4/4/2011-Competing in a changing marketplace
April 4, 2011
Filed under Features
Industry experts provide ways to combat discount online retailers
Dan Witmer has watched customers use his dealership as a product testing ground.
The co-owner of Gear Head, a multibrand Ottawa, Canada store, has seen some consumers try on clothing before going home and buying the same item on the Internet. Even worse, he has watched as customers order a jacket on their Blackberrys — from other retailers — while still inside his store.
With more customers using the Internet on smartphones in the dealership or at home, competition from online retailers is growing.
“Competing with Internet shopping is a challenge for traditional dealers,” Witmer said.
His dealership is already competing with retailers in the United States, where many customers drive to for deeper discounts, but the Internet, especially on smartphones, has made his accessory-filled dealership face even more competition.
“The Ottawa area is very wired,” he said, “and as a government and high-tech community, most people turn to the Internet first when they decide to shop or obtain information.”
Consumers turn online because some of the same products are available, at prices that sometimes can be lower. Competing with online retailers isn’t always easy, but it’s certainly possible. Witmer and industry experts provided ideas on how to succeed in this changing retail market, including using the Internet to your advantage, creating value in the dealership, stocking the right products and making sure each person who walks into your dealership becomes a customer.
The Internet, though it houses online competitors, can be used as a resource to get customers into a dealership, rather than on to websites that offer PG&A. Jennifer Robison, national retail specialist for Tucker Rocky Distributing, says too few dealers take advantage of their online presence to promote PG&A and instead focus mostly on unit sales and events. Keeping in contact with customers after a vehicle sale will remind them that PG&A is also available.
“It’s constant communication, whether it’s a mailer, an e-mail and most importantly, while it’s still free, using social media to increase your customer base,” she said.
Gear Head, for example, uses the Internet to entice customers to visit the physical store. Information on its special offers, discounts and events are posted on the website, in e-newsletters and on its Facebook page. An event calendar on the website also features special days customers should be aware of. Gear Head also buys banner ads promoting its PG&A on websites of local radio stations and newspapers.
“We use our website and our promotions to get buyers into the store and actually experience the product,” Witmer explained. “It is there that we can give good service and show our customers how we can assist them in making the right choice.”
Focusing on what a dealership can offer over an online site will continue to bring customers in, sales experts say.
“People want to be reassured that they’re buying the right thing, especially when it comes to apparel, and websites don’t give enough information, so this is an opportunity for sales people to help their buyer feel more comfortable about their purchases,” industry sales trainer Don Cooper said.
Sam Dantzler, dealership trainer, 20 group consultant and owner of Junior Inc. and Sam Dantzler Powersport Consulting, advises dealers to take advantage of the shopping experiences in which most customers prefer working with a store employee.
“It’s that personal experience,” he said. “Clothes fit me differently than they fit you, differently than they fit my brother.”
He recommends dealers invest in opportunities where they have product in stock and can give personal advice on specific choices, such as apparel.
Cooper suggests dealers also create loyalty programs, which can generate repeat business by allowing customers to earn store credits after accumulating a certain amount of purchases.
Dealerships also can design an upgrade program, like Best Buy has recently launched. The electronics retailer’s program involves customers purchasing a Buy Back Program at the same time as the product, bringing the product back in good, working condition and receiving a store gift card for a redemption value determined by how much time passes between the original purchase and the return. Cooper said dealerships also should highlight their return policies, which may be better for the customer than online options.
“You’re trying to make that customer uncomfortable with buying from the other retailer without insulting the other retailer,” Robison said, adding that dealers should highlight that they run a legitimate, long-standing business.
One way to prove added value is by stocking items that customers are looking for.
“You as a buyer, as a store, you need to look for products that you can stock in your store that are different than ones online,” Robison said. “A lot of stuff that is online is usually closeout stuff, it’s not the latest, coolest stuff.”
Dealers should closely watch online retailers and see which products the competition offers, so dealers can vary their lineup accordingly. A dealer can always seek to sell a product that is one step better than the one the online retailer is selling and then promote the benefits of the newer product.
When a situation arises where dealers are stocking the same product as the online retailers, dealers need to make sure a customer isn’t just using the dealership as a dressing room or product testing station and that they’re buying something.
“That Internet retailer just sent a customer into your store, and you didn’t take advantage to sell them something?” Robison said. “Maybe they come in to check out a jacket, and you end up selling them a battery and a tire. Is that a win? Maybe you can’t compete on the jacket, but what else can you sell them?”
Turning a shopper into a customer by selling them something, even if it isn’t the original item of interest, is always better than sending him out of the store empty-handed.
“Re-educate yourself on sales, retail sales training,” Robison advised. “Competition is never going to go away; the guy down the street may, but online is just getting stronger.”
Witmer uses as many tactics he can to add value to his dealership, so he can take on all competition, but especially that of online retailers.
“We believe we have unique products that buyers must experience in person,” he said. PSB