A retail expert says start-ups can imitate Myer and David Jones by incorporating services into their business models, providing the services tie in with their core offer.
Brian Walker, managing director of The Retail Doctor, says as retail competition continues to intensify, the bigger players are beginning to broaden their offerings.
In addition to massages, manicures, personal shopping and weight-watcher clinics, retail giant Myer has announced its plan to introduce a Botox service in its latest attempt to lure customers into its stores.
David Jones has no plans to sell Botox shots – although it does offer women’s health checks – and is poised to add personal shopping to its raft of in-store services.
Walker says while the Botox idea is somewhat outlandish, it is expected that other larger retailers will also be forced to take action to compete with online retail.
“At the other end of the spectrum, niche specialist retailers need to stay true to their core offer… Any service they introduce must be highly relevant to their core demographic,” he says.
Walker says while it can be tempting to “be all things to all people”, the appeal of small retailers is their ability to provide exceptionally tailored service.
“Increasingly, customers are looking for something extra special. While it’s important to have a nice service and a good range of products, it won’t keep customers loyal,” he says.
“All it means to a consumer is: ‘You’re on my radar; you’re on my list.’ The trick is to get to the top of that list.”
Walker’s comments come on the back of Morgan Stanley research revealing in-store sales growth could slow to as low as 2.1% a year over the next four years, down from an average 5.9% over the last decade.
According to advisory firm Southern Cross Equities, department stores, electronic retailers and specialty fashion retailers are most at risk.
In order to combat the threat of online retail, Walker suggests offering personalised fitting sessions and delivering a direct database of information to consumers, promoting new stock and sales items.
He says small retailers can also align themselves to a service, such as beauty treatment vouchers, providing it matches the needs of their core customers.
“Ask yourself, what are we great at? What’s our forte? Where do we make our money? Do we have a natural invitation to do this and if we do, does it make sense?” he asks.
“If your key customer is a young woman, what’s her lifestyle? What does she do? How does she interact with social media? How are you relevant to that? Smaller businesses need to be particularly adroit at this and act accordingly.”