by Aaron Hurd
Almost everywhere you turn you hear about the demise of retail. Gap, Sears, K-Mart, J.C. Penny, RadioShack, Teavana, Macy’s, Abercrombie & Fitch… one could fill an entire blog post with just the list of stores that are making major cuts or have gone out of business this year alone. Even Warren Buffett has pulled almost all of his money out of retail. While bricks and mortar retail generally may be in what seems like an inescapable death spiral, there is hope for retailers who are willing to invest in innovation. A unique product mix, becoming a destination, and connecting with customers on their terms will be the keys to stores thriving.
Riches are in niches and service.
Nationwide, stores specializing in vinyl records are thriving; there are three such stores within walking distance of my apartment. All of these stores share two things in common: They offer a unique product that can’t be purchased elsewhere and they have knowledgeable sales people who are truly passionate about the product they are selling.
College stores can replicate this. First, accept that you are not going to be all things to all people and that there are many items in your store where you’re competing with Amazon on price. Eliminate these commodity items, even if it means eliminating some textbooks. If you can’t make a premium margin on it, it should be gone. Focus on items that are unique to your store, or that students need right away.
Knowledge comes from diversity of hiring. Find and hire people who are passionate about the items you sell. Pay more to get that junior year design major to help with art supplies or the computer engineering major to help sell electronics kits. Bring on a parent with kids in college to help with gifts for mom and dad.
Become the destination and don’t be afraid of people using your product for free
There is a reason why I am writing this from a coffee shop near my house. I don’t come here for the food, or for the coffee, though both are excellent. I come here because it is my “hangout” and I end up buying stuff along the way. Certainly I buy MUCH more coffee, but I often pick up other things while here. Gifts for friends coming into town? Those are now usually cookies from this shop.
College campus bookstores are well positioned to capitalize on this, as they generally have access to prime hangout space. Cull non-performing merchandise and spend some of your floor space creating places to meet, enjoy coffee, or work. Encourage students to use your space to meet, work, and play and it will pay dividends.
Barnes and Noble does to great effect. People are welcome to browse, pick out a book, read a chapter, and enjoy a coffee. Sure, there will be people who come in and never make a purchase, but these customers can be dealt with individually. The proof is in the numbers: Barnes and Noble Education’s 2017 revenues were $1.4Bn with 22% gross margins.
Meet your customers where they are.
Younger consumers are native users of technology. The average college freshman was six years old when Facebook launched and got his first smartphone before he was 11 years old. Marketers immediately assume that the solution is bombarding their customers with Google AdWords, Facebook, and Instagram. But invading a person’s social media risks turning consumers off.
For a college freshman, their smartphone is a window to their world and human connections. Rather than cramming advertisements into social networks, use the tools to provide a superior customer experience. First, forget about text message and social media marketing and use the platform to provide as much service as possible. In the college store space, this can mean rental return reminders, book buyback offers based on purchase history, or helpful tips for freshmen on campus. Second, lower the barriers to being reached and respond to your customer’s text messages with a real human. They don’t want to text “Hours” to figure out when you are open, but they do want to ask you “I need 17x22 drafting paper for my design class. Do you have it?” Your approach to messaging could turn these inquiries into additional sales.
Retail is not dead… far from it, but innovation in retail will be the key to retail thriving. Stores that curate a unique product selection, hire passionate and knowledgeable staff, create an experience that draws customers, and foster human connections with their customers will win. For those who don’t bother, well, there’s always Amazon.