Small Business Analytics Can Help your Store Compete
Brick and mortar stores of all sizes – from small businesses to Toys “R” Us – continually struggle to compete with online retailers (especially Amazon). The obvious reasons behind this battle of the brands is the speed and availability of online shopping – but brick-and-mortar stores are actually still preferred by many consumers and can offer customers an experience they can’t get online. The real weapon online retailers have in their arsenal is analytics, not two-day shipping. Brick-and-mortar stores need to understand the importance of business analytics if they want to continue to compete with e-commerce.
Why Brick and Mortar Businesses Need Analytics
1. Post-millennials shop in store
Generation Z (the generation born right after Millennials) has been raised on devices, so you would think they would be our biggest online shoppers. But surprisingly, according to a study from IBM, 67 percent of Generation Z shops in a brick-and-mortar store the majority of the time and an additional 31 percent shop in-store sometimes, putting 98 percent of Gen Z inside an actual retail store.
The post-millennial market is lucrative, too, not just large. With around $44 billion in buying power, 75 percent of Gen Z admits to spending more than half of the money available to them every month. That’s a lot of revenue potential for brick-and-mortar stores, but only if they can turn Gen Z prospects into customers and, more importantly, into repeat customers. Collecting data and leveraging it to effectively target and serve shoppers can help retail stores capitalize on the active audience they already have.
2. Consumers spend more in brick-and-mortar
It may seem easier to rack up large shopping carts online, where items are a mere click away and higher totals often offer incentives like free shipping, but consumers actually spend an average of $1,700 per month in traditional stores, compared to just $247 per month online, according to the International Council of Shopping Centers. So, while online businesses have managed to capture a large enough audience that their profits are cutting into traditional retailers, they don’t have spend on their side.
If brick-and-mortar stores can couple their in-person customer experience with real-time offers and advanced targeting, they could potentially win over a percentage of the shoppers companies like Amazon depend on, causing a significant impact to those companies’ revenue.
3. Personalization is expected
Because Generation Z was raised in a digital world, they have come to expect certain things, like fast-loading webpages, great cell reception, and even personalization. Most of us, in fact, have come to expect these things (and have likely been alarmed once or twice at the timing or accuracy of an online ad on our Facebook page). Personalization is now key to marketing and sales success, and brick-and-mortar can leverage it too.
A survey by mobile loyalty company SessionM found that 90 percent of consumers said they use their phone while shopping in stores, which gives traditional retailers the opportunity to incentivize customers while they shop, just like online retailers can. Stores could offer their customers unique promotions and suggestions in real time, helping provide the personalization that not only is expected but helps drive sales.
How to Get Started With Analytics
- Set up Wi-Fi for customers so you can begin to collect information, like email addresses and dates visited.
- Leverage location data to target prospects who have visited your competitors or who frequent your store’s vicinity.
- Offer personalized “in-store only” offers to the email addresses you’ve obtained to drive repeat transactions.
Data and analytics are the missing links for brick-and-mortar businesses. With an established audience and higher spend averages, traditional retailers just need to add personalization to their efforts in order to compete more fiercely with online retailers such as Amazon. Learn more about small business analytics.