“It’s interesting,” says King. “When you go through the purchase-decision cycle that a consumer makes before buying something, it’s shifted dramatically in two decades. It used to be almost totally brand oriented. Today, it’s a combination of brand but with a lot of new influences, [such as] online influences and influences from social networks.” He further explains that this shift has weakened brand loyalty, making consumers more open to options and thus susceptible to a value focus.
But knowing who is especially partial to value and who is not, and which of the two represents a retailer’s customer base is going to be essential to a thriving retail business, experts concur. King emphasizes that classic middle-of-the-road businesses that sell average products are now taking a beating, profitably speaking, as the consumer pool increasingly splits distinctly between wealthy shoppers and buyers looking specifically for value. As a result, successful businesses will have to determine what end of the value-luxury spectrum they are catering to.
“It’s really important that retailers know their customers, their base,” says Goodfellow, “what drives people into their stores and who those people are.” She suggests that retailers take advantage of a customer or email list to connect with their customers to keep them for the long term. “What is key right now is for retailers to make customers feel good about spending in their stores and to make them feel appreciated,” she says.
Grant concurs that though retailers have the upper hand right now, they should not get comfortable. The relationships they build with customers right now may be the single most important determining factor in the future of their businesses.
“While business is doing well right now, [it is important that retailers] recognize the importance of staying in tune with the fact that consumers are still really cautious. It’s not a time to get comfortable,” advises Grant. “It’s a time to engage and continue pulling out every stop to make it work and in building relationships with consumers. Those relationships sometimes will be the difference in why consumers reach out to one store versus another, one brand versus another. So retailers finding ways online and in-store to build a relationship is going to be important.”
Manyesha Batist is editor and online editor of Beauty Store Business.