There are a lot of choices for customers, when it comes to shopping. Thousands of stores and a larger number of product options make it all the more difficult for retailers to attract customers. Consequently, retailers employ different methods in order to lure customers at their store. Of the methods used, some work and some don’t. For a retailer, performing trial-and-error with different methods could turn out to be time exhausting and a huge burden on expenses.
So how do retailers decide which method to use to attract customers?
We believe that there are three methods, any and all of which could be used to lure customers and drive foot traffic.
1. Use Promotions as a Hook
There is no denying the fact that promotional activities such as discounts, slashed prices and “Buy One Get X Free” are the major draw for customers to make purchases. Having the option to save money on products is a big yes for customers, and retailers can leverage that to drive traffic and build loyalty.
Take the example of Zara fashion. The anticipation with which customers line up in front of Zara stores during sale season is a tale for the ages. Customers will claw and grab what they want and the scene inside the store reminds a lawless post-apocalyptic dystopian worls. It’s simply that crazy! But, a sale like this has anticipated good returns for the brand, as not only does it increase their sales but also enhance brand awareness. Customers often talk about the sale with their friends and acquaintances and end up creating the buzz.
Financially, promotional activities like providing discounts can be a stepping stone for retailers to increase their profit margins. For example, Swedish fashion retailer Hennes & Mauritz, or H&M as they are more popularly known, doubled their sale last year in India by expanding their number of operational stores pan-India and slashing their price lower than other fast fashion rivals like Levi Strauss, Benetton, Marks and Spencer (sic). To put this in perspective, H&M had sales of Rs 490 crore in India a year ago (2016-2017) while it ended 2017 with Rs 954 crore. That’s a difference of 464 crores INR!
When retailers make the decision to provide discounts and slash prices of specific products, it should be a well thought out decision which factors feasibility and long-term profitability. Consequently, retailers need to know the kind of promotions that works best for their requirement. There are different types of promotional pricing that a retail outlet can offer to increase foot traffic:
* Providing discounts on a range of products at your store. This works in bringing in more customers and provides them with a whole bunch of complementary products that come at a cheaper price.
* Providing discounts on products in high-demand: Certain products that are in high demand can be offered at a lower price to attract more customers, clear your overstocked items quickly and generate awareness for your store.
* Buy One Get One Free: Bundle pricing techniques have been used for years by retailers to sell products and clear old stock. This kind of promotion makes customers feel that they are making a getting more by paying less. This leads to impulse buying as the customer ends up purchasing more than they had intended. It is great to build customer loyalty as well. While most retailers offer such deals on the same product, you can mix it up by bundling different products from different manufacturers.
* Promotional pricing works best as a by-product of smart purchasing. Allow us to simplify. Let’s say that a product is priced at 100 INR. Instead of pricing it at its MRP, retailers show its cost as 99 INR as there’s a supposed saving of 1 INR when the product is bought. Research has shown that MRP ending with 9 has more chances of inducing a purchase desire from customers. By using the lure of savings, it creates a win-win situation for both customers and retail outlets.
* Use coupons to lure customers: Coupons are offered to customers through emails, SMS, etc. to customers and they can avail the coupon offer upon visiting the store with said coupon. It’s a tried and tested method that is also a good way to introduce loyalty programmes for your store.
2. Leverage Point-of-Sale Displays
When you shop at some of the major hypermarkets and supermarkets, you would have noticed smaller items and magazines lined up near the checkout counter. Products like munchies, stationary items, gossip magazines etc are lined up there for a reason. Not only do they distract customers in case of long queues, but they also encourage shoppers to indulge in impulse buying. Such displays,
termed as point-of-sale (POS) displays, can be very useful in propelling people to add more items to their shopping cart.
Retail stores can use POS displays to build interest about certain products. For example, free samples at the POS counter can pique the interest of customers to try out the product. Even if customers don’t buy it, they are likely to remember the product the next time they come to the store. By increasing brand awareness through free samples, retail stores are likely to see demand increase with higher foot traffic.
POP displays are particularly significant in increasing foot traffic because:
* When a customer has collected all of the things he/she needs, purchasing smaller items that aren’t very expensive won’t seem like an add-on to the total price.
* “Add-on” items, aka items that customers are relevant for customers, are quite likely to trigger impulse buying in them. These are items that customers can justify as something that they do need and are therefore stocking up on.
Use Your Loyalty Programme
Having a loyalty programme in place is a good way to keep a steady line of repeated customers walk into your store in regular intervals. After all, it’s a lot cheaper to retain customers than acquiring the new ones.
Retail stores can use a loyalty programme to reward customers based on their total purchase made. Once a customer has signed up for a loyalty programme, the store can send information about sales, discounts and store events through email, chat or messages. This creates a sense of value in the customer, who gets a kick knowing that their participation at the store is valued enough for the store to reach out and inform. An easy way for retailers to start a loyalty programme would be by using Zopper EasyPOS. It comes with an integrated loyalty programme support module, using which retailers can take significant steps towards retaining their customers. Additionally, the software’s CRM module helps in emailing and informing customers and can record and accumulate customer feedback regarding the store and its loyalty programme. Having information like this would help a retail store in improving its service and increasing the bottom line.
The challenge of bringing in more customers into a store depends on different factors like the products being sold, the target customer base, etc. But using the three tips above, any store is more than likely to see an increase in foot traffic and a gradual increase in customer loyalty. Foot Traffic