What are the three crucial things that independent electrical retailers need to prioritise in their business? Hughes managing director Robert Hughes explains
1. You must have a fully formed online strategy that supports and complements your shop-based activity.
Some retailers think that the internet is something that’s too hard to do and they don’t incorporate it into their strategy. For us, it’s in the middle of everything we do – it’s at the core. The majority of the customer purchase journey will touch the web either at the awareness, research, purchase or feedback stage. You must make your shop part of that journey, even if it is just for the collection [of products], otherwise you will have a diminishing customer base.
Your marketing budget must be skewed to online media to break into this shopping journey.
The web is not a threat, a luxury or an option – it is a necessity. It is your shop window, your shop door, your shelf display and your shop counter. Spend on the web what you would spend on these.
You have to make the web integral to everything you do. If you haven’t got a fully-formed internet strategy that complements your shop, then you’re going to struggle in the future.
2. If you are a shop-based electrical retailer, you are only as good as your second speciality. Find it and nurture it.
You have lots to choose from:
- Smart home
- Rental
- Internet supply
- Kitchen design
- Electrical contracting
- Business-to-business sales and rental
- Specialist equipment – commercial appliances, IT, top-end audio
- Equipment service
You’ve got to look at the products you sell as a means to something else – if you don’t have that something else, I think you’ve got a problem. For us, 40 per cent of our group turnover is coming from sales to consumers in shops – that is the only part of our business that’s struggling. The other 60 per cent – whether it be the internet, business-to-business, smart home or rentals – is growing. But we need the 40 per cent to get the other 60 per cent. If you haven’t got the other 60 per cent, you’d better be a really good electrical retailer.
I’m not confident that we’re good enough to survive just on straight electrical retailing. It’s important that you find that speciality and nurture it.
3. Stay relevant to your customer.
If you walk away from key markets, such as TV or connected audio, then expect customers to walk away from you.
Find a reason for customers to visit your shop through in-store theatre or personal interaction, as you won’t beat the web on price, information, or availability.
Don’t overlook the under-30s – they are called ‘generation rent’ for a reason. There’s a whole generation of people who rent everything – they don’t own their car, their house, their phone or their media. Our rentals business has never grown faster and it’s to a new generation. If you’re not in it, consider how you can get into it. You’ve got to use your imagination and see how you can leverage your brand and all your capabilities to make money in other ways.
You have to remain relevant to your customers – you’re not going to beat the internet by having a bigger range, by providing more information or being able to deliver quicker – but what you can do is offer personalisation and localisation. That will keep you relevant.
