People know about big-name retail companies such as Walmart or Target. These big names sell various products, but they don’t create those products themselves. This is possible through a retail marketing business model, which follows three steps:
- The retailer purchases and sells products from businesses.
- The retailers advertise those products to customers.
- Customers come into the store and buy those products.
Many stores follow this model to make money and to get products to customers. While people think of physical stores as retailers, they forget that online websites can be retail stores as well. One of the most popular retailers, Amazon, makes sales through their website. With so many companies falling under this definition, you may wonder what counts as retail marketing.
What is Retail Marketing?
Retail marketing definition refers to the entire retail process. The retail store purchases items from a business, the retailers promote and sell the item in their stores, and customers go to buy those products. This allows each group to receive benefits by making money, reducing hassle, and providing products that customers want.
While this process may seem simple at first, it requires more work and effort than most people would initially think. Even though the businesses and the customers are involved in the process, the retail store works as the intermediary for customers and businesses.
The retailer works between the customer and businesses because they all rely on each other to get what they want.
- The retailer makes it easy for the customer to get their products.
- The retailer sells the products so that the manufacturers don’t have to worry about setting up a store.
- The retailer generates revenue from sales.
This allows each to benefit from the other, as well as keeps each part of the chain happy.
This is what establishes a retail market: the retailer works with both sides to keep them connected. It allows everyone to succeed and to accomplish their respective goals. While this does occur, what does a retail market do to accomplish these goals?
How Retail Marketing Works
Since retail marketing brings products to the customers, they have to work with both sides to succeed. This requires a lot of effort from the retailer since they need to get the product, advertise it, and sell it to customers. It happens through the four Ps: product, price, place, and promotion.
Product involves the different aspects of a product. Does your retail store sell it in different colors? What about different sizes and amounts? Customers will need to know this since some may want a specific version of a product. Provide different versions of a product, if available, to give customers variety.
As you sell these products to customers, you need to set an appropriate price. This means that you need to make it high enough that you make a profit from the purchase, but low enough to compete with other retailers and increase your sales. As you find this balance, you will make more money.
You also need a place where the customers can purchase these products. This can be an online or a digital store. Each provides advantages that you should consider. For now, make sure that customers know where they can buy the products so that they will go to that place.
Finally, you need to promote your retail store through advertisements. Keep your customers informed about a store opening and other changes. Let them know about any upcoming deals through online and physical advertisements. As customers see your business more and come across ads, they are more likely to go to your store.
Physical vs. Digital Retail Marketing
As explained earlier, you can go the physical or digital retail marketing route. This will depend on the type of business that you have and which pros work alongside your retail store. While many retailers go the physical route and have success, the digital market continues to grow. As a result, you can’t ignore online presence anymore.
Source: Statista.com, 2019
As online retail and ecommerce continue to grow, they make more money in the U.S. With this constant growth and improvement, retailers can survive and succeed online. Keep this in mind as you make your decision. Both can work since the internet will continue to grow as a marketplace.
Online retail marketing has multiple benefits.
- Customers can make a purchase from their home.
- It becomes easier to integrate omnichannel marketing into your business.
- It makes the purchasing process quicker for customers.
However, remember that physical retail stores also have advantages.
- Customers can look at products in person.
- You can talk face-to-face with customers about problems and questions.
- Customers will buy more at once to avoid multiple trips.
Depending on your retail store and how you want to handle things, consider both physical and digital retail marketing. Choose the one that makes it easier for your customers.
The Benefits of Retail Marketing
Retail marketing, whether online or offline, allows a business to enjoy many benefits. This goes beyond making money, since a business always seeks to increase revenue. Besides making a profit, these benefits occur because of retail marketing.
- Building up a network with other businesses.
- Gaining customer loyalty.
- Collecting customer data.
When you get into retail marketing, you establish connections with other businesses that manufacture the products you sell. This allows you to network, find more businesses, and continue to grow your business.
As for customers, they won’t associate you with a product. For example, if a customer becomes mad at a business because of a product, they won’t project it onto your store, even if you sold it to them. Customers disassociate your business from the products, which works as an advantage for you.
As you continue your retail marketing, you can collect data about your customers and products. Pay attention to details and continue to collect data such as popular products and traffic. This will help you to improve your store and to adjust it according to your customers’ needs.
As you work in retail marketing, you can gain these benefits. They provide you with a way to improve your store while maintaining strong relationships with both businesses and customers.
Online Advertising for Retail Marketing
Retail marketing requires advertising to succeed. If customers don’t know about your business, products, or how to order from you, then they have no reason to make a purchase from your store. Give them a reason by providing them information through different channels.
Source: eMarketer.com, 2019
Based on current statistics, companies spend more money on digital advertisements each year and it will continue to grow. This is because businesses realize that most people go online daily. By creating digital ads, more people will come across your company, which increases the odds of those people going to your store.
You can use different approaches for your advertising to draw in more customers. You can always start with an email newsletter. This allows you to inform customers about deals, invite them to visit your website, and include other information that they will appreciate. You can even set up automated emails to make things easier for you.
Many people use social media, so you can set up social media pages as a place for customers to get information. Post updates on there and advertise your store. Each time you make a post, your followers can easily access the post to see what you want to tell them. This allows you to easily communicate with customers while advertising to them.
You can always seek out different ways to advertise to your customers so that you can reach out to more people. Test out different methods and see what your customers like the most. This will help you to entice them and encourage them to visit your store.
Retail Marketing Strategy
Every retailer needs a retail marketing strategy. This means that you establish a plan to keep the business going while helping it grow. Your strategy will change depending on your business’ size, the number of employees you have, and your customers’ preferences.
First, you should communicate with your employees to establish an effective strategy. Let them know what you want them to do so that they can focus on it and stay on top of things. If you give them a goal and explain the strategy, they will understand what you want and work towards that goal.
As you apply your strategy, collect data about your customers. They will react to changes in different ways. Ask yourself some questions.
- Did my customers have a positive or a negative reaction?
- What caused their reaction?
- Was my strategy more effective before or after the change?
As you ask yourself these questions, you can gauge customer perception of your retail strategy and any changes to it. If they like the changes, continue to use them. If they don’t, then try something else that might work for them. Your customers have expectations from your business, so discover those expectations so you can meet and exceed them.
After collecting customer data, you can improve your retail strategy based on criticisms, reactions, and other information that customers share with you. It’s a constant process of improving your strategy according to your customers’ needs.
You don’t use a retail marketing strategy one time and then never return to it. You need to constantly plan, execute, and adapt to build your retail marketing strategy towards one that appeals to your customers. Continue to apply different strategies and tips so that you can meet the expectations of your customers.
Your Next Step
Retail marketing remains a key part of many people’s lives. Since it has increased its reach to the internet, it continues to grow and allows businesses to rise up and succeed. As you apply different retail marketing strategies, you can improve your business while overcoming problems.
Even if you come across different problems, you can continue to adapt to minimize and overcome them. Don’t give up and focus on making your retail marketing strategy better. As you do so, you will increase your customer retention and your sales.
Customers establish a special relationship with retail stores. They become loyal to those that they like and that meet their expectations. As you increase your customer retention through your email marketing, you will gain customers that will return to your store regularly. This will naturally lead to success for your business.
This article was originally published by our friends at Omnisend.