What retailers can learn from oversease entrants

Zara, H&M, Uniqlo and TK Maxx are a few global giants successfully selling apparel within Australia at discounted prices. So should competing retailers fear from them or learn from them?

International retailers bring with them knowledge and processes gained by doing the hard yards in larger markets. With a deeper desire and understanding of the customer experience they are able to measure, understand why and improve;

  • Staffing effectiveness
  • Product relevance
  • Promotion pull
  • Layout engagement

After all, the advantage that brick and mortar stores have over online is the physical experience. From store design, through to product touch and feel and staff liaison.

As most of us like to get out and about, understanding how customers engage within your physical environments empowers businesses to apply a 'test, fail and evolve quickly' mentality to almost everything including operations and marketing.

With Amazon currently setting up local distribution, more than ever differentiation is vital - and experience holds the key. 

TK Maxx recently entered the Australian market by taking over and re-branding 35 Trade Secret stores. From 0 to 35 is a big leap and you would expect constant measuring and adjusting as this business finds its feet locally.

My wife has purchased from our local TK Maxx store a number of times, so I figure they must be doing something right? Having visited a client a few doors down, I decided to take a peek and see what all the hype was about. 

First thing I noticed was the dual lens door counter - ok so now I was even more curious. Walking through, the store was a good size and had traditional aisles surrounding heaps of racks, shelves and product with a good mix of staff.

This is when I realised how important understanding customer behaviour was to TK Maxx. The floor was scattered with fisheye cameras, Wi-Fi and other sensors.

..and rightfully so, with 37 stores you want to know;

  • What sections people are going to
  • How long they spend in sections
  • How sections visited correlates to product categories purchased
  • Visits throughout the day, week and month per store and across the whole network
  • How marketing impacts visit flow by store 

It's clear these guys are extremely serious. The great thing here is that the evolution of Internet of Things (IOT) has put this kind of tech and insights within the reach of all business.

So with this kind of Intel what can TK Maxx stores do?

  • Make more accurate and faster decisions
  • Test new product and category pricing -engagement vs sales
  • Adjust store layouts for improved flow, stick ability and up-sell
  • Understand what marketing initiatives work with related benefits - visits, sales
  • Drive biggest gains
  • Fail and adjust quickly

With strong growth in the Australian market and 6% increase in sales in its second quarter, it appears TK Maxx is off to a great start. 

With customer loyalty being key, I am looking forward to seeing how TK Maxx tackles;

  • Accurately identifying unique visits
  • Identifying new vs repeat customers
  • Queue management
  • Digital engagement

While we can learn and evolve quickly by studying these global giants, without accurate visit and behavioural insights it becomes difficult to validate assumptions and move quickly.

The good news is that these insights and more are within reach and can drive game changing decisions for business.

Including visits as part of your store performance provides a whole new perspective, however be sure to track instore movements and areas visited, as this will help answer questions around ‘why’ this or that didn’t happen that a store visit won’t show.

Being able to measure in-store visits, return visits, visit duration against where people are going within your stores is critical. It enables retailers to better understand and improve customer experience and improve sales performance.

Through small enterprise devices Onsite Insights (OI) provides operational visibility for physical stores. Helping businesses understand the relationship between- how often customers visit, what areas they look at, staffing, wait times, marketing and sales.

Find out how queue management can boost sales in your stores. Email Onsite Insights or call us on 1300 664 550.

 

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