Key Trends for Retail Success

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While many communities are still reeling from the after effects of the recession, consumers are opening their wallets again. Savvy business owners are taking the opportunity to review their marketing plans and position themselves to capture future sales. In many cases, retailers are finding that today’s shoppers think and act differently when it comes to finding and visiting local retailers and restaurants. These new customers often enjoy shopping locally, but are more likely to seek information about local businesses from online sources than from word of mouth and traditional marketing sources. 

Shifting Business Hours

In a smaller community or neighborhood that already draws from a limited trade area, changing demographics and consumer habits will have a significant impact on businesses that stick to the 9-to-5 business model for the bulk of their sales. The traditional 9-to-5 hours of operation originally catered to the single-income household, where (typically) female shoppers made household purchases during the day. But today’s America is made up of dual-earning households and suburban and rural residents with long commutes, so there are fewer local daytime shoppers. Luckily, there are strategies that retailers can use to better communicate with and serve this population base while retaining existing customers.

A recent Destination Marketing International report reveals that 70 percent of all consumer spending is done after 6 p.m. Many small town businesses have been slow to adapt to this trend, thereby missing out on a critical window to capture a key segment of the local market. This is often due, in part, to limited staff or aging proprietors. However, new businesses opening in traditional districts can serve as examples for other businesses to follow.

Ken Kemler, owner of the Keystone Grill in Cambridge, Wisconsin (population 1,144), for example, purchased his restaurant in 2009, with the goal of creating a small town “gastropub” that would not only cater to the area’s strong tourism base but also attract locals. After purchasing the business, Kemler changed his strategy in order to accommodate a variety of dining preferences and appeal to more diners. He renovated the bar area for evening crowds while providing a separate entrance and seating area for people seeking a sit-down dining experience.

The Keystone Grill was initially one of only three Cambridge businesses to consistently provide evening hours, remaining open whether there were customers or not. Kemler’s persistence, combined with strategic marketing and creation of a signature Keystone Kruise night. A promotion that offered specials for classic car enthusiasts, Kruise Night attracted a target audience and provided streetfront appeal to draw other customers. It also more than doubled the restaurant’s dinner business. The Village of Cambridge and other businesses are joining the Keystone with additional Tuesday night promotions to further expand shopping and dining options, jointly marketing Tuesday evenings as “Cambridge Night.”

Working with the Internet

The second most critical trend for small-town retailers to embrace is the growing importance of the Internet, not only to expand the trade area through direct sales, but also due to the increasing importance of the web as a decision-making tool. According to national information from the Department of Commerce, five cents of every retail dollar is spent online. This represents a 16 percent increase from 2010 and an 800 percent increase since 1999.

While urban consumers were at the forefront of the Internet revolution, increasing 3G cellular coverage and higher capacity broadband in rural regions are making the trend relevant in these communities as well. Rural retailers, however, have been slower to adapt; and as a result, many searches on sites such as Yelp and Citysearch in small communities do not produce results that expose local retailers to new residents and tourists. Research by PewKnight determined that 79 percent of the U.S. population with online access uses the Internet to identify businesses and aid decision making on most local topics, including research on local bars, restaurants, and personal service providers. This highlights a challenge for local establishments that rely only on storefront presence and word of mouth to attract new residents or pass-through visitors who use the Internet to guide shopping decisions. Providing basic information (hours, directions) on a store website and populating major business search sites (Citysearch, Yelp, Google) with pertinent information can provide low- to no-cost market exposure to new population groups.

There are success stories of businesses that have embraced the power of technology to increase exposure and drive sales. The River City Eatery in Windom, Minnesota (population: 4,646), opened in 2011. While owner Mari Harries dedicated significant effort to create a business model targeted to the local market, she also used technology to drive interest and information about the business even before it opened. Harries introduced a blog that profiled her experiences as an entrepreneur, providing a glimpse into the business planning process from licensing to menu planning and space build-out.

To broaden her community outreach after opening, Harries turned to social media, garnering 533 friends for the restaurant’s Facebook page as of March 2012. She notes that the Facebook connection is not only useful in communicating with regular customers, but is also popular with alumni and extended family of local residents who enjoy the opportunity to stay in touch with the community via River City Eatery updates. These connections allow the restaurant to maintain a regular connection with occasional visitors to the area as well as local residents. While the restaurant is still young, it has developed a strong local following, as well as attracting out-of-towners due to the increased exposure provided by the digital marketplace.

The individual stories highlighted in this article feature restaurants, but all types of businesses have made a significant commitment to reaching this new market. Service providers can often be especially flexible, as they require less staffing to accommodate off-hour client requests. While there is frequently significant resistance to change among business owners discouraged by past ineffective marketing campaigns or unfamiliar with the Internet tools to successfully adapt to the new market, there are scalable models that allow businesses to move forward at a manageable pace.  Some early steps to include:

  • Study the local market. Survey businesses that successfully reach your target demographics. Business owners may be surprised to find that the busiest hours at the local grocery or even the library are Saturday morning or Sunday afternoon. If this is when target customers are out and about, stay open for them. This doesn’t have to mean more hours, just smarter hours. Opening later in the morning or closing during mid-day is acceptable if there are few customers during that time and, most importantly, if the new hours are communicated clearly and kept regularly.
  • Try it out on a small scale. Experiment with extended hours one evening a week or one Saturday a month. The key is persistence and consistency, as it may take six months or more for marketing to pay off. But, if a customer who finds a store closed during advertised hours, it can ruin months of effort. Retailers can accomplish more with this effort if they coordinate so customers can combine stops.
  • Pair up with local entrepreneurs or community resources. Businesses with limited staff may be able to extend hours or expand their customer base through co-tenancy. Explore ways to encourage local coffee shops or diners to host evening musical performances, art classes, or other group activities. Other evening activities might include community programming, such as a yoga class held in a downtown theater or vacant storefront.
  • Populate the Internet. Make sure local businesses are listed on websites where customers read reviews and look for businesses. Google Places and Yelp are two examples. Making sure that your information is complete and accurate on these sites is important so that customers can find basic information on your business. Having detailed information can also help your business show up accurately on mapping websites, many of which base the placement and prominence of businesses on the presence of reliable information in these directories.
  • Create an online community network. By linking together local online presences using tools such as Facebook, Twitter, FourSquare, and other platforms, businesses can cross-promote and reinforce common hours, specials, and other messages. Civic groups, youth sports, and other organizations can be valuable partners in this type of endeavor, as they often have established networks and represent unique segments of the local population.

These strategies can apply to retail businesses of any size and scale; but, as with any local business strategy, they should engage the unique customer base in the area. Many businesses, especially those that have been around a long time, find themselves able to connect with previously untapped markets as a result of market analysis and tech-savvy outreach.