Study: Retailers cutting prices to compete with online players
Online-only retailers may be taking a toll on omnichannel companies, but traditional companies are finding ways to fight back.
This was according to “Brick-and-Mortar Retailers Fight Back: Winning Strategies to Compete with Online-Only Players,” a report from Applied Predictive Technologies (APT).
In response to price pressure from online-only rivals, 44% of respondents have cut prices, and 12% plan to do so in the coming years. Among the retailers who have closed stores but successfully recouped revenue, almost three-quarters (72%) implemented price cuts.
Ready to face online competition head-on, three-quarters of respondents (75%) have increased their investment in online channels. The majority of retailers (68%) have responded to the infinite inventory of the Internet by expanding their product selection.
Meanwhile, 70% are training employees to be more knowledgeable, and more customer service-focused (58%). And 54% have introduced loyalty programs, and 24% plan to do so in the future
“In such a competitive environment, it is critical that brick-and-mortar retailers not just adapt, but adapt smartly,” said Jonathan Marek, senior VP, APT.
“With so many initiatives to try across so many different areas of the business, those that can most quickly and effectively implement winning ideas will be the victors in the age of e-commerce,” he added. “While there are many methods retailers can use to inform decision-making, in particular, findings show that among the respondents that leverage scientific testing to evaluate new ideas, 60% have either not closed stores as a result of online competition, or have recouped more than half of sales lost from store closures.”
To stay competitive in an increasingly digital marketplace, APT suggests retailers adopt the following four key strategies:
&bull Make your store associates core to the in-store experience
&bull Use customer insights to drive incremental profits, not just offer promotions
&bull Take A surgical approach to store closures and remodels
&bull Focus on measuring everything across channels
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