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Understanding and Managing Customers by Retailers in Competitive Times

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India is witnessing an unprecedented consumption boom. The economy is growing and the resulting improvements in Social, Economic and Population trends are driving the consumption demand.

India’s retail sector is wearing new clothes. The last few years have seen rapid transformation in many areas and setting scalable and profitable retail models across categories. Indian retail industry is considered to be one of the world’s top five largest retail markets in the world in terms of economic value. The Indian retail industry is currently estimated to be a US$ 500 billion industry. The attitudinal shift of the Indian consumer in terms of choice preference, value for money and the emergence of organized retail formats have transformed the face of retailing in India. In last few years, Indian consumers have gone through a dramatic change in lifestyles by moving from traditional spending on food, groceries and clothing to lifestyle categories that deliver better quality and taste.

Now retailers must understand that managing customers are a very complex task. This is due to varied decisions made by the customers can be influenced on the floor of the shop. Customers are vulnerable to the impressions and information they acquire in stores. Hence, retailers need to know customers very well and manage them to increase their sales by customer satisfaction. There are various aspects need to be understood by retailers while managing customers.

  1. Better Profiling of Customers

    Retailers need to understand the customers based on their behavior that not only impact the organization but impacts other customers. The retailers has to make a better profiling of customers by understanding the types of customers such as Defensive, Interrupter, Decesive, Indecisive, Sociable and Impulsive who visit to store environment everyday. Retailers need to be trained to satisfy these customers for increasing everyday sales.
  2. Increase Customers Time in the Store

    Retailer should create environment for customers so that they can spent maximum time in the store. The amount of time spent in the store has a direct relationship with purchase of a product. This would lead to a positive result for retailers to increase impulse purchases.
  3. Increase Interception Rate

    The more customers–employee contacts take place, the greater the average sale. This meant that in all probability, customer gets frustration, wandering around or confused or in need information. This will help customers taking right decision in choosing right merchandise. It has been seen that Indian customer generally don’t initiate establishing contacts with retailers in retail floor. It is the retailer to start interrupting so that customer can be satisfied.
  4. Give Due Recognition to Customers

    Personal recognition is needed for every customer. Because, customers want to go where they are recognized and given importance. It means treat every customer equally, trust him or her and initiate contact through store employee which increases the likelihood that the customer will buy something from the floor.
  5. Encourage Customers to Use Trial Room

    Most retailers think of trial room as a bathroom without the plumbing which is misguiding concept related to the aspect of store architecture and design. It is a truism that improving quality of trial rooms increases sales. Inside the dressing room, the shopper is captive in a very small place with nothing on their minds but a desire to buy something that will make them look beautiful. This is the moment to close the sale where all the charm and service of the sales force should be turned to fully. Many retailers like Shopper’s stop boast of colourful trial room for children.
  6. Focus on Category Management

    Retailers should focus on effective category management by stocking, displaying, placing and promoting each category accordingly. Display is nothing but in-store presentations and exhibitions of the products along with the relevant information. A good display of products always attracts people who otherwise might not go into the store, which led to buy something from the store.
  7. Manage Customer Traffic

    Customer traffic flow is like river. This has to be managed by a well-designed store layout to allow customers to see more merchandise by not creating traffic jams. Most of the customers are right handed, but they are also right footed. It means that the customers prefer to turn right and walk counterclockwise through the store. A correctly designed store attracts more traffic into the store. As customer enters into the store, they look to right wall at a 45-degree angle from the entrance. As such, retailer must provide something intriguing here to compel customers to stay more time in your store.
  8. Conclusion

As long as retailers exist, customers are integral part to them. It is necessary that retailer have to understand and manage the customer to satisfy customers. As competition increases and the customer becomes knowledgeable and demanding, the retailer needs information to stay ahead of his competitors and build a sustainable competitive advantage.

About the author: Dr. Manmath Nath Samantaray is Assistant Professor at Asian School of Business Management, Bhubaneswar

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