What is Retail Marketing?
Simply put, retail marketing is the activities and strategies used to promote your retail store and business to customers in an effort to increase sales and brand awareness. There are many components that go into formulating a comprehensive strategy for your retail marketing efforts. No two businesses are completely alike so it’s important to consider the unique qualities of your business when deciding on an approach. A retail marketing strategy should also evolve over time as new technology emerges, business goals change, and customer’s preferences and tastes change.
The 6 Ps of Retail Marketing
As you start examining the right mix of marketing strategies and activities for your business, it might be helpful to examine the 6 Ps of Retail Marketing: Product, Place, Price, Promotion, Personnel, and Presentation.
One of the first decisions you need to make as a retailer is what product you are going to sell. Your products may be physical goods or it might also be a digital good you sell on your website (such as sewing patterns) or a service (such as repairs or classes). You will want to carefully consider what mix of products and services make sense at your store. For instance, many stores that sell musical instruments also provide repairs on those instruments, along with lessons.
You’ll also want to consider the breadth and depth of the product lines you offer. For example, a clothing store might decide between offering all types of clothing to men, women, and children or specializing deeply in one niche area (i.e. women’s shoes). The balance of the type of products you offer will play an important role in the success of your business. Factors such as the square footage available in your retail store or minimum order requirements from a vendor may play into the strategy you choose.
This is typically the physical location where you sell items from (also known as a “brick and mortar” store). Generally, the best locations are those with a high amount of traffic and visibility. Often these places are found in the business districts of cities.
Consider factors such as customer parking, access for delivery vehicles, and available infrastructure (such as public transit). Another important aspect to analyze is the population of a city and whether the local demand is large enough to support your store entering the community with a substantial enough market share.
Consider whether you plan to have multiple locations in the future. You’ll want to make sure you select locations that are far enough apart from each other that you don’t cannibalize your in-store customer base. You’ll also want to consider logistics, such as tracking inventory across multiple stores.
In addition to a physical store, your website is another place where you can sell items. Having a well-designed, ecommerce-enabled website can greatly broaden your reach to potential customers. It can also drive in-store traffic by giving your customers a chance to peruse your inventory before setting foot in your store.
The pricing of your products is another important area you’ll want to carefully consider. There are several different strategic directions you can potentially take. Here are a few to consider:
- Premium Pricing – This strategy is employed when a price higher than the raw materials and labor is charged to the consumer. The higher price is usually justified because there is added value beyond the cost of goods due to the reputation of the brand or craftsmanship. This typically makes sense on luxury products that have a high perceived value or when you have a strong competitive advantage such as a high level of customer service and care.
- Economy Pricing – This is when a lower or discounted price is charged to the consumer. This approach makes sense when your product appeals to a mass market and you are able to make up small profit margins with a high number of sales (volume). In some cases, vendors will provide retailers with a minimum advertised price (MAP) on a given product, which is the lowest you’ll be able to charge as a retailer.
- Competitive Parity Pricing – Business owners that engage in parity price must base pricing on what competitors are charging for a comparable product. This involves a good amount of market research and constantly re-evaluating to remain at a competitive level. Sometimes stores achieve this strategy through a price matching policy.
- Skimming Strategy – Products and services with high development cost will often benefit from a skim strategy. Retailers will initially price the product at the highest acceptable amount to achieve maximum profit from early adopters, but then the price is strategically lowered over time to appeal to mass markets. This is a common approach with technology products such as smartphones.
- Penetration Strategy-This is when a product is initially priced low to attract a large number of customers and then after the promotional period is over, the price goes up. This approach is often used for subscription based products like streaming services.
Review each pricing strategy and think about what makes the most sense for your business.
Another tactic to consider is price bundling, where multiple products are bundled together at a lower combined price. Consider if your store has any complimentary products that can be paired together as a bundle. For example, a beauty shop might offer a brand of shampoo, conditioner, and soap as a bundle. A yoga studio might offer yoga mats bundled together with classes. A music store might sell an electric guitar together with an amplifier.
You can also bundle by offering a sales promotion discount if an item is purchased at volume. For example, a clothing store might offer 3 pairs of jeans for $100.
Promotions are the activities a store does to get the word out to customers. This typically involves different forms of advertising including online ads, print publications, mailed flyers, billboards, and media outlets like TV and radio. A store may also use signage, both inside and outside of its storefront for promotional purposes.
Sometimes the object of the promotion is to increase sales of a particular product. In this case, retailers might offer a coupon or special pricing on an item. Other times, the object of a promotion might be to increase overall sales and so you might have a store-wide sale to get people in the door.
Sometimes the goal of promotion is just to increase brand awareness, in which case your messaging would be more focused on your store name and the image you want to convey. You might consider public relations activities such as being interviewed with local news or sponsoring local events to help achieve this purpose.
The staff you hire to help run your store are also an important component of your marketing mix. All retail business marketing is based on the quality of the people you employ to decide on your strategy and represent your business. They set the tone for the customer shopping experience and act as spokespeople and marketers for your brand.
As your buyers are making their decisions, a well trained staff member can help suggest a premium product to a customer (up-selling) or suggest complementary products (cross-selling), such as a tuner and pack of strings to go with a guitar or a protection spray to go with a pair of shoes.
Consider whether you will compensate your staff with commissions on sales or a set wage. Commissions incentivize your employees to close a sale but they also could potentially create a high-pressure environment for your customer. You’ll want to train your staff on recognizing the verbal cues and body language that signal a customer is ready to make a purchase and be tactful about their interactions.
Presentation represents all the physical aspects of your retail store brand. This includes a broad range of items such as your exterior facade, internal store layout, brand colors, visual displays, lighting, shelving, staff uniforms, and even extends to the digital world with aspects like your website and social media accounts. All of these items together should create a cohesive experience for your customers that sends a unified message about your brand.
Make sure that as customers enter your store that the atmosphere is inviting, the layout is easy to navigate, and products are easy to find. Utilize an appropriate level of signage. Too many signs can confuse and overwhelm shoppers; too few leaves them uninformed.
12 Retail Marketing Ideas You Can Start Today
1. Enabled Your Website For eCommerce
A great place to start with eCommerce is selling products on your own website. With the right eCommerce software, you can integrate your entire inventory so that a sale on your website is reflected on your physical store data and vice versa. This can actually help your in-store sales by allowing your customers to look at your inventory before they’ve even set foot in the store. In addition to making sales outside of your local area, it also enables you to offer local features such as in-store pickup and curbside delivery.
Consider also listing your products on other eCommerce sites such as Reverb, Etsy, Amazon, and Ebay to expand your reach. You can even now sell products on social media sites like Instagram and Facebook.
2. Work On Local Search Engine Optimization
Start your local SEO efforts by creating or updating a Google business listing for your store. This will include your business name, location, contact information, store hours, pictures, descriptions, and reviews. This will significantly help your store appear in “near me” search results. For example, if someone were to search “music stores,” the first batch of results would be music stores near that person. By keeping your listing current and full of relevant information, you have a better chance of attracting local customers through search engine results.
You can also list your your products on Google Shopping after creating a merchant account. This is another way you can use Google to expand your reach and grow retail sales.
Create landing pages on your website that emphasize local keywords. For example, if you own an outdoor retail store in Los Angeles, create a page on your site optimized with the title, URL, and content around the phrase “Los Angeles Outdoor Retail Store” so that when potential customers type that term in google, you are more likely to appear at the top of the search results. If you have multiple locations, create multiple landing pages that optimize for each city that a store is located in.
3. Experiment With Geo-targeted Online Ads
Online advertising is an important part of your marketing mix and if done correctly, it can be an effective tool for growing your business. Platforms like Google, Facebook, Instagram, Twitter, and others allow you to target your ads with very specific demographic and geographic criteria. Limit your ad exposure to just your city or region, or even an area as small as a 1 mile radius from your store.
Consider your main digital marketing objectives when putting your online ads together. If you are a restaurant, you could run your ads locally from 10-12pm with a special offer in an effort to increase immediate lunchtime traffic. But you could also run ads with the intention of gathering email addresses or phone numbers of your target demographic so that you can continue to send marketing communications to a potential customer in the future.
You can also set up your ads for retargeting. This means if an individual visits your website or social media accounts, they will be shown ads promoting your business for a period of time. These ads usually tend to perform better because the individual has already demonstrated some level of interest.
Experiment with different online marketing campaign strategies by trying a number of small campaigns and investing more money in the ones that perform best.
4. Establish A Positive Reputation With Online Reviews
Consumers are increasingly turning to sites like Google and Yelp to read reviews and learn about businesses like yours. Politely respond to reviews, both positive and negative. Using software, you can invite your customers who had a positive experience to leave a review. If they had a negative experience, you can personally reach out to them and learn how you can improve your customer experience and make things right. Doing so can help mend your reputation and keep your customers in your good graces and returning to your store.
5. Text Message Customers at Key Moments
Text or SMS messaging is an easy way to send promotions and communicate to potential and existing customers. With retail marketing software, you can do engage in SMS marketing like automatically send a 10% off coupon if they haven’t been to your store in 3 months. You can also trigger text messages to be sent around a customer’s life events like a birthday, anniversary, or graduation.
The restaurant Wing Nutz sends weekly specials via text message to their customers who have opted in. These are usually sent around 4:00 p.m. on Fridays, a time when many individuals are about to get off work and ready to eat out during the weekend.
Pioneer Books used text messaging to promote a book reading challenge for the new year where customers could earn a $50 gift certificate by completing 40 books from a list. The timing is significant because it aligns with many of their customers setting goals or making resolutions to read more.
6. Build A Strong Social Media Marketing Presence
Post regularly to social media accounts that make sense with your business. A financial institution might feel out of place posting to TikTok but would fit perfectly well on LinkedIn, for example. Keep your content on-brand and relevant to your customer. Pictures tend to draw more engagement, as do videos (more on this later). You can use your social channels to highlight products and services, offer tips, spotlight employees, make announcements, and promote events.
Incentivize your customers to follow your social accounts. A simple way to do this is with a small sign next to your cash register offering a 10% discount if a new customer gets out their phone and shows the cashier that they are following your store. Crumbl offers customer loyalty points (known as “crumbs”) through their app for each social media account you follow, which customers can cash in for free cookies.
Consider starting a Facebook group to engage your customer base. The goal is more about building a community and less about selling directly. For example, a craft store might create a group where customers can share their projects and ask questions to each other. This can help increase customer engagement and position your store as a helpful community hub.
7. Publish Compelling, Product-Centered Videos
Posting videos to social media platforms is a great way to showcase the great products you’re selling in your store. The Acoustic Shoppe, a music store in Springfield, Missouri, posts reviews of new instruments it receives in stock.
Crumbl Cookies uses social videos to publish enticing, mouth-watering videos announcing its limited edition cookies of the week.
Another approach is to create instructional, how-to videos that tie back to your products or services. For instance, a quilt shop might post a video teaching a new sewing technique with supplies from the store. An outdoor retailer might post a video with hiking tips that include purchasing the right shoes and socks.
Consider where your customers are spending their time online when choosing which social media video platform to focus on. This will inform the nature of the content you post, how polished the production needs to be, the style, and the length. A fashion video from a boutique posted on TikTok will have a very different feel than a video about how to fix your sink from a hardware store posted on Youtube.
8. Promote In-store Events to Bring People In The Door
Events of a promotional nature might include a store opening, a product launch party, holiday parties, meetup groups, guest lectures, or an open mic with music and poetry. Your events could include raffles or giveaways that feature your store’s products. Hyderhangout hosts an event called “Quilt Til You Wilt” where customers bring in their projects and socialize with each other while they quilt or sew.
In-store events could also include paid classes or lessons, which could potentially bring in significant revenue to supplement your sale of physical goods. Consider the physical space and capacity of your store and decide if hosting paid events makes sense. Use software with event scheduling features to streamline and automate the checkout process.
9. Send An Email Marketing Newsletter To Your Customers
A monthly or weekly newsletter will help keep your customers connected to your store. Your newsletter could include sales or special offers, upcoming events, customer highlights, tips or advice relevant to your customers, and links to helpful articles. Use retail software to manage your customer list and send mass emails.
Consider different ways to segment your audience and deliver different messaging to each group. For example, you might have a group of recent shoppers who have made a purchase in the last 3 months and another group of less recent shoppers haven’t (who may receive a more generous coupon in their email).
You can also segment your customer list by demographics. For example, a clothing store might divide their list into female and male individuals and send two different emails emphasizing the women and men’s clothing lines, respectively.
10. Create Enticing Window Displays
Having a great window display can draw new customers off the street and get them to enter your store. Feature your store’s products as much as possible. Use bold colors that stay on-brand with your store’s style. Keep your look fresh by updating your display once a month.
You can look to stores like Barneys, Nordstrom, and Anthropologie for inspiration in creating your own window displays.
11. Become A Vendor At Community Events
Another great way to add to your sales and promote your physical location is by becoming a vendor at a local public event. This could include farmers markets, festivals, fairs, and trade shows. Make sure your booth looks professional and is on-brand with your physical store. If you use a cloud-based point-of-sale system, you’ll be able to make sales anywhere you can get internet access or a cell phone signal.
12. Partner with Neighboring Businesses and Organizations
A simple idea is to identify neighboring businesses with a similar audience and ask if you can place some flyers in their store in exchange for placing their flyers in your store.
Consider creating a multi-store community event. One group of 12 quilt shops in a community banded together to create a two week long “Shop Hop” event. Each participating store offered a free gift and pattern for visiting their store, along with raffles for gift cards and prizes.
Consider partnering with a non-profit organization and donate a portion of your sales to a chosen cause for a period of time. Not only does this help improve your store’s image, it’s also a positive, generous thing to do.
Get involved with your local city chamber of commerce and give your input on promoting your community’s local stores. Some cities have been known to offer “facade grants” to help spruce up your exterior storefront and signage.
The US Small Business Administration offers a free program called Score, where you can connect with local mentors in your area for advice and support.
Running a retail business is a lot of hard work and presents many challenges. Whether you are able to hire a retail marketing manager or become an expert retail marketer yourself, following these retail marketing strategies and ideas will help set your business apart from competitors and lead you on a path to success.