As holiday season approaches, you should start to consider what to stock your shelves with and how to merchandise it. Now that most cities and regions have fully re-opened, you should expect more foot traffic in your store and more shoppers ready to spend money during the biggest shopping season of the year.
In order to capture shoppers’ attention, you will need to stand out. With supply chain issues affecting big box stores that import more from abroad this year, local businesses have the room to thrive and stay competitive during this busy season. We will introduce you to some of our selling tactics for this season to make sure that there is a steady flow of people coming in and out of your store.
Put new seasonal items at the front of the store to encourage customers to make impulse purchases
Merchandising is especially important during the holidays. The right strategies can make a world of a difference when trying to sell seasonal products such as greeting cards, decorations and gifts.
Make sure that you prominently showcase new or seasonal products by highlighting them in signs around the store and featuring them in any window displays. Make customers feel welcome and at-home when they browse in your store. You can also create a display at the checkout area that features seasonal low-ticket items that people would buy impulsively such as winter lip balm, hand cream, and stocking stuffers.
Put any discounted items (e.g. last season holiday goods) at the back to drive customers further into your store
Placing sale items at the back of the store means that you are able to capture shoppers looking for a bargain by making them walk through the entire store and see your entire catalog of items on display. Studies have shown that this encourages shoppers to buy more on impulse.
A lot of pharmacies or supermarkets use this strategy by placing bulky “loss-leaders” such as toilet paper (products sold at cost or even under cost to attract shoppers into the store) at the back of stores to encourage shoppers to use a shopping cart since this will make it easier for shoppers to browse for a longer period of time and pick up higher-margin products.
Package products that aren’t selling as well together
Make holiday gift packs to move slow moving products. Make sure to highlight the value of the gift pack (e.g. how much is saved versus buying the items individually)!
Grouping similar items together can make them seem more appealing to shoppers. In some cases, it can even increase the selling price of certain products! Attractive packaging can increase the perceived value of certain products. Festive packaging also adds to the overall look of the store and makes gifting easier for shoppers who do not want to wrap their gifts. Since convenience is important to many shoppers, this can directly impact holiday sales.
Deck out your store and online channels with seasonal and/or festive decorations
Put up inclusive holiday decorations to make sure that you do not alienate any customers while trying to create a festive spirit. A popular theme is decorating the store based on the seasons (example: Winter-themed décor and trinkets for December). Pinterest is a great starting point to get inexpensive DIY ideas if you’re on a tight budget.
Offer products that aren’t selling well as a gift with purchase
This is another way to move products that aren’t selling as well as expected. Make sure to have a minimum purchase amount to drive larger orders. This is also an easy one to offer in-store and online. Generally speaking, it’s good to have free gift offers with all channels but make sure your higher value gifts are reserved for in-store sales since shoppers buy when they can see everything you offer in person.
Use QR codes on your storefront window to keep selling even when your store is closed
Instead of turning off the lights and calling it a day, use your physical storefront to showcase holiday sweepstakes or promotions. One way to do this is by using QR codes in your storefront displays to make it easy for customers passing by to shop for items impulsively and learn more directly in your online store.
Once customers are in your online store and have added items to their cart, even if they don’t buy right away, you are able to send them retargeting emails (emails that remind them that they still have items in their cart ready for online checkout) and let them know about future promotions.
October to December marks the peak shopping season for retail stores. It’s a time when many retailers plan for an increase in shoppers. As the world moves out of the global pandemic, retailers need to be ready for customers with new shopping behaviors.
According to a Google study, 70% won’t consider purchasing something without seeing it online: whether it is an ad, browsing through a website, social media, or email newsletter. This means that retailers need to start ramping up on their online efforts early: whether it is sending weekly newsletters or updating social media on a regular basis, “online storefronts” are more important than ever to shoppers.
People often flip between discovery (window-shopping) and shopping (looking for products mainly based on functions or features) until they are ready to make a purchasing decision. Of the two, discovery is more emotional and can often override the rational thinking behind shopping. Which is why online “pre-shopping” discovery is so important to the entire shopping process now.
A Statista survey showed that up to 50% of people are planning to do their holiday shopping in-stores. This means that retailers need to be ready to showcase new merchandise and discounts online to shoppers even before they make it to the stores.
In 2020, up to 79% of people left their holiday shopping until one-week before Christmas. This is good news for retailers because they are able to push their efforts to the very last minute. The same study showed that 64% of shoppers planned to shop in-stores. After more than a year of restrictions, people are eager to get out. This is great for physical stores that are able to target shoppers when they’re nearby.
Convenience plays a huge role in purchasing decisions today. “Now near me” searches have grown 100% worldwide. Options for store-managed e-commerce have also increased a lot. Because some shoppers will always leave holiday shopping until the last minute, local stores have a major advantage. After all, everybody has experienced shipping delays given the increase in online shopping. Instead, more local shoppers are searching for ways to buy online and pickup in store (BOPIS) to avoid delays.
The key to successfully offering store pickup for online orders is inventory accuracy. This means using store operations software that offers real-time stock information in-store and online. One way to make sure that your store appears online is to use Google’s free product listings and Local Inventory Ads (LIA). Learn more about how to increase foot traffic to stores with Google here.
For last minute shoppers, retailers can offer store pickup. Not only does this avoid delivery delays, it helps encourage shoppers to purchase extra items when they come to the store for their orders. Make sure that your order pickup area is well-merchandised with suitable impulse products. And consider switching to an order pickup system that will allow staff to checkout customers. There’s nothing worse than losing sales from a in-store shopper just because a customer doesn’t want to line up again to pay.
Thanksgiving weekend (from Thanksgiving to Cyber Monday) is one of the biggest shopping events of the year. Black Friday will look different this year as more COVID-19 restrictions are being lifted. It will be a chance for shoppers to re-emerge in store to do their shopping.
This is the perfect opportunity for retailers to attract more shoppers with Black Friday marketing to increase store visits and sales. To take full advantage of the holiday weekend, retailers need to be prepared to meet shopper demand and expectations.
Black Friday Shopper Insights And Trends
Despite the impact of the pandemic, Black Friday sales in 2020 were surprisingly strong. Although brick-and-mortar stores saw a decline in foot traffic and sales, 2020 was a year for e-commerce. According to Adobe Analytics, online sales in the US went up by a whopping 21.6% from the previous year.
From the same survey, it was reported that 44% of consumers planned to shop small and support local retailers. Compared to previous months, local retailers did see a 545% increase in sales around Black Friday. This is good news for local retailers who want to take advantage of the spending season.
Keep reading to find out how you can take advantage of these trends and increase your retail sales!
6 Retail Store Marketing Tips
1) Improve Your Local Online Presence
Research shows that shoppers are looking to Google and conducting searches even more now prior to visiting physical stores. This shows that valid and accurate online information make it easier for shoppers to purchase in-store. This means that, even without an online store, it’s important to improve your online presence.
If your business cannot easily be found online, there’s a large chance that you are losing out on potential shoppers to your competitors. Here is a quick checklist that will help you review how your retail store appears online:
Check to see if you business information and holiday hours are updated on Google My Business.
You can use tools like Yext to run a scan of how your business appears on listings / online directories across the web (Google, Yahoo, Bing etc).
If you’ve moved or want to be found on more local directories, sign up for a one-time local listing service through services such as The Hoth or Fat Joe.
Encourage or even offer a small incentive to get your happy customers to leave a positive review on your Google My Business store profile. Make sure that you reply to customer reviews whether they are good or bad. You’ll want to ensure that your customers are regularly leaving reviews as 90% of customers read online reviews before visiting a business. Click here to find out how you can gather more positive reviews for your retail business.
Retailers with websites need to make sure that their websites are mobile-friendly. You can use Google’s Mobile-Friendly test to check how easy it is for shoppers to view your website on their mobile phones.
2) Engage With Shoppers After The Holiday Weekend Is Over
This means that in order to capture this chunk of customers, retailers should build on the existing interest and run promotions or events even after the Black Friday weekend. To reach as many shoppers as possible, run email marketing campaigns possibly together with digital marketing ads to promote your unique products and deals!
By partnering with local businesses, you can provide unique deals that shoppers will have a hard time passing up. And this way, you don’t have to risk low profit margins. In fact, you can still sell products at regular price or even at a premium.
The best collaboration strategies include:
Selling products in bundles: Packaging products that complement each other in one product bundle is a great way to increase your store’s average order value. For example, pairing three lipstick shades with a skincare product or, bundling sweaters with a free bag. In order for this strategy to work, it’s obviously a good idea to partner with another retailer that sells complementary products.
Offer partner promotions / discounts: Another effective strategy includes cross-promoting. For example, shoppers will receive 10% off of total sale or free shipping at your partner’s business when they purchase $50 or more at your store. You can print promotional material on your receipts and customers can use this as a voucher.
Black Friday is a great opportunity to strengthen your relationship with your most loyal shoppers. After all, they are best customers and the ones most interested in your products.
By adding exclusivity to your email marketing campaigns, you increase psychological rewards like a sense of belonging and importance. This is why exclusivity makes your promotional offers appear more attractive to shoppers vs. simply pricing and encourages them to visit your store.
Remember – shoppers receive too many emails during this time of year. So make your emails stand out with:
Clear offers in the subject line (for example: Exclusive VIP Sale)
Personalized subject lines (personalized subject lines are 26% more likely to be opened). Or, you could include the shopper’s first name in the email opening line.
A short, simple, and to the point message.
5) Promote Urgency
The majority of shoppers (92%) believe that strong deals will be offered all throughout the holiday season. And with so many competitors offering deals during the weekend, shoppers are left with a lot of decisions to make. That’s why it’s necessary to create a sense a urgency with your Black Friday marketing campaigns.
Urgency is a widely used marketing tool in retail. And for good reason – creating a sense of urgency in shoppers increases demand and ultimately leads to more purchases. Create an incentive for shoppers to take action by running your promotions for a limited time. One effective way to create time pressure is to include a countdown timer on your website or in your email campaign. Show your shoppers how many days, hours, and minutes are remaining for them to get a deal on their favorite items.
6) Highlight Stock Availability
Stock availability is a type of FOMO or “Fear Of Missing Out” that encourages shoppers to take action. It’s a good idea to emphasize that certain items are limited or low in stock in your marketing campaigns or on your e-commerce site. If you do not have an online store, it’s a good idea to run Google Local Inventory Ads and take advantage of digital marketing that helps you promote automatically based on product availability. If your POS is linked directly to these type of Google Ads, stock availability will adjust based on real-time shelf quantities and save you the hassle of manual updates.
These ads work by targeting nearby shoppers who are searching online for products that your store sells. Google LIAs are effective because they capture shopper intent at the moment that they are looking to purchase. Click here to learn how your store can easily implement Google LIAs together with your POS system to increase store sales and foot traffic.
Omnichannel Shopping Are The New Reality Of Retail
Regardless of what stage you are at, moving your retail business online, consider the strategies above to improve how well you serve your customers online this year during the all-important holiday shopping season.
One of the most common methods of payment in both traditional and online retail is payment by credit or debit cards. This is particularly true since the pandemic started as more and more shoppers are looking to avoid touching cash and prefer to pay with contactless payment options. After all, card-based payments are reliable and trustworthy ways to accept payments easily. But there are a lot of things to consider when choosing a new payment processor. Here’s what retailers should consider to minimize their costs when signing up with a new card processor:
Type of Payment Options
The type of retail business you have determines the way in which you take payment. There are 3 general types of payment options:
Card Terminals (EMV PIN Pads) for merchants to accept in-person payments
Virtual Terminals for merchants to manually accept payments with the card payer present (e.g. phone or fax payments)
Payment Gateways for customers to make payments themselves in the shopping cart of an online store (e.g. PayPal, Bambora, Stripe, etc.)
Each of these types of payments can be supplied by the same or differing payment processors but they each have different rates. Generally speaking, card terminals have the lowest rates and are considered the most secure because the card holder must be present and / or provide verification with a PIN code. Remember that magnetic stripe readers are not EMV compliant and only chip-and-PIN terminals protect the merchant against chargebacks.
Expert Tip: While card terminals are EMV compliant and do protect merchants against chargebacks, this is usually only for in-person payments made using chip-and-PIN. Since the pandemic started, more and more retailers are offering contactless (tap) payments. But if you do accept contactless payment as a merchant, you should always check your payment processing policy to see if tap payments have chargeback liability. Many processors do not cover tap payments and so merchants may be on the hook for any chargebacks on such payments. This is why many merchants have a tap limit and it is definitely something a merchant should check if they’re thinking of increasing their tap limit.
Virtual terminals have higher card rates than card terminals but they are still generally lower than payment gateways. Merchants should keep in mind that virtual terminals still open the merchant to chargeback liability. The best way for retailers to minimize the liability exposure is to make sure that there is a customer-signed order agreement and for the merchant to collect as much verification information as possible such as billing address, etc.
Finally, there are payment gateways. This is the payment option for e-commerce which generally has the highest fees as it’s considered the highest risk of the 3 options. Similar to virtual terminals, online payments are liable to chargebacks. Merchants selling online should always check with their gateway payment provider for their chargeback policies and how they can best protect themselves from them.
Types of Payment Processing Fees
Even when you know what payment options work for a retail business, various processors will have offer different types of processing fees:
Flat % Fee + ¢ per transaction
Interchange Plus % + monthly fees
CAD vs. Foreign Currency
Credit card processing fees often range between 1.55%-4% with variable rates from Mastercard, Visa, Discover and American Express. Some credit card processors charge more for particular credits cards (eg. American Express) because American Express relies more heavily on merchant swipe fees and annual fees rather than interest rates (that most other processors make money on).
Everything else being equal, merchants should compare different processing fees based on three factors:
The average number of transactions per month
The average dollar value of every transaction
The total value of all sales processed per month
Here’s an example of how processing fees can be dramatically different based on variations in the 3 factors above. Merchants should always compare the rates between processors before signing a new processing agreement.
Expert Tip: While Interchange Plus rates often work best for retailers with fairly high processing volume (e.g. $1M+ annually), it’s important to consider the type of clientele a merchant has. This is because Interchange Plus processing fees charge different rates based on the type of cards used (e.g. gold cards cost merchants more than standard credit cards). As such retailers who sell luxury or high-end products may be better off with a flat % monthly fee if the majority of their clients are customers with premium or foreign currency cards.
POS Payment Integration
Traditionally, merchant processing is handled separately for in-store and online payments. While this is changing now with a few all-in-one payment solutions coming out, besides the overall cost of the processing fees, the biggest cost to managing retail payments is the amount of resources required to track payments against sales.
After all, reconciling payments received is key to making sure that all funds are received and to quickly find out when there are any operational issues that need to be addressed immediately (e.g. suspicious employee behavior, high refunds, etc.)
This is why more and more retailers are looking for POS that can handle their preferred payment processor whether for online or in-store payments. Having payments automatically recorded in the POS minimizes human error and increases checkout speed which is important for stores with higher traffic.
Individual merchants will value different features but, generally speaking, the more established the retailer, the more important it is for the merchant to minimize sales-based fees that take a percentage of sales. While some software solutions have low (or even no) monthly costs, it’s usually because they charge higher than average % fees and / or restrict you from choosing other payment options by charging additional transaction fees on top of the regular payment fees. Others like TAKU Retail charge a flat monthly software fee with no additional sales-based % fees.
Other things to look out for in a retail POS is whether it allows refunds in-store regardless of where a payment is received. Many systems were designed to accept sales separately from different sales channels. As such, it can be a hassle to manage returns and accept refunds in separate systems. Systems like TAKU Retail allow merchants to manage even online returns with store-based refunds or exchanges. This allows merchants to not only encourage exchanges instead of refunds to avoid losing the entire sale, but it allows merchants to refund with lower cost payments options such as cash or debit as many payment processors charge the same rate for refunds as for sales.
Other Things to Consider
Retailers also need to be wary of other a few other factors when choosing their credit card processors to ensure that they are well-protected and aware of the real cost:
The amount of time required (withholding period) for funds to be deposited into the company bank account.
Whether processing fees are deducted upfront (Net Deposits) or at the end of every month (Gross Deposits) – net deposits can be harder for bank reconciliations as the original sales amounts won’t be on monthly statements.
Whether payment processing statements are all-in-one or separate for different sales channels.
Whether there are additional monthly fees and minimums.
Want to read more articles? You can find our latest article on retail shrinkage here
It’s no secret that retail is no longer a one-step shopping experience. Customers want the flexibility of taking their in-store experience online and vice versa. In 2020, Walmart responded to the global pandemic by improving their omnichannel experience and adding more square footage to their stores for online order fulfillment. This helped them achieve a 97% spike in e-commerce sales.
A study by First Insight showed that customers in many categories still prefer in-store shopping versus buying online. In particular, the study showed that over 70% of shoppers are more likely to make impulse purchases or buy more in store, because of the merchandising and customer experience.
It’s just that the pandemic has made it more likely that the customer journey starts online, even if the actual purchase happens in a physical store. As such, for traditional merchants, it’s not about whether customers are shopping more online or in-store. It’s about needing to serve customers across multiple channels, often at the same time. This is why the entire omnichannel shopping experience is increasingly important.
But if you’re a traditional retailer just starting out in this brave, new world, where do you start? Changing store processes to serve omnichannel shoppers isn’t something that can happen overnight. This is where “clicks-to-bricks” strategies come in.
Clicks-to-bricks simply refers to strategies that focus on using “digital storefronts” or “pre-shopping discovery” online to drive foot traffic into stores instead of encouraging customers to mainly shop online. Even if you offer delivery, there are a lot of benefits to focusing on store-driven online shopping.
Top 5 Advantages of a Clicks-to-Bricks Strategy
It maximizes local awareness of your business online. During the pandemic, a lot of businesses focused on selling online and neglected the fact that store shoppers also start their buying journey online. Whether it’s checking store hours or stock availability, being found online is key to offering a smooth customer experience. The easier it is for shoppers to find you online, the more likely they are to purchase from you as compared to some of your competitors who may not be as easy to find.
It increases sales per shopper. Shoppers buy more when shopping in store. Retailers want customers to buy in store because they are more likely to make additional impulse buys with higher margins. If store products are linked to online search with tools such as Google’s See What’s In Store (SWIS) or Local Inventory Ads (LIA), you’ll get store shoppers that walk in “ready to buy” as they already know what you carry and have on your shelves. In fact, helping customers “pre-shop” or “discover” products online can drive more traffic to both physical and online stores. This will increase overall sales per shopper as you’re able to serve shoppers in multiple channels.
It maximizes profitability. Besides bigger basket sizes, using online awareness to drive higher quality foot traffic to your store means that you’ll be spending less in marketing for higher sales. If you use omnichannel tools that link your store data with online research, you can even save on the cost of having employees or agencies manage your product information online.
It gives you useful customer insights. Connecting with customers on multiple channels means more opportunities to gather information about your customers. Whether it is an email address or a physical address, having more data increases retailers’ insights into their customers and their buying habits, making marketing easier and cheaper over time.
It gives you useful inventory insights. Knowing what sells well on which channel allows retailers to sell and target specific segments when releasing new products or product lines.
The bottom line is, you want to make a profit with your business. This means selling products and services that customers want and are willing to pay for at the price you are selling. Finding that point can be confusing to many business owners: balancing margins and finding out the going market price are things to consider before releasing a new product. The wrong strategy could lead to large financial losses; we have created a pricing guide to help retailers get to the other side and find the right pricing strategy for your business.
This is the most straightforward way to determine sell prices. This method is not related to market pricing and sets prices based only on actual costs. In this case, retailers estimate all fixed (e.g. purchase cost) and a share of variable costs (e.g. overhead costs that you have to pay even without any sales such as rent, payroll or utilities) to determine the sell price of a product. This method is most commonly used in product categories that are highly competitive where market prices are relatively known. Staple products or commodities are common examples.
Instead of adding the actual overhead cost of the business, cost-plus pricing is a lot easier to calculate as it assumes a specific fixed markup percentage to a product’s purchase cost. For example, some merchants will simply multiply the cost to buy a product by a factor of 2x to 3x. This is called the price markup. While this method is much easier to use, it is important for retailers to make sure that the markup percentage is enough to meet your target rate of return (profit) and to periodically review the markup to make sure that it is still suitable.
Value or market-based pricing
This is the most common method in industries where the perceived value of a product is highly driven by emotion or lack of availability such as fashion, art, luxury cars or concessions at sporting events. Essentially, this method sets prices mainly based on the perceived or estimated value of a product or service to the customer rather than according to the cost of the product or historical prices. This is commonly used by retailers with deep understanding of brand building, market pricing, managing exclusivity and valuing the benefit to a customer versus how much she or he is willing to pay.
While market-based pricing is constantly changing, and therefore more sophisticated to manage, with newer technology, it is increasingly possible for retailers to incorporate value-based pricing into their pricing strategy to avoid “leaving money on the table.” It’s also worth pointing out that the increasing number of merchants going online has also made pricing in some categories more transparent which increases price competition and can drive pricing lower. It’s why many premium brands enforce MSRP on their online retailers (e.g. Apple) and more merchants are selling their own branded products online today as these categories are the most likely to be successful since supply can be more easily controlled and substitutes are less available.
Introducing new products into the market by lowering price is a strategy that some retailers use to introduce their products into a saturated market. This is a good chance to build brand loyalty and to get new customers to try your products.
Although it may seem intuitive to jump into the market with this strategy to gather as many customers as possible, this strategy does have some drawbacks. Raising prices (after the initial release) often leads to some reluctance from customers, so proceed with caution.
Sensitivity to price changes
All of the pricing methods above should not be applied without considering whether a product is price elastic or inelastic. Price elasticity refers to how sensitive price changes will have on the demand for a product. For some products, demand will change significantly if prices are changed and vice versa. A classic example is grocery store bread. Unless brand loyalty is strong or there is a special product feature, bread pricing tends to be elastic: as price increases, the demand will decline.
Price elasticity is useful as it gives you a sense of how much you can adjust pricing without significantly affecting the demand for your product. It’s important to remember that many products have category thresholds. This means that even if you sell an product that is price inelastic or not sensitive to price changes (e.g. luxury purses), the market will have a perception of the maximum a buyer is willing to pay.
Similarly, it is important to remember that demand sensitivity is also impacted by the availability of substitutes or competitors. So if you sell in a category that has a lot of competitors with similar alternative products, the demand for your products will most likely be more sensitive to price changes since it’s easier for your buyers to find replacements.
Want to read more on how to manage inventory effectively?