Retail is one of the biggest and most diverse industries in the world. It happens to also be one of the fastest growing and changing industries. Therefore, to remain competitive, retailers need to embrace innovation by continually improving their brands by making them more affordable, more accessible and more consumer-friendly. Leading innovators are constantly ahead of the curve of evolution and have found success through expanding their online marketplace, creating partnerships with other companies, and offering extended services to accommodate a skills gap in their consumer base.
As an example, a Canadian brand that is excelling when it comes to retail innovation is Best Buy Canada. They have managed to successfully and seamlessly incorporate online and in-store experiences into their business plan which has allowed them to continue to remain highly competitive after many years. Their approach to retail innovation will be used as a case study in this post on how both leading and adapting to industry trends will keep a company competitive through constant evolution of consumers and new technologies. Continue reading to see how you can incorporate some of these strategies into your retail brand.
Expand Your Online Marketplace
In 2016, Best Buy added an aspect to their website that takes full advantage of modern technology and product distribution methods in the form of an online marketplace. Other leading retailers have also adopted this approach, such as Amazon and Ebay, who have a feature for Canadian retailers to sell to Canadian consumers. Walmart’s online marketplace is open for Canadian retailers as well, but only if they shipped products to the United States.
By adding this component to their website, retailers can provide customers with the opportunity to access a greater variety of products in one place and increase the amount of traffic their own products receive. It also provides another opportunity for stores to use their website to make a profit. Most of all, it improves the customer experience by allowing them to find and purchase products not just sold by the store, but also from other retailers, as conveniently as possible.
Establish Product Partnerships
Product partnerships give retailers the opportunity to make profits on not only their own products, but also the products of other brands that their customers would benefit from. Other companies can adopt this strategy to effectively reach a broader customer base without having to develop additional products.
Best Buy has a number of partnerships with companies such as Google, Sony, Samsung, Epson, HP, and Apple. Companies have the option to purchase or rent space in Best Buy stores, send representatives to the stores to talk specifically about their products, and make certain products only available at Best Buy. The money from these retailers also helps Best Buy cover the lease for their store. This is a huge improvement to the layout of the stores because companies want to protect their investment, so they are more likely to ensure their demos are up to date and there is inventory available to be sold. This model also caters to customers to ensure they feel they are receiving accurate and useful information from brand representatives.
Introduce Additional Service Offerings
Many consumers are not as tech savvy as they hope to be, or think they are. However, the products available in the marketplace today are becoming more and more sophisticated, where many consumers do not have the capability to set up or maintain their product themselves. This creates a skills gap between the product and the consumer that needs to be closed.
Companies such as Best Buy offers services related to their products directly in store in the form of Geek Squad, their in-house technology specialists. Instead of a customer having to find and pay someone else to set up or fix their TV, laptop, or refrigerator, Best Buy gives them the convenience of having it set up or fixed by one of their own professionals.
Additionally, for customers that decide to purchase a ‘set up’, it is much less likely that they will return their purchase because it eliminates the technological barrier. Many returns of big items, such as TVs, come from the customer not knowing how to set it up properly and lack of access to the features that were explained to them in store. These services ensure that the process, starting from the customer looking at demos in store to using their product at home, goes as smoothly as possible. The customer is getting the most out of their product and their experience is as positive as possible. This is not only another opportunity to make a profit, but it deepens customer loyalty.
Most of All, Put the Customer First
As we can see, the ability to update and improve business without risking customer satisfaction is one of the many factors that have allowed Best Buy and other successful innovative retailers continue to dominate the retail and tech industry for so long. Being one step ahead of competitors allows them to tap into potential markets that become available and adapt their services accordingly. It is not news that retailers must stay on their toes to keep pace with the ever-shifting consumer needs and competitor innovations. We challenge you to implement some of the above recommendations into future business strategies with a focus on your customer base in order to capture market share and provide a seamless customer service experience.
TPG is uniquely qualified to help retailers solve complex problems involving customers, merchandising, inventory and technology integration. Let us help you reach your optimal performance potential. Contact one of our retail specialists today