Reasons Retailers Struggle to Sell And How To Rise Triumphant
By Bob Phibbs
The Coronavirus has amplified many of the problems that already existed in retail selling. And the pandemic has added more problems on top of those.
With stores and distribution centers closed for the last three months, retailers are faced with trying to climb out of a financial hole none had expected . With 2 million unemployed and the headwinds of ongoing trade wars, extreme weather, a pandemic showing no signs of going away, demonstrations, retail bankruptcies, and a decline in consumer spending, it is easy to tell yourself and your staff that shoppers just don’t want to buy.
But that would be a big mistake.
Think about how much effort it takes for you to get out of your house, get in your car, and drive to a store. It is a considered purchase. You don’t do it on a whim.
While shoppers might be looking for one particular product, they are always open to discovering something new. That is the power of brick and mortar retail. If they just needed something, they would have gone online to buy just it.
When they do make the journey to your shop, they are committed shoppers. It is your failure if you don’t make the sale, not theirs. And more now than ever, you cannot afford any failures. That's why selling must be a renewed part of your Retail Sales Strategy.
What are the biggest overall sales problems in the retail industry?
Trust. Health and safety are expected to be barriers to shoppers lingering in stores, going to malls, and socially distancing themselves from associates.
Disrupted supply chain. One problem for retailers is that they are out of stock on merchandise that customers come in specifically looking to purchase. Spot shortages of popular products and drop-off in demand in March and April also have meant forecasting inventory levels will be hard.
Increased returns. Returns were already a problem for online retailers posting $50 billion last holiday season alone averaging 15-40 % of orders.In-store returns averaged just five percent but that is changing with the closure of fitting rooms as stores reopen.
High turnover. According to Daily Pay, hourly employees have the highest employee turnover rate at 65% whereas corporate positions have turnover rates of just 18%.
Unmotivated employees. The Work Institute’s 2019 Retention Reportstated more than 3 in 4 employees who quit could have been retained by employers. 22% left because of lack of career development (training), 12% left for work-life balance, and 11% left because of Manager behavior. Money was not in the top three reasons.
Untrained employees. Because retail managers are focusing on task completion instead of leading retail associates to increase the conversion rate of lookers to buyers, their untrained employees on the salesfloor are only able to sell what they personally can afford.
But let’s get to the biggest reason for sales problems and that is the owners’ and managers’ aversion to the actual word selling.
And that’s too bad.
Nothing happens until a product or service is sold and money is exchanged.
You can have all the social media likes you want, all the influencer marketing you can handle, have a sophisticated marketing plan to attract customers, and the prettiest stores in the world, but unless someone gives you money, you have a hobby and not a business.
For customers, poor service on the salesfloor - and on the phone or even online - is often thought of as the biggest sales problem. And while many retailers say they provide great customer service, customers do not get the service they feel they deserve. It may seem obvious but retailers need to provide excellent customer service to draw customers back into the store and boost sales.
Where does bad customer service start?
Poor, non-existent, or artificial greetings. Survey after survey have revealed shoppers do, in fact, want to be greeted in-store. But if you make the mistake of yelling, “Hi. How are you today?” across the store, their mumbled response might give you a clue that that doesn’t work. Especially when someone is 30 feet from the other person trying to get their attention.
Remember, a customer coming into your store nowadays, when they could have already purchased whatever you sell online, is already committed to making a purchase. You have to care for them, not treat them as something you have to deal with.
I know of someone who identifies a product they want online, then calls ahead to the mall to find out which entrance/exit the store is closest to in order to minimize time spent among the crowds in the mall.
This person is not necessarily a browser, but that doesn’t mean they can’t be enticed to browse once in your four walls if you make them feel comfortable.
This is where training must teach nuance. If every salesperson they come near just asks How are you, they may be inclined to make their single purchase and hightail it out of your boutique.
Desperation. We’ve all been in a shop where the employee was so anxious and desperate to make a sale without knowing it that they were doing more damage than good. Did you see we just got this in? Are you local? Did you see our sale over there? I call it greeting with dollar signs in your eyes.
Judging who can afford it. We all remember that story about Oprah Winfrey trying to buy a purse in Switzerland when the clerk refused to show it to her saying, “It’s too expensive.”
Whether it is said or not, oftentimes traditional retailers employees try to gauge whether someone is just kicking tires or ready to buy. And that goes beyond those who are paid on commission. It is felt someone who comes in and asks for something will be a quick or easier sale than someone who just wants to look.
But the money is in the looking. I recently heard from one of our SalesRX users that one of his employees had made a sale with 72 add-on items in addition to the one item the guy had said was all he wanted.
Rote. After making the same sales presentation hundreds of times, your associates will make assumptions and sound as if they’re delivering a weather report devoid of anything resembling enthusiasm or passion; even if they really like the product, their delivery comes off as rote. Without adding their own thrill of purchase, the shopper often passes.
These are the industry-wide problems, but what is actually happening with you and your store?
How to determine the reason for problems in your retail stores
Identify pain points in your customer experiences. Use social media customer complaints, out of stocks, and use visual cues from shoppers as they interact with your staff.
Review your POS numbers including average ticket of associates, units per transaction, and returns.
Examine sales of entry level price points versus mid-price and premium items to understand if associates are selling down to shoppers.
Now that you’ve identified them, what do you do to correct them?
Best ways to overome problems in retail selling in your stores
Examine your company position on selling - not just in your stores but online. If selling isn’t a focus and you continue to shy away from using the word, you’ll never address the struggle to sell.
Go beyond year over year sales and UPT to allocate labor based on traffic, not transactions to avoid unintended selling problems.
Increase brand loyalty by elevating your associates to sales professionals. Customers who like your company because of your crew’s service skills are more likely to shop with you more often; it will be cheaper to get them back into your store, and even easier to get those customers to rave about you.
Go out of your way to hire people who are trainable and who like your company. Selling is nothing more than a transfer of feeling; because I feel good about the company I work for, I can easily share it with you. Target is working hard on this, so should you.
Properly train staff on a daily basis to improve customer service. This is one of the most crucial challenges retail industry leaders have to address. Improve every single person’s selling techniques to go beyond trying to close a sale to building customer loyalty through engaging and serving them. I have a whole program of over 100 online lessons to teach your staff how they can easily engage a stranger, enjoy their job more, and become more valuable to you here.
At every meeting, actively work on how to put the customer at the center of your customer service.
Unlike Amazon or another online retailer where you can go down the wormhole of an endless aisle, brick and mortar shoppers come to you because they want boundaries. They go to a shop to slow down. To consider. To ignore their phone notifications.
An associate should be so well trained that any shopper allows them in to converse and form a bond.
Spend time looking at your own bias about selling, bring your attention to hiring and training, and set your goal to rise triumphant to sell your merchandise.
Anything less and you won’t just be at risk, you’ll be gone.
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