Traditional ways of doing business are under threat for retail companies—but it’s not all doom and gloom. With the right approach, you can counter the potential negative impacts of changing demographics, technology, and behaviors in the consumer sector to capitalize on this shift.
In part one of our two-part series, we look at how diversifying your sales channels and embracing digital tools can help traditional retail companies get ahead.
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Driving digital transformation in the retail industry
Businesses that embrace multichannel sales in both the B2B and B2C markets can drive growth by expanding their existing customer base. Likewise, selling on new channels like Amazon opens your business up to a whole new subset of customers who may otherwise not know you exist.
For digital-first B2C brands, expanding into the wholesale market might seem a little daunting. However, selling to other businesses can reveal new revenue streams that you might not have realized before. Wholesalers can enjoy larger order sizes and repeat purchases—but it’s important to effectively manage your inventory so you can meet and monitor the demand for your product, no matter the buyer.
Product bundling, upselling, and cross-selling your existing customers can also open the door to increased revenue, while also helping your customers see your brand in a new light. As more brands emerge in an already busy market, it’s more critical than ever to maintain multiple revenue streams.
Consumers of all ages are actively seeking out the convenience of online purchasing. According to KPMG, Baby Boomers and Gen Xers are shopping online just as often as their millennial peers. Baby Boomers make, on average, 15.1 transactions per year, while millennials make an average of 15.6 transactions online a year. Gen Xers are even more active, making an average of 18.6 online transactions each year.
The B2B market is especially ripe for innovation when it comes to embracing digital technologies. Wholesale buyers are bringing their personal, digital-focused B2B buying habits into the B2B sphere and expecting a sophisticated buying experience. As such, businesses that can offer wholesale customers a personalized eCommerce shopping experience and hassle-free purchasing options stand to see the strongest growth.
Similarly, leading digital-born micro-brands are turning their attention to artificial intelligence (AI) and augmented reality (AR) to optimize the shopping experience for consumers, such as allowing buyers to virtually try on makeup before committing to a purchase. In fact, L’Oreal recently purchased the leading AR makeup provider, ModiFace, so they can better leverage people’s interest in the intersection of AR and cosmetics.
Photo credit: Sephora
What’s more, businesses can use the data they collect from these AI and AR tools to inform their future strategies. With these innovations, brands can more easily understand what their customers want and work to bring these products and services to the market in the most effective way possible.
In part two of this series, we look at how streamlining operations and focusing on community and customer relationships are key to success for retail brands.
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