Five Ways Retailers Can Prepare For a Better Future

from the blog of Bob Phibbs, The Retail Doctor


First the bad news for retailers … I’ve often included this quote from McKinsey in my blog posts: “Brick-and-mortar stores should still account for approximately 85 percent of U.S. retail sales in 2025.” Turns out it’s probably wrong.

I heard an analyst recently say that the statistics many cite about online sales being 9 to 15 percent are flawed. The total retail sales figure the U.S. Census uses when determining percentage of online sales includes gas, which you can’t buy online, and cars which few buy online. They also include only what Amazon charges their third-party marketplace as online sales – not the sales those merchants actually make on their marketplace.

Once you adjust those factors? About 40 percent of sales are happening online. I know that’s distressing to read, but it is what is.

When did it happen? Many retailers noticed a drop in foot traffic a few years ago, at a time we were being told the economy was doing better and better. Many figured it was just them.

It wasn’t. It was the 4G network.

As 4G networks grew, there was less need to be on Wi-Fi networks, so consumers relied more and more on their smartphones to search and shop. That’s also why Amazon Prime membership exploded to now include around 60 million users. Shopping became much easier on the fly, no longer tethered to a strong Wi-Fi.

But does that mean it is hopeless for brick and mortar retailers? I don’t think so. First, it’s not like Amazon is a new thing. They’ve been around for a long time. I would agree with analysts who posit that the saturation point is near. It’s not like people are just becoming aware of Prime; it won’t grow much this year. Those who are going to use it are probably already using it.

If you look at e-retailers of books, they were supposed to destroy brick and mortar bookstores. They didn’t. In fact, their trade association, the ABA, crowed that booksellers are now operating 2,300 locations, up from 1,651 in 2009.

What if those who were going to purchase online are stabilizing? The Index of Consumer Sentiment shows that consumer optimism is on the rise. At the same time, so are gasoline sales. This trend signifies increased spending and driving. Just how soon these hopeful consumers will show up in your store is anyone’s guess. But are you actively preparing yourself for when they come, or …

• Are you still buying based on fewer customers?

• Have you deferred upgrades to your POS, CRM and broadband capabilities?

• Have you let your website become stagnant with the same content as your competitors?

• Have you ignored social media?

• When the business comes, will your staff just clerk merchandise, rather than be trained to sell it?

Here’s where retailers should invest time (and money) to best prepare for a brighter future.

1. Understand who your customer is. If you don’t have a large operation, take any information you can from your customer relationship management system (CRM) and sort it. On a basic level, you must know what your number one zip code is, or better yet, your number one customer phone prefix. On an advanced level, learn how often customers return to purchase from you. See the broader picture by determining what your average ticket is by quarter. If you don’t know how, go to and search for someone to help you analyze your data.

2. Understand exactly who visits your website. If you have Google Analytics installed (and you should), mine those insights to understand how people are finding your website. For example, click on “Acquisition and Channels,” then click “Organic Search,” and you’ll be able to see some of the top search keywords people have used to find you. Click on “Interests” and you’ll discover the top interests of people who find you and what they share in common. That should help you find similar people to market to both online and offline.

3. Spend on technology. Whether it is your legacy POS system, a full-featured website, or a studio to make videos about your products, use technology tools to grow your business. A modern, cloud-based POS system can connect the dots between customers, their web behaviors and their social profiles, which gives you the ability to do a deep dive into their behavior patterns. A full-featured website allows video pages, reviews and stories to standout from competitors. The web is accelerating from pictures on websites to video. Create an area in your store to make or edit videos. That prepares you for the challenges of marketing online to an increasingly video-obsessed world. And know this: products marketed with a video instead of a picture have a 65 percent higher click-thru rate.

4. Understand what other retailers are doing with Facebook. Make sure you’re using Facebook and have installed the Facebook Pages app on your smartphone. Unsure what to post or what’s effective? From within the app, click on the bottom right set of three dots. In the middle under Insights will be a tab “Stories From Pages Like Yours.” Use this data to see what’s working for others.

5. Train your employees. I can’t stress enough how important it is to bolster your own four walls at a time when customers are demanding an exceptional experience. I was on the phone last month with one of the largest retailers in the U.S. who told me that their employees received 45 minutes of training before going on the floor. I told them that’s barely enough time to teach how to clock-in and where the bathrooms are. Large or small, you’ll be known by the compromises you make in service rather than the hit-it-out-of-the-park moments. Who you choose to work on your floor, and the soft skills you give them so they’re able to engage a stranger and build rapport, are what create an exceptional customer experience. That takes a lot of retail sales training. Otherwise they’ll sell like they’re still in their pjs on their living room floor.

There’s a big shakeout happening with retailers large and small. Vacancies will continue to rise in malls, strip centers and downtowns, for reasons as varied as over-valuation on Wall Street; lack of demand for a rotten customer experience; and owners who thought “build it and they will come” was a marketing strategy.

We are living in a time of data. Every click you make, and nearly every breath you take, is being tracked by someone, and sold to someone else, to create an online profile of you. Smart marketers are already using that data to get shoppers online.

Brick and mortar shoppers are looking for something other than a huge discount – otherwise GAP and Macy’s would have reported higher recent sales … but they didn’t.

Shoppers are looking for a human connection, not just a click; otherwise, they’d never have left their couch.

Bob Phibbs, the Retail Doctor; a speaker, author of 3 books and retail sales expert of choice for some of the most legendary retail brands.With over 30 years experience beginning in the trenches of retail and extending to senior management positions, he has been a corporate officer, franchisor and entrepreneur.  He is an IBM Futurist and American Express Global Merchant Advisor and listed as one of the top retail influencers in the country. His latest program is, his online retail sales training program. Learn more at

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