Why Does Retail Marketing Strategy Ignore the Best Tool?

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Businesses require an actionable plan to propel sales and scale. Business models embrace a combination of strategies to establish and sustain a business. The most prominent one is the retail marketing strategy. 

What is retail marketing?

A retail marketing strategy enables the business to create and implement ways of retaining existing customers while attracting new ones. The strategy should be affordable and yield results for you to consider it viable. Review the plan at intervals of months or bi-annually to ascertain its effectiveness. 

Components of Retail Marketing

Retail marketing strategies have four main components that merge to make the business plan effective. They include: 

  • Product
  • Price
  • Place
  • Promotion

Product

The product could be tangible or intangible. You cannot have a marketing strategy without knowing what you are selling. Packaging is vital in presenting the product to the market. Most new businesses fail due to poor delivery and packaging. Segment your products into measurable units that customers can easily understand. 

Price

When pricing, factor in all your overhead costs, competitor prices, demand, profit, and the initial cost of production. To maximize profit and ensure consistent selling, understand your chosen location's demographic and advantages to maximize profit. Use pricing psychology, such as valuing a product at $99 instead of $100. 

Place

The location or platform where you sell your products determines whether your customers can access them. However good your product is, if it is not strategically located, there will be minimal sales. Identify who your potential customers are and take the business where they are. Create diverse platforms on which the product is accessible to reach as many people as possible. 

Promotion

Promotion gets an audience for your product. Communicate effectively what the product is and what value it adds. Find different ways of creating interest in your product. Use various forms of retailer marketing such as advertisements, salesperson, or word-of-mouth marketing often referred to as in-store influencer marketing. 

Types of Retail Marketing Strategies

  • Market penetration strategy
  • Market development strategy
  • Product development strategy
  • Diversification strategy

Market Penetration Strategy

A market penetration strategy is when retailers focus on keeping their existing customers. It involves offering discounts to ensure you do not lose your customers to competitors. Increasing distribution channels is also effective in market penetration. This strategy relies on using the business's information to drive sales. It depends mainly on good customer relations and feedback for improvement. 

Market Development Strategy

This strategy requires you to seek new markets by opening new branches or advertising more widely. Survey to establish the existence of potential customers in the target area. Find out if there exist similar products in the new market. Carry out in store sampling to get immediate feedback from potential customers. 

Product Development Strategy

Creating new products for the existing market is a product development strategy. Your business will bank on the availability of existing customers who trust your brand. This retail marketing strategy drives sales by creating diversity. Do in-store demo of products to determine the feasibility of the new product and promote it. Offer discounts or free products to promote the new product but maintain quality. 

Diversification Strategy

Diversification is the riskiest strategy because it requires introducing an entirely new product into a new market. It needs you to meet market demands that have never been encountered before. It involves developing, researching, interviewing, and creating demos, making the process expensive. It can be a costly retail marketing strategy, especially if the market is not guaranteed. This retail marketing strategy is best for firms interested in diversifying their products. They can use retail as a method of increasing channels of distribution. 

Why Does Retail Marketing Strategy Ignore the Best Tool?

All the marketing strategies above require financial and human resources. The high cost makes it hard for businesses to employ them. The process involves customer acquisition, a method of gaining a single customer. If the cost of acquiring a single customer is high, it raises the product's price, making it hard to sell. 

Understanding your customer acquisition cost will enable you to determine your prices to make a profit. For the business model to be viable, the customer acquisition cost should be lower than the customer’s buying cost. 

In-store product demonstrations or in-store sampling events are proven to deliver the best return on investment, i.e., the lowest CAC (customer acquisition cost). There is plenty of evidence that supports this statement. The reasons retail marketers tend to ignore this are:

  • It is only valid when these events are produced well, and it is not easy to do so consistently.
  • Are not easy to scale without appropriate tools.

However, if managed strategically, they: 

  • Bring more traffic into a store, which will drive sales.
  • Improve shopping experience, which brings repeat shoppers more often.
  • Accelerate inventory turnaround.
  • Increase overall sales per square foot at a lower cost than any other marketing method.

Inexpensive Ways to Incorporate Retail Marketing Strategies

While retail marketing strategies can be expensive, you can leverage them to cut costs by doing the following:

  • Building a social media presence: digital marketing is the best way to increase visibility at a minimum cost. Online deliveries and online customer reviews are inexpensive ways to attain customer satisfaction.
  • Search Engine Optimization: Generalized SEO might not get you the visibility that will translate to sales. Create localized SEO strategies that favor your business online.
  • Present your store well: use glass barriers and display your products. Pique your customers
  • Branding: it does not have to cost you thousands of dollars. Create simple brochures and signage to help build visibility. Branding packaging is also an effective marketing plan.

However expensive the marketing for retailers cost is, there is no way around it. Assess your products, pricing, promotion strategies, and overall business model. Find the gaps that you need to fill to maximize profit. Reassessing the value of your product and finding cheaper sources can help improve the business. Work on cutting costs until the business is established and self-sustaining. Find a way to implement a few retail marketing strategy tools at scale.

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