Recurring revenue is a thing of beauty for the bottom line at most businesses. Once the consumer is hooked on the product or service being provided, they might not mind paying the accompanying bill every month. The mobile phone industry is a good example of this situation. In a recent blog post at The Retail Doctor, Bob Phibbs prescribes a few steps that retailers can take to improve their revenues this year and renting out products is one of his ideas. This strategy will appeal to the thrifty values many consumers now have.
The truth is that many retailers are struggling to maintain a healthy cash flow while they compete with the likes of Amazon. Real success means retailers must come up with some out-of-the-box thinking and marketing campaigns. Because most consumers are still in the thrifty mindset, retailers must position themselves as being helpful in that regard.
Phibbs highlights the success of Zipcar as an example of Millennial comfort with renting instead of owning things. The rental model works because consumers prefer to pay for a product only when they want to use it. This concept could be applied to other categories like bicycles or baby furniture.
This year, specialty retailers can also improve their prospects by being different. Phibbs encourages them to work with Amazon instead of against the behemoth. Retailers who are lucky enough to get customers walking through the door should have staff people available to engage the showroomers, talk with them about they've been viewing online and try to upsell them to a different product.
In addition, retailers might want to remember that customers are overwhelmed by a surplus of everything these days – especially product choices. Maintaining an attractive bricks and mortar space, one that is clean and decorated conservatively — think Apple store — might be the first step to inviting customers into a unique selling atmosphere.
Phibbs argues that it doesn’t matter if a retailer doesn’t have a specific product on the shelf. The salesperson can educate the customer, make the sale and make sure it is quickly delivered to the customer’s home.
According to Phibbs, retailer time and money will be better spent on smart ad campaigns, especially in out-of-home location this year. Consumers are using their smartphones while sitting in traffic or waiting for bus. This is prime shopping time and smart retailers are figuring out ways to connect personally with these customers to promote the purchase or rental of their products and services.
To read all of the advice Phibbs has for retailers in 2013, click here.[Source: Phibbs, Bob. 12 Retail Industry Facts for 2013. Retaildoc.com. Web. 29 Jan. 2013]