CNBC reported that Best Buy is the latest retailer to announce that it will close its stores on Thanksgiving Day. For the second consecutive year, Black Friday deals will be offered online by the company. Best Buy joins an increasing number of retailers who are sharing holiday season plans. Target and Walmart will also close on Thanksgiving Day.
Black Friday was the traditional day for holiday shopping. However, retailers have been encouraging consumers to shop earlier, offering discounts in-store on Thanksgiving Day. The pandemic changed consumers’ shopping habits. Many opted to shop online and use curbside pickup. As a result, companies began offering discounts to customers online.
We don’t yet know what Best Buy’s plans are for Black Friday. However, millions of customers were able last year to shop online and pick up at curbside via Best Buy’s ecommerce site.
Total Retail’s View:Opening shops on Thanksgiving Day has been a topic of heated debate between retailers and store employees for many years. Some argue that the stores should remain closed throughout Thanksgiving so employees can spend more time with their families. Massachusetts and Maine have passed laws that prohibit big-box retailers opening on Thanksgiving. Retailers were not willing to refuse holiday shoppers who wanted to start shopping for Christmas, even though it was Thanksgiving Day. Customers, associates, and retailers would all benefit from Best Buy’s decision to close its stores on Thanksgiving and instead use the e-commerce site. Customers will still be able to shop as usual, while store associates will get a break during the holiday. Retailers will also still reach their sales goals.
It’s time to refine your value proposition, retailers
Retailers are facing a difficult time. According to a recent UBS report, 80,000 retail stores could close in the next five-years as the massive rise in online shopping caused by the pandemic leads to a permanent consumer buying behavior. UBS expects that the e-commerce market share of total retail sales will grow from 18% in 2020 to 27% by 2026.
These projections are creating anxiety in the retail industry. While those who rent or own real estate for a store might have increased their ecommerce operations to keep it afloat during this pandemic, they are now wondering what the future holds. It’s time to redefine your retail value proposition, whether you have a physical store, an online one, or both.
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How to Deliver Value to Customers
While retailers have been adapting to changing consumer behaviour for years, the sudden shift towards online shopping caused by COVID-19 is unprecedented. The virus swept away geographical boundaries in a way that will continue to reverberate long after it is under control. Retailers must rethink how they use commercial real estate.
Begin by understanding how your customers value you. Is your store a reliable distribution center that can handle the pandemic? People are buying online, so you need to get products to them as fast as possible. Focus on efficiency if so. If efficiency is your superpower, you can focus on home delivery, curbside pickup, or any other distribution method.
Perhaps the value that you offer is more experiential. Customers come to your store for an intimate experience that will last a lifetime. Focus on this even if you have increased online sales in the midst of the pandemic. It doesn’t matter what you do, as long as you know your customers and can deliver it effectively, you will thrive. Post-pandemic, there is no one-size fits all approach to customer service.
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One brand, multiple distribution channels
The notion that in-store and online purchases are distinct is another issue. Although the revenue streams can be reported separately in certain operations, in-store and online sales may be under different leadership. Customers see it all as one brand and they need to be able to identify any differences.
This isn’t a new problem. One example of this is a large department store where a customer tried to buy an item in-store at a lower price online, but was told that they would be better off ordering online. This might be a good idea for store bean-counters, who separate overhead costs for in-store and online operations. But it can be frustrating to customers.
Instead of trying to cannibalize sales from different channels, find out why your customers choose your store. This could be via e-commerce or in-person visits, or both. To show that you are a single brand with multiple distribution channels, align your revenue reporting. Your communication with customers must be consistent across all channels and reflect the brand’s value.
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Concentrate on the Places You’re Already Wining
The pandemic’s economic storm has not been a disaster for stores that survived. They have managed to stay in business. It’s now time to evaluate what this means for the world after the pandemic. Are you winning because of how efficient you distribute products or services? Keep delivering on your promise to customers because it resonates with them. Calculate the margins between curbside pickup and shipping. If one is the winner, it’s time for you to fine-tune your efforts. This is the time to ask and answer critical questions about your customer service and how it could be improved.
You might have achieved success by creating a personal in-store experience that customers enjoy. For now, you are keeping people safe by setting appointments or limiting capacity until everyone is back. You can be an experiential provider of value to customers, so take advantage of that success and keep innovating to ensure customers return, even if there are limitations to your capacity.
No matter what the future holds, customer service and the retailer’s value for a customer will remain a core component of the retail sector. Retailers that have an impact on customers’ lives whether they are in-person or online will be successful because they know their value and continue to improve their offerings. Retailers can create lasting relationships with customers by engaging on their preferred platforms, offering services in formats that suit customer needs, and providing seamless customer experiences across all distribution channels.