Retail Marketing Strategy: Your Key to Staying Competitive

Marketing your retail store is more involved than you might think. A great retail marketing strategy starts when you’re first developing your business plan, and is something you have to continually reassess to ensure peak performance.

As anyone who has owned or operated a retail store can tell you, setting up a successful retail business takes an immense amount of planning. Managerial responsibilities, like payroll and bookkeeping, are crucial, and retail stores need to have a sufficient supply chain and inventory management plan in place.

Ask experienced retailers what their business can’t live without, however, and you’ll probably hear the same answer. A strong retail marketing strategy can separate a successful retail store from one that can’t get customers in the door.

A good marketing strategy highlights the things that make your business unique and speaks effectively and directly to your target audience. With that said, let’s get into the specifics of how you can craft your own highly effective retail marketing strategy.

Marketing Starts at Square One

Many retailers think marketing comes second to getting a business off the ground. On the contrary, it should be in the back of your mind during every step of developing, planning and opening your retail business.

Think of the first steps you take when you start to develop an idea for a new business: you build a business plan. In doing this, you have to turn your abstract business model into something more concrete as you determine your brand, choose a location, and decide on a product lineup.

Addressing these needs requires that you have a strong understanding of the people that you think will buy from you. This group of people is typically referred to as your “target market” or “target audience.” When you were writing the marketing strategy section of your business plan, you should have considered this audience and created an overall business plan that would allow you to best address their habits, needs, and wants.

Let’s say, for example, that you want to start a business selling maternity clothes for expectant mothers. Your customers will be pregnant women. Your location should be in an area where pregnant women will come across your store. If this isn’t the case, you’ll have a tough time acquiring customers and may need to do something drastic to save the business, like start selling online.

If you don’t have a solid understanding of your target audience yet, don’t sweat it. We’ll show you how you can start to define this group of people below.

Who Is In Your Target Market?

Here’s where marketing strategy comes into play. Your chosen location, brand identity, merchandising strategy and other critical aspects of your business will often meet the needs of a certain group of customers, referred to as your target market or target audience. Understanding this group of people means defining their gender, age, income, marital status, location and other factors like their wants, needs, and challenges.

When working through this exercise, you might find that you that can separate your target market into several buckets of like-minded individuals who are likely to purchase your products. For example, perhaps pregnant women and grandmothers are both in your target audience. You’ll want to account for and market to each group differently, as we’ll discuss later in the article.

Let’s use this 2012 survey about the demographics of shoppers at the nation’s largest retail stores as an example. According to the data, Target shoppers are:

• 60 percent female
• 53.8 percent married
• The majority have a household income between $35,000 and $99,000
• The majority are between 25 and 54 years old

The idea is that the intersections between these identity factors don’t necessarily represent all of your customers. Using the Target example, a marketing strategy that addresses a married woman from a middle-class household won’t reach all of their target audience, but it will most likely capture a substantial segment of their customers.

How to Define Your Target Audience

Understanding who your customers are is one of the most important parts of starting a retail business. Unlike the last example, however, most retailers don’t have information about their consumers at their fingertips, so figuring out how you’re going to reach your audience isn’t as simple as looking at the numbers. This is where market research comes into play.

Market research describes the use of product research, empirical research, surveys, customer studies and other factors to learn about your customers and the market for your product.

Market research can take a few different forms:

Primary research – this form of research encompasses studies and inquiries that you have an active role in designing to learn more about the people buying your product. This includes giving your customers surveys when they make a purchase, hosting a focus group about a product, or hiring a third-party research firm to carry out a study about buyer behaviors.

Secondary research – This form of research is the act of deriving insights from existing research and looking at whatever analytics you have available about your customer base. If you conduct your business online via an online store, you’ll have more technical tools at your disposal, but brick and mortar retail stores have the means of secondary research when they use insights derived from their business software. Modern POS systems can collect data about the people who make purchases at your store that can help you understand shoppers’ rationales.

Building Buyer Personas

Market research goes a long way towards learning how to reach your customers, but as you gather more information about who your target market is, you’ll need to refine your research to focus your marketing efforts.

Creating buyer personas of sample customers with personalities and motivations will help you understand the way people relate to your brand and help to guide the messages and tactics you use to market to them.

Branding

Building your brand is about deciding on the narrative you want to tell about your business. When it comes to making your business a success, it won’t be easy, but an essential step is forming a cohesive brand identity.

The first step in forming your brand is understanding how your business differs from competitors. Ask yourself: do my products have features that aren’t common among others on the market? Does my retail business offer something unique as a part of the shopping process? Savvy marketers will also go far beyond the intricacies of their product line and think about the feelings, messages, and ideas you want your business to communicate with your customers.

When someone thinks about your business, what image should they have in their mind? A smart retailer will then ensure that these images, feelings, and ideas are present in all marketing messages regardless of whether they’re in a traditional print publication or a digital channel like social media.

Differentiating Your Brand

You can separate your brand from competitors in a seemingly endless quantity of ways, from a legendary return policy to a great loyalty program, to products that are higher quality than your competitor’s products, the choice is up to you.

Primarily, you should be thinking about what exactly differentiates your brand and helps you better satisfy shoppers’ needs. Being able to answer these question builds the basis of a competitive advantage, which can work to solidify your market share.

If you run a shoe store and feel your position in the market is based on selling the most comfortable shoes in the industry, your goal is to use your retail marketing to communicate that to your target consumers.

You can do this by developing one or more unique selling points (USP). Every business should have selling points that give customers a reason to use their products or services. The selling points that are unique from those of the competition are the reasons why a consumer should buy from you over other businesses in your industry.

Many companies market their USPs through the use of a tagline that’s featured in the majority of their marketing channels. Domino’s Pizza used to guarantee pizza delivery within 30 minutes, or customers could get it for free. At first glance, this might seem like a simple marketing campaign, but it was more than that. It was a promise in the form of a USP that told customers who needed pizza fast, where to go and who to trust.

SEE ALSO: 3 Tips for Smarter Brand Management in Small Business

Store Atmosphere and Personalization

By now, you have a good idea of who your customer is and the best way to communicate with them. You also have a brand identity. Whether your retail operation is primarily in-store or online, your location or website should match that brand identity. Imagine that you own an outdoor/hunting/camping retailer and your brand positions itself as a store that sells an experience more than just products. Your brand narrative is all about how you started the business because you’re devoted to being in the wilderness and using your products.

You’ve created the impression that you’re more committed than your competition. However, if a shopper walks into your store to find sales associates who don’t know what they’re talking about, it won’t align with your USP and the brand narrative you’ve created. These would-be customers will likely walk away fast. This is the same with any aspect of your in-store atmosphere. If the look and feel of your physical location don’t match your marketing, customers are going to be less-than-enthusiastic.

In addition to an in-store experience that aligns with your brand narrative, customers also want to frequent brick-and-mortar stores with customer experiences that cater to their unique personalities and match their interests. In an increasingly competitive retail market both in-store and online, personalization is becoming more critical. This is also an area where a POS system can help you. With their CRM and customer marketing features, you can see a customer’s buying habits and past purchases. A savvy business owner will use this data to create sales, recommend products, and build relationships with their customers in a more targeted way.

If you have both a brick-and-mortar store and an online store, you’ll also want to make sure those experiences align with one another. Messages, imagery, and other branding elements should match one another. If you have the technology at your disposal, strive to use data collected about a shopper’s online purchases to customize their in-store experience and vice versa. This strategy is called omnichannel marketing, and it’s an approach used by leading retail brands to stay ahead of their competition.

Pricing and Promotions

Your retail marketing strategy will have a significant bearing on pricing and promotional planning as well. If your USPs concern your ability to beat the prices of your competition, you’d better be able to hold up your end of the bargain.

Pricing isn’t done in a vacuum, however. If you’re going to advertise low prices, make sure that you can get your products at low prices from suppliers.

Promotion is at the heart of marketing. How are you going to promote your store, based on your audience? Which digital marketing channels like search engine optimization, social media, or email will your target audience respond to the most? This is an excellent time to return to your buyer personas and market research to find answers.

Ongoing Research and Development

Once you’ve established your brand position, a store atmosphere that reflects the personality of your customers, a way to communicate to your markets and sufficient insights about customer behavior, you’re off to a great start. But if you want to be a top performing retailer, you still have work to do. If you’re not continually adapting, you’ll be left behind.

You should always be looking for new ways to increase sales, even when your retail business is established in its market. As new technology is developed, new products enter the market, and the landscape of differentiation changes, you may find that your unique selling points are no longer unique.

You should be continually working to improve your products, selection, shopping experience, and personalization by testing new approaches to these areas of your business. As you make more sales, you’ll have more customer data from which to learn about the behaviors of those who make purchases in your store. This overall process and approach to marketing is 100 percent necessary to maintaining your market share.

The Bottom Line

Contrary to popular belief, a retail marketing strategy is more than deciding where your marketing budget is going to be spent. Marketing touches on every part of owning and operating a business, and in the complex, competitive retail sphere, every aspect of your business should be part of a cohesive marketing plan.

SEE ALSO: The Comprehensive Guide to Local Store Marketing

Ryan Gilmore

As Inbound Content Marketing Manager at ShopKeep, a leading iPad Point of Sale System, Ryan Gilmore uses his extensive experience in small business technology to create educational content that helps merchants run and grow their businesses more effectively.