The retail industry is based on a B2C model, whereby it sells products and services to consumers. Retail marketing strategies are aimed at developing and retaining the interests of existing and new customers. The type of strategy chosen by a retailer depends on the product or service they are providing and the audience they are catering to.
The retail marketing strategy for any business is a well-structured combination of advertising and communication tools. It is essential for businesses to understand the importance of adequate time in developing their marketing strategy, as it directly impacts the business’s revenue-generating capability.
Components of Retail Marketing Strategy
The most commonly used retail marketing strategy is the 4P’s. This includes:
- Product: Retailers can carry a single or multiple types of product inventory that can be anything from machinery, appliances, clothing to groceries. Alternatively, retailers can also be selling a single or combination of services as their product.
- Pricing: Pricing is one of the most crucial elements of the retail marketing strategy. It impacts both the customers and the business owners. The price of a product needs to be seen as affordable for the consumers and cover the costs the business incurs in producing them. Any retailer can choose from one of the 4 different types of marketing strategies at one point in time, and they can change their pricing strategy to suit the market dynamics. The 4 pricing strategies include:
- Everyday low pricing: When a retailer is using this pricing strategy. they try to undercut the competition by offering lower prices than them and keeping their profitability margins really low. This is common with budget stores like Target.
- High & Low pricing: The retailer begins by charging a high price for the product when newly introduced but reduces it later when the product loses popularity. This gives the customer a new reason to purchase the product than just its features.
- Competitive pricing: This pricing strategy of a retailer is linked to the pricing of its competitor. The retailer who uses this pricing strategy has previously used the high & low pricing strategy.
- Psychological pricing: This pricing strategy is aimed to make the consumer perception that the price is actually lower than what it is. A pricing of $6.95 is seen as being closer to $6 as compared to $7 even though it is the opposite. This increases the chances of a consumer making a purchase than if the same product was priced at $7.
- Place: This is the actual place where the transaction takes place with the customer. This does not always have to be a physical location, it cannot be a virtual location like an online E-commerce store.
- Promotion: These marketing and advertising activities are undertaken to make the product more appealing to the customer. Some of these are direct marketing, in-store marketing, digital marketing, and endorsements. Every marketing activity undertaken has a cost and can have retaliation from the competition. Therefore, this has to be a well-thought-out decision.
7 Retail Marketing Strategies to Get More Sales
There are certain retail marketing strategies that tend to yield better results than the others. These include:
- Ensure your presence where your customers are: Prior to cementing your marketing strategy, it is essential that you profile them in a lot of detail. This would include, but not be limited to their demographic characteristics, buying behavior, lifestyle, and preferred location of shopping for your products. You should spend your marketing budget on locations where your customers shop frequently. If you market your products on E-commerce channels and your customers prefer shopping in the physical store, then your marketing spends would be a waste.
- Try to maximize the use of your existing assets: The use of existing assets is the best starting point for your retail marketing strategy. If you already have an established store, you have multiple options to implement your marketing strategy. These would include window displays, using the curbside to place standees, and realize that your employees are your best marketers who need to be motivated.
- Capitalize on the social media potential: Social media channels have a massive reach at a very affordable cost. Some of the most commonly used social media channels include Facebook, Instagram, and Pinterest. You can use paid marketing on Facebook to gain visibility or join groups relevant to your business. You can also market but capitalize by producing unique content on Instagram and posting content on your stories.
- Include SMS Marketing in your plan: SMS marketing has one of the lowest costs of marketing per customer. A very small SMS marketing budget can get your business a massive reach along with high chances of conversion. On an average, people use their phones more than 4 dozen times a day. There is no better way to reach your customer than marketing to a device they have in their hands.
- Product used in the display: Customers always prefer seeing the product being used since it helps them make a better decision pertaining to the product purchase. It is tougher to make a decision just based on pictures and static images.
- Enter into strategic partnerships: Synergy effects trickle down into businesses that enter into strategic partnerships with other businesses based on similarity in geographical terrain, customer portfolio and ensure they give back to society in the form of CSR.
- Tap into influencer marketing: Customers find it more relatable when they see a beloved celebrity endorsing a new product or a service. This greatly increases the chances of a customer purchasing your product or service. Influencer marketing is one of the most rapidly growing channels of marketing across the globe. As a retailer, you must ensure that you are not ignoring this marketing channel as part of your retail marketing strategy.
The Retail industry is one of the fastest-growing segments of the economy at a global level. However, the components that make up the optimal retail marketing strategy tend to change over time and are specific to the product or service you are providing to your customer. As a retailer, it is essential that you are aware of the factors that impact your marketing strategy and incorporate them in executing any marketing activities.