I believe that the latter is the case. Of course, the pandemic posed enormous challenges to brick-and-mortar retail –and still does. But as a sales trainer, I have observed for years that the real crisis in retail comes from within: it started long before the pandemic and is now only becoming apparent more quickly.
What customers appreciate about the high street...
Consumers in Germany still see clear advantages in shopping in actual shops. This was demonstrated in 2020 in a study commissioned by Sickel & Team from the German Institute for Marketing. The most frequently cited advantages include checking the goods on site (52%) and direct availability (28%). Customers also appreciate the fact that they can get advice from the sales staff (23%).
…and what the high street makes of it
Getting advice from sale staff is a factor that shops do not sufficiently exploit as a unique selling proposition. Retailers mainly try to score with prices, availability and a large selection of brands. These are all aspects that do not make individual shops stand out from the rest of the competition – and certainly not from online retail. If price and the range of goods play the most important role, shops become interchangeable for customers. They lose touch with them and drift away.
3 challenges of brick-and-mortar shops
Retailers are trying to counteract declining sales with selective training courses. They, however, bring little to no improvement, because it’s often a firm foundation that is lacking: companies lack defined values, qualified staff and clear customer experiences – to name just three aspects.
1. A lack of values and unique selling propositions
A recent case study conducted by Sickel & Team shows that in only 29% of the retail companies analysed does the management have defined corporate values and embody them. Only 17% have defined one or more unique selling propositions and communicated them to their employees.
It’s no wonder then that only 16% of sales staff are aware of the company’s objectives and act accordingly. This has an impact on the entire company and its customers: if corporate values are not embodied or are completely lacking, this weakens the DNA of the retail company.
2. Well-qualified sales staff
It’s not only values that are sometimes lacking! The sales staff is also a weak point in many businesses – when it should be their absolute strength! The case study shows that there is a defined onboarding process and induction plans in more than half of the companies considered (53%), and usually also training to ensure the quality of induction (48%). However, the management gradually loses direct contact with sales staff and the processes are monitored and followed up less than before.
Only a quarter of sales staff (25%) know their own strengths and weaknesses, among other things through feedback discussions. And only 23% have the chance to continuously work on their strengths and weaknesses. Moreover, due to the lack of values, people often simply sell according to a fixed "pattern". Routine behaviour sets in, and customers feel unappreciated and drift away.
3. Greater customer loyalty
If the retail sector wants to survive, companies have to win back their customers and retain their loyalty. Retailers are there to enrich the lives of their customers and to offer them a memorable experience.
Here, too, the companies’ lack of values becomes apparent: without values, retail companies struggle to develop appropriate customer experiences. In fact, only 14% of the companies surveyed in the current case study offer a customer experience that matches their corporate values and USPs. A lack of customer experiences means that retailers become interchangeable for customers. The decision whether to buy from you, the competition or online becomes a matter of luck.
Tip for the future: be more than just a mere retailer!
At the talk in the Toy Business Forum at the Spielwarenmesse® on 6 February 2022, you will learn from me, Christian Sickel, how you can tackle these and other challenges for your company. It’s going to be all about values and unique selling propositions as the grass roots of companies, the impact of leadership and the involvement of employees as well as active customer loyalty measures. I will tell you how you can become more successful in these areas with a few simple means.