Money is flowing in America today: GDP is growing; deregulation has freed up corporate cash; and with the crash of the late 2000s all but a distant memory, consumers are finally spending again.
For retailers, that is great news—and it couldn't have come at a better time. According to the National Retail Federation, sales during the holiday season can account for up to 30% of retailer revenue. With the end of the year looming, retailers must gear up to take their share of a massive pie, both now and in the long run.
Consumers don't just have money to spend only today, though; they expect to have more cash in the long run, too. Retailers need to both make sales in the current bull market and engender consumer loyalty so they can continue to enjoy those profits in good times and bad.
The following five tips can help American retailers make the most of this upswing in the US economy.
1. Identify your best customers
Consumers exhibit different purchasing behaviors at different stores. Some people buy only sale items from one place but pay high prices for top-shelf items at another. Figure out which customers are willing to pay face value for your products, and then focus on getting more of those customers on your site and in your store.
Lean on data, not intuition, to optimize marketing with your top customers. A/B-test different messages to see which ones resonate most strongly with your target audiences. Use that feedback to target your most profitable segments until you have even more visitors who are ready to spend.
2. Differentiate your brand
Unless you have a highly specific niche, odds are good that someone else also sells what you sell. When another company offers a comparable alternative more cheaply, don't get into a price war you can't win. Stand out from the crowd by showing customers why you deserve their business.
Modern consumers tend to look beyond products to judge the brands behind them. Take advantage of that by standing for something more than profits. REI, for instance, charges a premium for its outdoor goods but maintains the respect of its audience through initiatives such as Opt Outside, its response to the madness of Black Friday.
3. Optimize your designs
Modern UI and UX designers make great money for a reason. Good design leads to sales, while bad design limits revenue.
Invest in your online appearance by removing clutter, decreasing load times, and making your website easier to navigate. In brick-and-mortar locations, create an attractive store display to wow customers and get them interested in the displayed product (and everything that surrounds it).
4. Host an event
Slow sales seasons and big spending weekends are both perfect opportunities to host a grand event. Shy away from discount events, which limit your earning ability, and focus on more community-oriented efforts to attract shoppers.
Partner with a local charity to host a drive for donated goods. For bonus points, pick a cause that resonates with your brand, such as a benefit for impoverished mothers at a baby clothing store. Remember to attract a big crowd by inviting a DJ, advertising door prizes, and alerting the local media.
5. Create a straightforward loyalty program.
Customers love loyalty programs, but not all programs are created equal. Rather than give out hard-to-redeem awards and change your earning criteria, keep it simple by offering consistent rewards for consistent activity.
Kohl's, for instance, relies heavily on its loyalty program. Kohl's Cash doesn't activate until a few days after a purchase, but the discounts are big enough to entice customers to come back the following week (and then the next). The earning rate is easy to remember—$10 for every $50 spent during promotions or $5 for every $100 spent overall for rewards—and cashiers are trained to talk up the value of the savings at every purchase.
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Wallets are full in America. As the season of spending draws closer, retailers must act quickly to earn their piece of the pie. By following the tips in this article, companies large and small can earn customer spending this year and set the stage for long-term loyalty.
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