Price Wars Are Not The Answer: Win Over Customers Without Competing On Price
By Francesca Nicasio, Vend
Between the numerous price check apps in the market and the fact that there are plenty of retailers selling the same products, it’s easy to see why many merchants get into price wars, flash sales, and outrageous discounts to entice shoppers.
And while such tactics can be effective in luring in certain customers, they can’t always sustain solid and long-term retail success. Slashing prices and offering large discounts can not only eat up your margins, they can also train consumers to only shop with you if you’re having a sale.
In order to truly win over customers, retailers must go beyond competing on price or products, and instead step up their game in the customer service and experience departments. When you’re up against merchants who are selling the same products (sometimes for less), you need to be able to connect with shoppers in unique and memorable ways.
To help you accomplish this, we’ve put together some action steps for improving the customer service and experience. Go through them below and see what you can implement in your business.
Invest in your workforce
Employees play a huge role in executing your customer service strategy, so make sure everyone in your team is well-trained and armed with the tools that’ll help them serve shoppers better.
“These days, there’s nothing worse than when a customer knows more than the associates on any given thing about your store or brand,” says Erin Harris, Editor-in-Chief of Innovative Retail Technologies. “That’s why retailers really need to invest in training, as well as in scheduling and management, to ensure that friendly and knowledgeable associates are available in the right place and at the right time.”
In addition to training, see to it that your staff is also fairly compensated. Research has shown that retailers that hire well-paid employees outperform competitors that don’t invest in their workforce. One Wharton School study has even found that “every dollar in additional payroll led to somewhere between four and twenty-eight dollars in new sales.”
Similarly, MIT professor Zeynep Ton conducted an in-depth study on the operations of various retailers and discovered that companies such as Trader Joe’s, Costco, QuikTrip, and Mercadona, which invest significantly more in their employees, “have high profits, low prices for their industry, excellent operational metrics, and a reputation for great customer service.”
Indeed, while it may seem that cutting back on workforce expenses is saving you money, this move can actually do more harm than good. Bear in mind that keeping your store organized and serving customers requires a lot of effort and judgment, so failing to invest in your staff could discourage them from exerting themselves fully.
Design exceptional shopping experiences
According to Harris, retailers who want to stand out from their competitors must figure out a way to give consumers something they can’t find anywhere else. And no, this isn’t just about selling unique products—it’s about offering shoppers exceptional retail experiences.
One example of a retailer doing this well is Alton Lane, a premium tailored apparel store that sells custom suits for men. “Alton Lane leverages technology in a variety of innovative and margin-moving ways, but they’ve also added a lot of extras that make them a customer service standout. For instance, their locations have big leather sofas, a stocked bar, and even flat screen TVs so customers can catch the game,” adds Harris.
At Alton Lane, a gentleman can make a private appointment at one of their locations, where the retailer will digitally capture his measurements and include it in his file. That customer’s information can then be accessed anytime he wants to shop the brand, so whether he’s shopping in the Chicago location or in the Boston branch, his information will be there. The same goes for when he’s purchasing online.
“They’ve turned shopping into an inviting experience,” she continues. “Alton Lane knows that most men don’t particularly enjoy shopping, so they designed this home run of a customer experience that makes buying clothes convenient—even enjoyable—for their target shoppers.”
Take a leaf out of Alton Lane’s playbook and design an in-store experience that your customers will love. Do research on your target audience. Get to know what they like most (and least) about buying your products, then create an experience that incorporates the things they love and eliminates the ones they don’t.
Invest in technology and marry it with the basics of retailing
“Technology can and will ease countless operational burdens,” says Harris. She adds that retailers should definitely invest in tools and solutions that’ll help their business. “I’m not talking about blue sky innovation. This is about technologies that are affordable, easy to implement, and are in line with where your customers are, or where they want to be.”
Going back to the Alton Lane example, Harris says that the retailer has done a great job in implementing technology and marrying it with “back to basics retailing.” Harris is referring to Alton Lane’s omnichannel shopping experience that allows customers to access their information and complete purchases across multiple stores or channels.
The retailer has successfully embraced technology, but at the heart of it all is a system that makes shopping more pleasant and convenient. And at the end of the day, isn’t that what every consumer wants?
Bottom line: Set a deadline then take action
We’ve provided some solid tips and examples above, but the best advice we can offer you is this: create a plan of action and give yourself a deadline to complete it.
As Harris puts it, “‘some’ is not a number, and ‘soon’ is not a time.” Your need to be more concrete about your goals and what you need to do to achieve them. Prioritize your initiatives, set a realistic timeline, and take action. Whether you’re looking to empower your workforce or are making improvements to your brick-and-mortar store, you have to focus on what needs to be done, set a date, and just go for it.
Save your spot in our next online workshop
Looking for more insights on empowering your workforce and implementing technology to enhance the retail experience? Join leading retail expert Erin Harris of Innovative Retail Technologies for the webinar, How to Win More Customers without Competing on Price or Products. Erin will be discussing proven ways on how to offer surprise-and-delight services and experiences that set you apart from competitors.