While the COVID-19 pandemic brought an unexpected rise in sales for many retailers, today's economic climate has changed things. With inflation on the rise, labor shortages persisting, and even a potential recession looming, consumers are shopping less and are more money-conscious than ever, especially when it comes to retail prices.
According Mirakl's 2023 State of Online Marketplace Adoption report, 43% of respondents stopped shopping with specific retailers because of rising prices. What's more, nearly three-quarters (72%) of respondents held off on making a purchase in the last 12 months due to higher retail prices.
So in a world where today's consumers are shopping less, how are retail store owners supposed to keep their sales from plummeting? It all starts with improving your retail strategy.
In this article, we'll offer seven tips on how you can improve your sales strategy and keep your competitive edge despite the challenges of today's economy.
Looking for more ways to recession-proof your business? Watch our webinar: "Three ways to prepare for an upcoming sales decline"
What is the purpose of a retail strategy?
Before we dive into our retail solutions, let's talk about what exactly a retail strategy is and why it's important for retailers to have one in place.
Retail strategies, also known as retail marketing strategies, are plans you have set up to help you deliver your products and services to your target customers and raise awareness about your brand.
Your retail strategy could have many different elements, including staffing, pricing strategy, finding a location for your physical stores, marketing tactics, window displays, and anything else you do to drive potential customers into your store.
The ultimate goal of having retail marketing strategies set up is to enhance the customer experience and drive sales. Getting a strategy in place sets your business up for success and formalizes your business model.
Seven tips to improve your retail sales strategy
1. Know your audience
When it comes to driving sales in a turbulent economy, it's important to know who your customers are and what motivates them to buy.
If you're a luxury retail brand, chances are, your target customer isn't going to be impacted nearly as much by inflation or rising prices than the average shopper. These customers are essentially "recession-proof" and don't need or expect you to dramatically alter your business model, even during a pending recession.
However, if your customer base is on more of a budget, your marketing plan for this audience will be very different. Offering discount pricing will reassure these buyers that they're getting a good deal and will be far more likely to buy.
2. Create an excellent customer experience
No matter what your customer base looks like, everyone wants an excellent customer experience, especially if they've made the effort to come into a brick-and-mortar store. And they're willing to pay more for it, too.
Data from a PwC report found that U.S. consumers are willing to pay up to 16% more for a product or service if the business offers a great customer experience. So if you're worried about meeting your sales goals, focusing on a personalized customer experience is key.
3. Start clienteling—if you haven't already
Clienteling, also known as retail clienteling, is a strategy where retailers build genuine relationships with key customers in an effort to retain them long-term.
If you haven't heard of clienteling, you may be doing it without even realizing it. For example, if you take notes about key clients, keep a client information sheet, or follow up with clients with product recommendations, that's clienteling!
Clienteling is an excellent retail solution to fight inflation because it builds customer loyalty, encourages customers to come back and shop with you again, and spend more when they do.
According to the Business Impact of Personalization study, shoppers will spend up to 40% more than they would have otherwise when they identify their shopping experience to be highly personalized.
4. Invest in retail technology
Next, if the labor shortage is making it hard for you to hire more sales associates, using retail technology can help you make the most of the staff you have.
For example, clienteling software takes all of the clienteling activities we mentioned above and helps automate them. So rather than manually taking notes on a daily basis and shuffling through papers to find the client you're looking for, you can create client profiles that are easy to filter, sort, and tag.
What's more, you can get automated reminders for when to reach out to a client, build personalized wish lists for clients with items you know they'd like, and even send text messages with product recommendations.
5. Pay attention to what your competitors are doing
The uncertainties of today's economy impact virtually all businesses, including your competitors. So taking a peek at how they're handling it can give you insight into retail solutions you hadn't considered.
This could include signing up for their customer newsletter to learn more about their marketing plan, seeing if they're offering any discount pricing, joining industry-specific Facebook groups they're also on, or simply walking by their store to view their window display.
Of course, there's no need to replicate everything your competitor is doing simply because they are. But if you're noticing trends in what your customers expect from you based on what they've experienced elsewhere, it may be worth a try.
6. Get feedback from your current clients
If you're wondering how your current clients are handling everything that's going on today—and if it's changed their spending habits—don't be afraid to ask them.
Getting client feedback on what products they want in stock, how your customer service is, and what their expectations are when they come into your store can help your improve the overall experience for both your current customers and help you acquire new ones along the way.
Whether that's sending out a survey via email, putting up a poll on social media, or simply talking to your shoppers when they're in your store, you'll find what works best for you and your business.
7. Never stop training your sales team
Finally, never stop looking for ways to improve, especially when it comes to your sales team's performance. Are they following up with customers after they've made a purchase? Does your team know about clienteling and how to do it? Have you hosted training on how to use technology tools to make their lives easier?
Making sure that each of your sales associates and managers have the tools and training they need to be successful is more important than ever when you're expecting a decrease in foot traffic. Ensuring they know how to make the most of every customer interaction will increase retention, drive sales, and improve your overall customer lifetime value.
Retailing in a recession can seem daunting, especially after coming down from the high that many retailers experienced during the COVID-19 pandemic. But your sales don't have to fall just because of the times we're in.
Following the tips in this article will allow you and your team to build lasting relationships with your clients and continue to meet your sales goals month after month.
If you're ready to see how using clienteling software can help, schedule a personalized demo with Clientbook today to see our product in action.