Todays’ local newspaper carried the sob stories of a handful of local shops that have folded due to the unfair competition from online shops, with bitter complaints about how the local brick and mortar shops are used to view and fondle items before ordering online. The underlying tone is that this is really awfully unfair and that we consumers need to step up and support our local shops.
I find this stance rather provoking, and also a bit of a challenge, so I thought I’d do a short piece on what the problem is, and how local non-online shops may go about fixing their situation and surviving in the future. I think we can agree right now that whingeing about disloyal customers is probably not the way to go about it. I’ll limit the scope of this piece to clothes shops, ok?
Let’s start at the evil end of things: The online vendors.
Online shops starting arriving in the mid-90’s, when the web started gaining momentum. Early efforts were more painful than successful. It’s taken quite a while for vendors to find their legs, so to speak, but nowadays we have quite a large number of successful online clothes shops. Obviously, from a shops perspective success is measured by profit margins, but how is an online shop a success from the viewpoint of the consumer?
First, what disadvantages does an online shop face? For starters, they don’t physically meet their customers (although this may also be considered an advantage). They are only able to present their goods in the form of visuals and text. They need to ship orders out, and handle returns coming back.
What advantages do they have? There are obviously savings to be had in infrastructure, i.e. no expensive shop leases and no need to be situated centrally. If they reach a sufficient size they may be able to gain better deals on buying in stock. Apart from that though, they need good staff to make the virtual shop space, they need staff to handle orders and returns, man the phones and reply to emails. And handle buying stock the same way that regular shops do so.
So where are the traditional local shops losing out to the online retailers? From a consumer perspective the advantage is purely down to price and availability. If you spend time looking around online you’re bound to find what you want cheaper, and now that the larger retailers have worked out that customers require properly executed mechanisms for dealing with ordering, delivery and returns, the process has become a lot more painless than it used to be. Yet, for all its flash, the online experience is still lacking in soul.. The really good web-shops are few and far between. A question of it being difficult to create a truly singular shopping experience, I think. You may take better photos, be more lyrical in your prose, or have curated a more exceptional selection of saleable items, but you’re still just pixels on a screen.
How can the local shop possibly compete against the might of the multi-national online emporium? Well, for starters, get personal. You have a huge advantage in that you have the customer actually entering your shop. Don’t abuse that advantage be not treating your customer well. I’ve written about this previously, you may like to read it here. Does the online shop greet their customer with a warm smile and an offer of coffee? Does the online shop allow the customer to feel the quality, try the items on, and take them home right away? Hardly, and there is value there.
Physical shops with physical customers can create relationships in ways the online shops can only dream of. Create a mailing-list for regular customers. Arrange viewings of new collections; invite the customers to come closer. Make your customers feel that you value them and appreciate their custom. I quite often wonder how a shopkeeper can possibly imagine that customers will want to shop with them, when they have an indifferent or ugly shop, arrogant and ignorant staff, and a selection of stock that would impress no one. It’s as if they want to go out of business, yet they have the gall to whine about how online shops are killing their business.
Start your own online shop. It doesn’t need to be huge or complicated, just make your stock available for people that can’t visit in person. Several times I’ve spoken to shopkeepers of really great shops and they all say the same: I wish I could have carried more special stock, but the customers here in town are just not adventurous enough. When I suggest that creating an online presence would open up a much larger customer potential, the reply is: Yeah, I’d like to, but it’s such a huge venture and I can’t possibly cope. Sorry mate, you’re very likely doomed with an attitude like that. Plus, setting up a small online shop today is really no big deal at all, and costs very little to get going. How can you not afford to give it a go? Ok, it will work getting started, but if it works out, you have another leg or two to stand on, plus it’s great promotion as well.
And speaking of promotion, how are you doing on the old social media front, my friend? Set up a Facebook page 3 years ago, forgot to look at it since? Maybe tweeted a couple of tweets last year, mislaid the app since then? You may look at social media as a total hype and the province of tweeners, but it is huge. And your customers are there, on one platform or the other. While the social media of the month may change regularly, the grown-ups are still on Facebook, so you need a page there. The kids are on Instagram, so make sure you keep up a stream of photos there. Twitter is the home of the brief messages, but how much effort does it take to publish 140 characters?
My recommendation is to do it by blog. Create an account of Tumblr, publish good photos of your new stock, use your own staff to create that personal recognition factor, do your own outfits to show off your styling prowess and link it in to your online shop, so people can see, need and buy. Or stop by your physical shop to say hi, have a coffee and try the pieces on. And then you publish the link to the Tumblr post to your Facebook, Twitter and Instagram almost automatically. Not really all that much work and the payoff should make it well worth the effort.
And prices. Yes, you’ll probably need to look at them as well. Not necessarily drop down to the level of the online vendors, but at least not obviously be overcharging. Overcharging only works when your customers can’t compare prices, but today’s consumers are savvy. Become known as the place that charges the inflated prices and you’re really going to have to compensate heavily to make up for ut.
In summary, if you thought you were going to survive today by merely whining about the loss of custom to the online shops, you’re dead wrong. You need to at least go down fighting. If you think you’ll stay alive by being arrogant and ignorant, well, you might as well close up shop already. It took the online shops years to work out how they could get an advantage; in the meantime most of the regular shops were sleeping in class.
Was this of any use at all? I’ll gladly accept donations by PayPal, but promise to spend the loot locally. Thanks!
Oh, and in case you missed the linked to my related piece, here it is again: “Are you being served?“