theatre – the rest is up to you.

Taking an omni-channel approach will also mean that although a customer may not leave with their desired purchase that day, they could order and collect next day, or have it installed – for a fee.

Manufacturers can help with creating experience zones in-store. While you are tied into that brand, it offers an opportunity to change perceptions and speak to a new audience.

The most successful retailers adapt to the needs of consumers, which are driven by trends. Don’t rely on brands and take control of your own destiny.

Dos and don’ts to increase sales

Take control of your destiny and give customers the best experience in-store so that they buy not just once, but again and again.

Here are my top 10 dos and don’ts…

DO use your window displays to attract customers.

DON’T leave your displays bland, old or irrelevant to what you sell.

DO echo a high-profile advertising campaign outdoor poster site near your store.

DON’T leave old p-o-s or product out for too long.

DO ensure your customer is greeted.

DON’T leave your customer to browse with no contact being made.

DO merchandise the store so it is uncluttered.

DON’T mix up categories even if space is limited. Microwaves don’t belong with laundry.

DO make ticketing accurate and visible

DON’T make the customer ask you the price or feel you are pressurising them to talk to you.

DO ask your customer questions to make relevant recommendations.

DON’T bulldoze your customer because you know best.

DO listen to your customer to meet their needs and budget.

DON’T sell them something they don’t need. Buyer’s remorse will increase returns and lose you a customer for life.

DO sell a backup item or offer an order service if it’s out of stock.

DON’T lose the sale to a competitor because you don’t have the product.

DO make a distress purchase a pleasure.

DON’T make it harder than it needs to be.

DO offer an after-sales service and make them remember you for positive reasons.

DON’T treat the customer with contempt – today’s small purchase could be tomorrow’s bigger one

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Create a real experience to bring gamers back into store

Despite a mixed result for the physical entertainment market in the first half of 2017, with sales of music falling by 5% and video by 13%, gaming beat this trend, however, growing by 0.5% year on year.

These results are positive news for dedicated gaming retailers, but hardly reassuring for those who are fighting a tough battle against the increasingly dominate position of online retailers and online download platforms. These results are thanks in part to a strong set of new releases such as Zelda: Breath of the Wild and Horizon: Zero Dawn which have drawn consumers into store. However, if gaming retailers are to increase their level of growth and avoid results seen in other physical media categories, they must adapt to suit the ever changing needs of consumers and gaming fans.

At the moment, it is all too easy for consumers to download software via their consoles’ marketplace, or purchase a new console or piece of hardware from an online retailer for home delivery – and this isn’t going to change. If gaming retailers are going to compete against online retail, they need to offer a service that will bring consumers onto the high street and into store. Game’s recent demonstrations of PlayStation VR (however controversial) show exactly what retailers can offer – a real, unique and immersive gaming experience that consumers can’t download or stream.

Though space is limited in some stores, retailers need to offer demos of key new titles for consumers to try. Rather than just leave customers to their own devices, store staff need to be more active in-store, speaking to customers about their needs and offering advice on the best game or console for them. Most other categories in tech and consumer electronics make use of brand ambassadors and product demonstrations to great effect – 74% of consumers want to shop in store so that they can see, touch and experience the product before buying.

Likewise, offering exclusive deals or special offers that are only available in store is a great way to encourage footfall. Competing with online only retailers is easier said than done, but offering exclusive deals is a sure-fire way of convincing gaming fans to spend their money on the high street rather than for the basic package online.

If gaming retailers can make this effort and offer consumers a space where they can really experience a gaming system or piece of software before buying, they can bring consumers back into store who might previously have stayed at home.

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Connect with your customer

Once the stuff of science fiction, the connected home is now a reality, with smart technology now found in almost all categories across consumer electronics and domestic appliances.

Consumers are starting to take a real interest in the smart home. But it’s up to retailers to bridge the gap between desire and knowledge, offering consumers a personalised service. This is an area where independent retailers can excel over their multiple counterparts.

Although there is clearly demand among consumers for smart products, many retailers may still be sceptical that the smart home is the future. If you are a sceptic, take a look at your top-end TVs and MDAs – chances are they all include smart features that your customers aspire to have in their homes.

New smart MDA products, such as the LG InstaView fridge-freezer (pictured) and the Hoover Wizard smart oven, have additional features to complement your customers’ lifestyles. You can offer these smart MDA solutions as the top of your ranging. Soon all appliances and CE products will be smart. Customers who have bought that smart TV or washing machine are likely to come back in-store looking for the next appliance to complete their smart home.

If you are thinking about ranging smart-home products, but don’t know where to begin – start small. There are plenty of products that require only a small investment, but can have a huge lifestyle impact for consumers. Smart plugs, such as those from Hive and TP-Link, allow users to control their appliances from any smart device. From turning on a lamp, to making sure your hair straighteners are turned off, smart plugs are an inexpensive and easy to install and a great way to introduce customers to the category. Likewise, ranging at around £70, smart light bulbs, such as Philips Hue or Lifx, are a great smart-home product, allowing consumers to switch on their lights or change the colour, and can be linked to a device such as Google Home.

Excitement

Then you can move on to other key smart-home areas, such as thermostats from Hive and Nest, and smart security products, such as the Ring video doorbell. These products are more of an investment with an average basket value of £123, but the lifestyle benefits will appeal to interested consumers. Similarly, smart speakers are an up-and-coming category creating a lot of excitement.

As recently published in ERT, a survey by German electronics retailer Reichelt found that 56 per cent of Brits were already using, or would consider using, a voice-controlled connected device in the home. However, 55 per cent did not know how to install them or would need to seek professional help.

There is definitely an opportunity for independent retailers to fill this gap, offering customers professional installation or even training in-store from a member of staff. With some multiple retailers lacking the wi-fi connection needed to fully set up a smart speaker or security system in-store, set your shop apart by offering a full demo-ready model of all your smart-home products for shoppers to try out. This could make your store an obvious destination.

But it’s important that you don’t confuse shoppers with technical jargon. Make sure your staff are communicating what the smart home offers each customer, be it peace of mind when leaving their home for a long period, the money-saving benefits of a smart thermostat, or even the convenience of a smart assistant.

Equally, make sure that, when demoing a product, your staff have been thoroughly trained and are able to answer any questions. Shoppers will want to be reassured that the device is easy to install, unobtrusive and convenient for them.

This will help inspire customers to come to you to upgrade all their appliances to create a smart home for themselves. With the average basket value of a smart-home purchase trending at £105, the prospects are good.

 

Read more at http://ertonline.co.uk/opinion/connect-with-your-customer/

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Positive news for UK retail

Recent yearly results published by Dixons Carphone are good news for all retailers, whether multiple or independent.

Despite price increases and decreasing consumer confidence following the Brexit vote, Dixons has been able to beat the downward trend, increasing pre-tax profits by 10 per cent and like-for-like sales by four per cent compared with 2016.

Looking at the whole of the UK, some key categories have seen lower sales. With TV, for example, seeing a 14.9 per cent unit sales decrease last year, it’s positive news for UK retail that the number-one consumer electronics retailer is proving that consumers are still heading to the high street to buy household tech.

As an agency that represents tech brands in UK retailers, including Dixons Carphone, Gekko’s results in-store agree with theirs, with sales having increased by 5.6 per cent relative to the same period in 2016.

One category that has been particularly significant in improving results for tech retail has been the smart home. Still a growing sector, expected to be worth $58.47 billion (£45.3bn) globally by 2020, the smart home is enthusing consumers to upgrade their appliances and home technology.

In a recent campaign for a smart-home brand, Gekko’s training team created a 68 per cent uplift in knowledge among store staff, which helped deliver a healthy 36 per cent sales uplift in the following weeks.

For independent retail, the strong results seen by Dixons Carphone set an optimistic tone. Gekko knows that 74 per cent of consumers prefer to shop in-store, because it allows them to see, touch and experience the product before buying. Dixons’s results show that consumers are still heading to the high street when looking to purchase a high-ticket item.

These ‘considered purchases’ – products that shoppers need time to think about before deciding it’s right for them – require that additional assistance only found in physical retail.

To match the large retailers in their success, independents need to create a welcoming, ‘showroom’-style atmosphere that will encourage shoppers to try out products before they buy.

A conversation with knowledgeable store staff can easily transform a browser into a customer. Developing categories, such as the smart home, are important areas for potential growth.

Set your store apart by offering shoppers an experience they can’t find in larger retailers, and you too can see these positive results.

Read more at: http://ertonline.co.uk/opinion/positive-new-for-uk-retail/

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Here comes the sun

It may seem a long way ahead, but that well-earned summer break is right around the corner for many, and they’ll be needing some accessories to make that holiday memorable, practical and relaxed.

Put yourself in the flip-flops of another and think about the gadgets you like to take away with you. Translate that into a range of products your customers may benefit from and avoid those pricey, last-minute airport purchases.

Portable speakers are a key area for the summer season and an opportunity to sell. Think beach holidays, parties or barbecues in the garden. Consumers will head outdoors when the weather warms up, and require some entertainment.

Portable speakers from brands such as Jabra and Libratone make a perfect accessory for outdoor living, with Bluetooth connectivity allowing anyone to connect their phone and play their music via Deezer, Spotify or Google Play. Use this feature as part of the demonstration by encouraging shoppers to connect their own device to hear the quality and see the ease of use. Make sure that your staff know how to connect to the speaker and can speak confidently about its features, such as battery life.

Staying with audio, headphones are another accessory many shoppers may be looking to upgrade at this time of the year. Whether purchasing some travel headphones to make flying more enjoyable, from the likes of Sennheiser, or perhaps some sports headphones from Monster or B&W for running in the sun, shoppers will want to see a good range with demo units that they can actually hear playing.

Set up a ‘play table’ in-store, allowing shoppers to try out a variety of headphones. Connect them to a music player to let shoppers hear the quality of the sound. Although not for audiophiles, consumers still want to know they’re getting a quality product before they decide to purchase.

Train your staff to use their questioning skills when speaking to customers looking to buy an audio product, especially headphones. What are they using them for? What type of music do they like? Do they want over-ear or in-ear? What device are they using to play music? All these questions can tailor the shopping experience and make sure each customer gets the right product for them.

With recent news suggesting tablets and laptops will need to be kept in your hold luggage this summer, shoppers will looking for something to protect their gadgets. Think about your range of laptop bags and tablet cases. Does your ranging include heavy-duty cases, from brands such as CAT and Griffin, that will survive a long-distance flight? Shoppers will be heading into store to find these products, so it’s up to you to offer them the advice they need.

When demonstrating a case, don’t drop a device on the floor, as that may lead to disaster. Instead, make sure your staff can communicate the benefits of a case to a customer, explaining the materials used and build quality, and how these will ensure the safety of the customer’s tablet, phone or laptop.

In addition, add other accessories to the conversation such as Tile – a tracker that allows your device to be found anywhere in the world if lost. Shoppers looking to take their devices abroad with them will want the peace of mind that they are safe and secure – offer your customers this solution with a conversation and demonstration.

Another area to consider is home security. Everyone fears leaving their house for weeks at a time, some more than others, and asking a neighbour to look after things while you are away may not be an option.

Now with innovations in the smart home, this fear can be reduced by keeping track of our homes from any smart device. Consider ranging smart security products such as the Ring video doorbell, which allows users to answer their door and speak to visitors from anywhere in the world through their smartphone.

Likewise, smart plugs from the likes of Hive and smart light bulbs like the Philips Hue can give consumers the peace of mind that their homes appear occupied. Both allow users to control their lighting and appliances from their mobile, giving them total control of their home from any location.

If you’re speaking to a customer who’s inquiring about the smart home, explain the benefits of controlling their home from their smart device. The added security benefits are a huge selling point, and are something you can easily demonstrate by installing some demo models on a lamp or similar appliance in-store. And make the point that these smart home innovations can save them money on heating and electricity bills all year long.

There are plenty of opportunities to take advantage of the holiday season. Shoppers will be looking for last-minute items before they travel. Make your store look the part with seasonal p-o-s and displays, encouraging shoppers to head inside to find that perfect, competitively-priced accessory, purchasing a well-chosen product from your store rather than hastily at the airport.

 

Read more at: http://www.ertonline.co.uk/opinion/here-comes-the-sun/

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Identify the problem

Consumer electronics retailing lends itself like no other as a tool for retailers to be more dynamic in showcasing solutions and brands for consumers.

Retailers are experiencing growth across all categories, including a 1.5 per cent sales uplift in major domestic appliances expected through to 2021, of which 20 per cent of sales are made in the independent sector. Likewise, the UK small domestic appliance market was worth £976 million in 2016, and is expected to grow further this year.

Whether they are looking to upgrade an existing device, enter into a new product ecosystem, or make a ‘distress purchase’ to replace a product that has failed, consumers are looking for a solution to a lifestyle ‘problem’.

As a retailer, it’s within your power to provide this solution, offering consumers the right product for their needs and, in doing so, reinforcing why traditional retail is still the best platform to buy ‘technology’ products. The question is: what is the best approach to take for ‘solution selling’?

The problem

Ensure that sales staff know the products and services inside-out. Having an authoritative voice on the shopfloor to reassure consumers is the first step to completing that considered purchase.

Aside from this, a successful salesperson needs to employ a range of skills, including questioning, listening and demonstrating empathy with the customer.

Identifying the problem is the first step to finding a solution. Sales staff should be asking key questions of consumers to discover their needs, budget and motivations. Find out why the shopper is in the store. Are they looking to buy new, upgrade a device or has something broken down and needs replacing? What do they currently have? What specific features do they require? Where it will be used? How often? Is it a primary or secondary device? What is their preferred price range? Asking these questions will give your staff the necessary information to start the sales process in line with your store sales approach, using the customer’s needs to tailor their approach to products and brands that will suit them and their lifestyle.

It’s often too easy for sales staff to make assumptions about what is best for the customer, rather than asking questions. Equally, applying your own spend versus value opinion is not identifying with your customer, as value is in the eye of the spender, not the salesperson. To avert a hard sell, avoid these pitfalls and ensure your staff are fully qualifying shoppers before moving on to a demonstration.

Offer the solution

Once the customer’s needs have been established, sales staff can advise on the best product and brand specifically for the individual shopper. For retailers, selling the solution is all about the customer experience, and how the customer is introduced and immersed into the product and brand.

Your showroom environment should offer consumers the opportunity to experience a product or brand before they decide to make a purchase, allowing them to immerse themselves in the features and benefits of the product first-hand.

With the assistance of a knowledgeable staff member, your customer wants to be reassured that the product will meet their needs and solve their ‘problem’. To achieve this, have a working demo model to show customers how the device would function in their own home. Even if it’s something simply, like demonstrating the load capacity on a washing machine using a bag of T-shirts, this gives customers an extra bit of information that could make all the difference to their decision to purchase, helping to close the sale.

Above all, ensure your staff are trained on core ranges and brands so that they can explain the benefits to shoppers. Don’t make the mistake of ignoring what the shopper has told you, so that the features link naturally to the customer’s lifestyle or specific needs. Shoppers need to know how the product will solve their unique ‘problem’.

Personalise the sales approach. If your customers can see the product working, imagine it in their home, and be sure that it will fit their lifestyle, listen and tailor your responses accordingly and they’re much more likely to make a purchase.

Upgrade the solution

To upgrade from a standard sales approach to a ‘solution selling’ approach, the sales staff need to identify and enquire about the bigger picture, identifying opportunities and sweeping their customer up with a great shopping experience.

On top of offering a solution during the sales process, staff have the opportunity to ‘level up’ the sale by showing customers how much more they can achieve from their purchase by increasing their budget, in some cases marginally.

Having established the customer’s needs and advised on a product to suit their lifestyle, take them one step further by offering attachment sales that can enhance or protect the product. A good example is TV, where many shoppers will be looking for a perfect set-up to upgrade their home. Having decided on a TV, why not introduce a soundbar to the sale, demonstrating the superior sound quality offered and how that can enhance the user experience.

Gekko is expert in delivering this sort of training to retail staff, achieving an average 33 per cent soundbar attachment rate on TV sales. These sorts of high-value attachments benefit both your customers and your bottom line by increasing your average sale value. With this sales approach, Gekko was able to increase average sale value by 41 per cent over the entry-level smart TV.

When completing the sale, think about other questions you can ask the customer. For example, to get the most out of this smart TV, the customer will need an internet connection. Do they have good wi-fi in the living room? No, then how about some wi-fi range extenders? That could also include a cover plan or installation service. In this way, you’re demonstrating to the customer why they were right to come in-store and experience the product in a way they could never have done if they had simply shopped online.

This approach to solution selling is positive for both customer and retailer. The customer has a solution to their purchasing ‘problem’, having been advised and immersed in the best product and brand for their needs by a knowledgeable staff member.

Equally, the store benefits from up-selling and attachment sales as a result of this more considered approach to sales. The key focus though is the customer experience – if shoppers are given a ‘glimpse into the future’ – imagining themselves using the product and how it can fit into their lifestyle – they are much more likely to make that decision to purchase there and then.

They may also come back to expand a set-up, buy that matching MDA or simply choose your store for every future ‘technology’ purchase, because they know they will be listened to, offered solutions, given a service they appreciate and will enjoy the experience.

 

Read more at: http://ertonline.co.uk/opinion/identify-the-problem/

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Counting the cost of Brexit

The ERT Turning point Summit held in February touched on the many opportunities that face independent retail.

Like it or not, I refer to these as opportunities, as challenges paints a negative picture rather than an optimistic future in the most dynamic of industries – technology.

One area that we must remain optimistic about, as it’s a certainty, is Brexit and the impact this is having on trading even before Brexit has happened. By the time you read this, the Government will have triggered Article 50, starting the process of extricating the UK from the EU.

When the vote happened, there was much debate regarding the immediate impact in trading. In August, I wrote: “Any price increases will certainly not be absorbed by resellers, and will instead be passed on to the end user”. With the significant fall in sterling against the dollar (10 per cent) and euro (seven per cent), many brands chose to use this as reason to make trading that little bit more difficult for retail, in particular technology.
First to raise the average price of every product by 10 per cent was Dell, later followed by Apple who chose to increase prices by around 25 per cent again across every product, with a MacBook Pro jumping from £999 to £1,249. It wasn’t just hardware, however, as apps all increased from 79p to 99p and £7.99 to £9.99, all on the back of the Brexit vote and currency fluctuations.

Microsoft followed with an 11 per cent increase, and more recently Sonos, with what are now ‘old’ products, increased their pricing by 25 per cent across the entire range which took effect on February 23, taking a Play:1 from £169 to £199 and Play:5 from £429 to £499.

In the MDA category, although not a blanket price increase, many European brands, including Siemens and Indesit, are demanding payment in euros from distributors, pushing up retail prices due to a ‘trickle-down’ effect resulting from the increasingly unpredictable and unfavourable exchange rate.
These brands have something in common: they are category leaders and, to a certain extent, dictate the development of their respective categories through a rigid pricing structure and go-to-market plan. What they perhaps do not appreciate is that consumers aren’t stupid and can choose to opt for other brands with more appealing price points – an opportunity for emerging and established brands and retailers to explore.

The challenge for retail is how to up-skill your work force to continue selling the same products they’ve always sold successfully, but now at a higher price point. Sales teams will have to work harder to close a sale, and perhaps longer, but for no incremental benefit to you. Retailers don’t benefit in the same manner from what some may consider an arbitrary price increase, with only a slight or no increase in margin.

While many who voted ‘out ‘may have never considered that the costs of goods we import would go up, the reality is that it becomes a convenient rationale for many brands to apply an increase, blaming Brexit, and passing the cost on to consumers rather than absorbing this themselves. This is likely to be applied across every category.

Away from tech, others brands, such as Tesla and Lego, have both applied a five per cent increase, stating that this action was taken as “direct result of the continuing devaluing of the UK pound”. We saw what happened when Unilever tried to increase the cost of products such as Marmite by 12.5 per cent – the public made it known that they have a choice and they would choose to abandon a brand for a similar product. You need to have rather good brand equity to successfully manage price increases that impact on your loyal customers’ pockets.

Call it a ‘Brexit levy’ if you like, but let’s be realistic: it’s not going away. With Article 50 triggered, currency fluctuations could prove to be more negative and incur further price hikes. On the other hand, they could become positive, but if so I suspect we won’t see brands roll back price increases, instead retaining their increased pricing model to establish range pricing.

Whatever the outcome, market economics means retailers of all types must remain optimistic and have a clear vision of hope as they navigate the future. This includes pushing back on brands that make it harder to sell. Perhaps by introducing into your categories new or up-and-coming brands that could offer you more margin and your customers a better product at a reasonable price they are happy to pay.

 

Read more at: http://ertonline.co.uk/opinion/counting-the-cost-of-brexit/

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Take control of your destiny

ERT  has taken the brave step to look at how independent retail can be supported and survive, marking the start of a ‘Turning Point’ in the future of independent electrical retail.

Rent and rates increases and the Living Wage are just a few of the challenges retailers must combat. They can do this with a smart approach and by giving consumers what they desire, either in-store or online as an omnichannel approach.

One of our leading retailers, Robert Hughes, states that “personalisation and localisation is relevant” – sound advice from an independent group that is growing successfully.

Reliance on manufacturers to ‘do more’ is old-fashioned and misplaced. Manufacturers do not have a responsibility to reinvigorate electrical retail – it’s a collective responsibility.

With a falling pound, lower margins and greater competition in crowded categories, waiting for a brand to invest sufficiently in you is unlikely. Retailers need to be in control of their destiny and reinvigorate their model to appeal to all. Get brands to support you on training, promotion and display. Ask your buying group for those valuable generic soft skills that give you the ability to develop the categories that work for you.

Independents need to look for new opportunities for growth. The most obvious is the smart home, which is going to be linked to almost every category within the sector. With Gartner suggesting it could become a global market worth $38.35 billion by 2020 – that’s only three years away – the smart home is the future of electrical retail.

Independents have an opportunity to offer consumers a shopping experience not found in large multiples.

In the TV/AV category, 62 per cent of shoppers are between the ages of 30 and 49. One-in eight are male. This is an increasingly important statistic and, to quote Sony sales director for specialists Roy Dickens, the growth opportunity is “crossing the threshold into the consumer’s home” to install a solution, increasing attachment by offering a service that provides an end-to-end solution.

In domestic appliances, 70 per cent of shoppers are between the ages of 30 and 49. More than half (55 per cent) of shoppers in the category are female. This demonstrates the existence of ‘generation rent’, who don’t own their own homes and would be more inclined to rent MDAs.

Although shoppers with disposable income are in the older age brackets, don’t discount younger audiences. Many categories are more relevant to a younger audience – a prime example being audio. With just over half (52 per cent) of 16 to 24-year-olds regularly streaming music online, increasing your range helps to broaden your store’s appeal.

The omnichannel approach is an important part of the strategy and should be embraced as a method of attracting customers in-store whether, virtually or in person. The experience they encounter is what makes a shopper become a customer.

Retailers must ensure their staff can sell the benefits of high-value products. This can only be done through staff training, display, promotion and experience by retailers, supported by manufacturers, to achieve the combined approach needed to influence that ‘turning point’.

 

Read more at http://ertonline.co.uk/opinion/take-control-of-your-destiny/

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