It is much more profitable to sell to loyal customers than to constantly look for new ones. A Bain study showed that just a five percent growth in customer retention could boost profitability by 75 percent.
Small retailers are starting to use this insight to build loyal online communities, which do the selling for them. No wonder a brief Google search on the words 'e-commerce' and 'social media' turns out 101 million results, with articles such as '12 Social Media Tactics to Drive Traffic to your E-commerce Site' being the most visited. Another way is through loyalty programs, which 30 percent of independent retailers are planning to implement in 2016. This is on top of the quarter of independent retailers who already have a loyalty program in place.
They find the right support
Finally, one cannot 'grow small' without a reliable network of business partners, whether it's like-minded companies to cross-sell services and expand the product offering, or other companies to provide operational support in areas where expertise is lacking.
One example of this is logistics. According to a recent FedEx study, about 70 percent of consumers surveyed listed shipping-related factors as the most influential in their decision to buy from online retailers in other markets. That is why small retailers look to third-parties for their expertise and capabilities in potentially complex areas, such as the implementation of a policy that allows customers the option to return items purchased online to a physical store.
#fashion is a game changer
As global product availability is almost a non-issue these days, smart small retailers in the fashion and luxury sector need to constantly rethink their strategies, find ways to stand out, grow, and engage their customers without compromising the essence of their appeal.
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