| Make time to analyze the competition. Trumping your competition is going to take time, so set aside time each day for research. Make it a daily habit to visit your competitors, read the latest retail news, and rethink how you present your brand and your merchandise. If the competition is doing something right, make use of the idea. If they're doing something wrong, don't fall into the same trap. |
| Know your category better than anybody, especially the competition. Pay attention to what's happening in your primary trading area, and retail in general. You can't stay on top of things if you're not fully informed about your category and your industry. |
| Identify what makes your competitors different — and then distinguish your store. Making the most out of what you can offer a customer means knowing what the other people are doing. Differentiate your store by offering a high-quality customer experience and by listening to what your customers want and need. |
PROBLEM: "Every person I see reminds me of my mother."
"I would say the common organizational mistake that is really made by all retailers,
particularly smaller retailers, is a failure to really try and understand who their target customer is. By that I mean, retailers don't spend any time trying to research what kinds of customers their store targets," says Richard Talbot, President and Managing Director of Talbot Consultants International Inc.
What happens when you don't know your customers? They all become the same and your service suffers. |
SOLUTION: Know Your Customer
Understanding your customer may seem like an elementary rule, yet many retailers don't know who their customers are, even if they think they do. Truly knowing your customers requires
empirical research.
Conduct market research. Even small-scale market research helps. Generating in-store data through simple customer surveys and demographic analyses are the easiest way to determine who your best customer is. Elicit feedback at the cash register, through on-thefloor
questionnaires, and consider offering an incentive to encourage customers to participate in your survey.
Look to consultants for advice. Good retail consultants understand retailing and know the market. Hiring a consultant to help conduct market research inside your store can provide crucial third-party feedback. Since they're hired guns, you can rest assured they're doing what they do best — mining data that will help you build your business — so that you can do what
you do best — serving customers.
Target your market. When you know your market you can focus more closely on serving those special people — limit the number of products in your store to merchandise your customer will buy; advertise to customers that make up your potential customer base; turn secondary customers into primary customers; develop relationships with the people who patronize your store. |
Here are some questions to ask when planning a simple market research campaign:
Who is my best customer?
Where do they come from?
How can I reach these people?
How can I adjust the store layout and store design to serve these people better?
What are my customer's priorities?
A Simple Way to Track Customers
Richard Talbot, President and Managing Director of Talbot Consultants International Inc., explains that conducting in-store research isn't as expensive as some retailers think. He points to RadioShack's postal code tracking method as a prime example of how simple research can generate important data.
Here's how you can make use of this idea:
Before completing POS transactions, ask customers for their postal code. This is the first step. By tracking every sale by postal code, you can determine which postal codes generate the
most sales.
After assembling a list of high-volume postal codes, use Statistics Canada databases to find out details about who these people are. Use this information to identify other postal codes and neighbourhood clusters that share the same characteristics as your main customer base. Find out what kinds of people live in these places, what kind of media is available to them, and other pertinent data.
Next, take this information to a marketing firm and develop advertising and promotions that appeal to the kinds of people living in your target postal codes. Identify yourself within the trade area and to other postal codes that match your clusters. |
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