I realize this is an incredibly rough patch for retailers and apologize, in advance, for sounding too critical. I need to remind myself that it’s easy to find faults. Had I been a retailer I too would be crying myself to sleep. But, I’m not a retailer.
Why is this such a bad stretch? We all realize consumer spending is at an all time low but is this really why your sales are down 60%? You’ve always prided yourself on being a niche retailer so why are you looking at consumer confidence index these days?
See I believe this correction was needed. Too many retailers simply carry products manufactured by other people, who in turn, simply produce those goods in third world countries. Any retailer in this category should be happy to have survived this long. According to Porter you should have gone extinct a long time ago.
Retailers should model after Google. The job of a retailer is to filter millions of prospective products and create a neat list of 50-100 for their customer-base. Like Google, they need to police bad products and remove them from the results mix. Like Google, they need to hone listening skills and know customers better than they know themselves.
Customers leave a ton of data but to capture real insight one needs to look beyond sales data, understanding why prospective shoppers walked into to your store, looked at products but ultimately decided to not buy is just as important.
If you don’t have a deep data warehouse and sophisticated mining tool then simply pick up the phone and talk to customers. If you don’t have customers’ telephone numbers invite your husbands/wives/girlfriends/boyfriends and ask them what they think about the ‘cool’ stuff you carry. If your typical customer persona visits the store and then leaves without a purchase chase them down and ask what they were looking for, ask what they thought about your store and products. Now I am not suggesting you to do these things literally, you know your product and customer better than I could ever. Take this information and convert it into something that would work on your customer.
This is an incredibly good time to acquire customers who are frustrated by the retailers they currently do business with.