One way to think about Small Business Saturday is that it’s the launching pad for the year ahead. It’s an opportunity for businesses to look at the trends that are shaping the current environment and ensure that their operations are optimized to drive sales and profitability in the year ahead.
Given the uncertain economic environment and the prospect of ongoing inflation and elevated costs, businesses need to consider strategies that both engage consumers and create efficiencies. What follows are five current trends that retailers and brands need to consider in the year ahead.
Creating customer experiences ‘that your customers can’t get elsewhere’
Creating an in-store experience that drives sales is important on Small Business Saturday and year-round, especially since consumers became increasingly comfortable with online shopping during the pandemic.
“Now, more than ever, attracting your customer is of the utmost importance,” said Michael Prendergast, Managing Director, Alvarez & Marsal Consumer Retail Group, a professional services firm specializing in business transformation. “So, retailers, especially smaller retailers, should be focused on creating excitement in their stores.”
That could include hosting trunk shows, cocktail events, and giveaways, for example, he suggested.
“The small stores are always terrific at this,” he said. “They should not be focused on promotions; they should be focused on creating lifestyle events that generate excitement and interest for their customers.”
Brett Rose, Founder and CEO of wholesale platform United National Consumer Suppliers, said small companies can optimize their sales by differentiating themselves from larger competitors with unique products. “We are seeing a lot of need for uniqueness,” he said. “You need to have something that your customers can’t get elsewhere.”
That uniqueness also extends to the ways small businesses interact with their customers, Rose said. High levels of customer service, and personalized flourishes such as handwritten notes can help differentiate companies from larger competitors.
Optimizing supply chains to ensure product availability and avoid lost sales
The pandemic highlighted the need for companies to rethink their supply chains, following a host of manufacturing and transportation issues that resulted in out-of-stocks and soaring costs.
With Small Business Saturday approaching, it’s a good time for businesses large and small to rethink their inventory optimization strategies to ensure they are in stock for the holiday season and beyond, said Inna Kuznetsova, CEO of ToolsGroup, a global supply chain planning and optimization firm.
“Given the potentially high impact of Small Business Saturday on annual sales, ensuring that a business carries the right amount of each inventory item at each location becomes paramount,” she said. “Consider investing in supply chain planning, even if the solution is a simple one, to ensure product availability, avoid lost sales, and keep good records throughout the following year, to factor the changes into the next year forecast.”
Rose pointed out that small businesses ted to be nimbler than their larger competitors when it comes to facing supply chain challenges, and it showed during the pandemic.
“I think that’s a competitive edge that a smaller business may have over a Walmart or a Target, for example, because Walmart and Target require so much planning in advance, in order to planogram,” he said. National retailers can’t improvise the way merchants “with one or two or three storefronts can,” he said.
Small businesses should also look at opportunities to diversify the vendor partners they work with— not only for products and raw materials, but also infrastructure, such as store shelving and services such as banking and credit card processing, Rose said.
Leveraging data and AI to help identify opportunities in the marketplace
Retailers should leverage sales, inventory, and margin productivity data to make sure they have the right product assortments available.
“It’s super simple,” said Alvarez & Marsal’s Prendergast. “Study what you sell and stock more of it! Don’t think you have the best answers for your customers, let them tell you through the data what they want.”
Andrew Criezis, Senior Vice President and General Manager of NielsenIQ SMB, said data analytics can help identify opportunities in the marketplace.
“The data tells the story,” he said, citing tools such as NielsenIQ’s Byzzer platform to help small- and medium-sized businesses compete with larger brands.
The use of data to drive automation is becoming increasingly prevalent in a wide range of businesses processes, fueled in part by various applications of artificial intelligence (AI).
“From forecasting to assortment planning and allocation, AI takes complex internal and external data to automate micro decisions and uncover insights and opportunities otherwise overlooked,” according to a recent report from ToolsGroup and research firm IHL.
AI is also being used to drive sales at the checkout, generating product recommendations based on customers’ browsing and purchasing histories.
Marketing solutions platform Salesforce, which uses AI to suggest additional purchases during the online checkout process, said 69% of consumers report that they are open to the use of AI to improve their shopping experiences.
“Businesses and consumers alike understand that AI is now an integral part of shopping,” the company said in a recent report.
Small businesses can likely find ways to reduce labor, cut costs and drive incremental sales with the right applications of these rapidly advancing technologies.
You don’t need to have a million followers on Instagram to be successful, but have a presence. Post, share, interact, and create awareness of your store and brand, and amplify wins that you have with customers.
Michael Prendergast, Managing Director, Alvarez & Marsal Consumer Retail Group
Rethinking the checkout process to reflect consumers’ post-COVID contactless convenience expectations
Contactless and mobile point-of-sale (POS) solutions gained considerable traction at retail during the pandemic, and they have shown staying power as tools to increase efficiency and enhance the customer experience.
According to the 15th Annual Global Shopper Study from Zebra Technologies Corp., 43% of shoppers surveyed prefer paying with a mobile device or smartphone (up 23 percentage points since 2019), and half said they prefer self-checkout (up 19 percentage points since 2019). Consumer preference for a traditional checkout register staffed by an employee, meanwhile, has declined 20 percentage points in the last three years, and more than three-fourths of retailers (77%) said they believe staffed checkouts are becoming less necessary with automation.
Mobile-based checkout in particular can help retailers minimize their labor costs, speed the checkout process, and provide increased satisfaction. It addition, it can often be tied to loyalty programs, as is the case at Starbucks, Dunkin’, and other digital loyalty pioneers.
Employees with tech-enabled mobile devices can ring up customers from anywhere on the sales floor, which can help ease congestion at traditional checkout lines. In addition, they can also be equipped to perform a variety of other tasks, such as inventory tracking, assisting customers with online ordering and delivery, and loyalty program signup.
In fact, the 2021 POS & Customer Engagement Report from Retail Consulting Partners listed mobile POS as a top-five priority for retailers.
Mobile POS is also seen as a valuable tool to help retailers reduce wait times as checkout during the holidays and other high-volume sales periods.
Diversifying sales platforms so that SMBs ‘get their products into the same sort of competitive basket with the bigger boys’
Amid consumers’ reliance on e-commerce and the ongoing evolution of marketing and sales via social media, small businesses should consider evaluating their opportunities to optimize their sales platforms.
Data analysis can help small retailers and brands discern which platforms might provide the best opportunities to drive sales, said Criezis.
“Emerging brands can see what product attributes are trending to get the right product out to stores,” he said. “This includes looking at e-commerce opportunities compared to brick-and-mortar opportunities and seeing where there are any upticks in delivery and in-store pickup.”
Rose said small brands should consider diversified sales platforms that could include listings on Amazon Marketplace or Walmart Marketplace.
“They have to be able to get their products into the same sort of competitive basket with the bigger boys, so to speak,” he said.
The holiday season may also be a good time for brands to ensure that their social media presence is at least engaging, if not actually serving as a sales platform itself.
Social media can help build brand awareness among the right prospective consumers, according to a Shopify post, which suggests that brands can leverage social selling by monitoring for relevant conversations and replying to comments from prospective customers, and posting social media content that highlights your expertise, among other tactics.
“You don’t need to have a million followers on Instagram to be successful, but have a presence,” said Prendergast. “Post, share, interact, and create awareness of your store and brand, and amplify wins that you have with customers.”
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.
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