Feb 13, 2024 7:03:08 PM
Employee experience | Customer experience | Operations | Grocery retail
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Explore this blog to discover exclusive insights into the strategies transforming the discount retail landscape, courtesy of YOOBIC's ebook, 'The Complete Guide To Thriving Discount Store Operations in the Age of Transformation.'
Here’s one pandemic-era business outcome no retailers could have anticipated: Discount retailers stepping into the spotlight to become key winners while other retail sectors struggled. Through the economic rollercoaster of rising inflation and supply chain twists, discount retailers like Lidl, Dollar General, and Aldi thrived. How?
Discount retailers have shown remarkable strength in the face of difficult economic conditions. They go beyond simply cutting costs and instead prioritize offering consumers a wide variety of high-quality products at affordable prices. By actively engaging with their communities, utilizing technology and staying up-to-date with the latest trends, discount retailers are able to foster customer satisfaction and loyalty.
As we continue to make strides into 2024, the retail industry is expected to endure a remarkable 6.7% surge in global sales. This exciting forecast opens up a world of possibilities for discount retailers to not only continue thriving, but even expand their customer base and reach new markets and shoppers who might not have considered the discount store scene before now.
Key growth opportunities for discount retailers to capitalize on in 2024 include the shift back to in-store shopping, evolving spending habits, and empowering frontline teams to create store experiences that dazzle. Let’s take a closer look at each one.
Expect increased competition as shopping habits shift
In 2024, brick-and-mortar stores are gearing up for a triumphant return, emphasizing the renewed significance of in-store shopping as consumers seek tangible experiences and personal interactions. While online shopping continues to evolve, projections indicate that brick-and-mortar sales will account for 85% of total retail sales this year, marking the most significant growth in offline sales since the post-pandemic rebound of 2021.
Discount grocery giants like Aldi and Costco are not idly standing by; they're strategically expanding their brick-and-mortar footprint, anticipating a surge in shoppers returning to physical stores.
According to the Economist Intelligence 2024 Consumer Report, global retail sales are expected to surge by 6.7%, with brick-and-mortar stores accounting for 85% of those sales.
Discount grocery giants like Aldi and Costco are not idly standing by; they're strategically expanding their brick-and-mortar footprint, anticipating a surge in shoppers returning to physical stores. Aldi, a German discount grocer, plans to acquire 400 new grocery stores in the south-eastern US, while Costco has plans to open 30 new Sam's Club stores.
But here's a twist: the White House Council of Economic Advisers suggests that the optimistic start to the 2024 economy could lead shoppers to revert to their pre-inflation shopping habits, posing a challenge for discount retailers. To address this, discount retailers must be prepared to adapt their strategies, considering further price reductions, enhancing loyalty programs, and improving the brick-and-mortar shopping experience to entice customers back into their stores.
Recognizing the importance of creating engaging store environments, home improvement retailer Lowe's is investing heavily in personalized recommendations, workshops, and events. This emphasis on immersive experiences aligns with the shift back to in-store shopping, especially among younger generations who crave interactive experiences.
"We're definitely seeing a shift back to in-store shopping, especially among younger generations who crave more immersive and interactive experiences. We're investing heavily in creating engaging store environments that offer more than just products, but also events, workshops, and personalized recommendations." Marvin Ellison, CEO of Lowe’s (CNBC, Jan 2024)
Discount retailers need to keep this strategy in mind, understanding that enhancing the in-store experience is crucial for attracting and retaining customers and maintaining a competitive edge in this dynamic environment.
Study the playbooks of discount retail winners
To thrive in the evolving retail landscape, it's essential to study the playbooks of industry leaders. Dollar Tree, Dollar General, and TJX Companies are gearing up for the ever-changing consumer spending in 2024 and beyond, and their strategies offer valuable lessons for fellow discounters.
- Dollar Tree's move beyond the $1.25 price point broadens its appeal to diverse budget ranges, opening doors to new markets and expanding its discount retail footprint.
- Dollar General's focus on simplifying product offerings and enhancing store layouts ensures a seamless and enjoyable shopping experience, bolstering customer satisfaction and product variety.
- TJX Companies' decision to prioritize brick-and-mortar retail over HomeGoods' ecommerce arm highlights the enduring value of in-store experiences, drawing in shoppers seeking the tactile pleasure of traditional shopping while setting itself apart from online rivals.
These industry leaders are not just navigating the discount retail landscape; they are leading the way to prosperity with innovative strategies tailored to evolving consumer preferences. For other discount retailers, following their example could lead to success. By adopting similar tactics and adapting to meet changing consumer needs, discount retailers can carve out their own share of success in 2024 and beyond.
Empower your frontline to provide an excellent store experience
Creating a fantastic in-store experience becomes crucial, particularly if shoppers revert to pre-inflation spending habits, where low prices and a wide selection might not be sufficient to compete against non-discount retailers.
While non-discount stores can focus on captivating customers with brand narratives, aspirational designs, and immersive atmospheres, discount shoppers prioritize cleanliness, organization, a welcoming ambiance, and helpful assistance.
The solution lies in empowering frontline teams with consistent training, effective communication, and high levels of engagement. Discounters like Walmart and Lidl, non-discount fashion retailers such as francesca’s and AdoreMe, and organic grocer Naturalia, are already leveraging technology to streamline operations, enhance communication, and upskill employees, setting a standard for excellence in delivering a store experience that dazzles customers.
However, many retailers across the board struggle to achieve this due to ineffective processes and outdated tools. Recognizing this, winning retailers are prioritizing the enhancement of their frontline experience, starting with upgrading their technology.
Let's take a look at these retailers' tech-driven optimizations:
- Me@Walmart App provides associates with personalized schedules, training modules, and communication channels, boosting engagement and knowledge.
- Lidl streamlined the monitoring of operational execution and improved the visibility of compliance in its 1,570 stores in France.
- francesca's centralized all store communications in their mobile app reaching 3000+ employees with important messages and updates.
- Adore Me digitized all store processes like weekly checklists, marketing and promotional campaigns and completed 1100+ tasks in 2023.
- Naturalia upskilled more than 1,500 frontline employees during the flow of work.
Successful retailers prioritize enhancing frontline experiences, exemplified by these retailers who have leveraged tools to streamline operations, enhance communication, and upskill employees, setting a standard for excellence in customer service.
Gear up for operational excellence in discount retail
In 2024 and beyond, discount retailers aren't just players; they're the game-changers. Affordable prices, a magnet for new customers, and a shopping experience that hits the sweet spot – that's the winning formula for discount retailers to shine in the ever-evolving retail landscape.
To capitalize on this growth, discount retailers must gear up for operational excellence. With brick-and-mortar stores poised for a resurgence and potential shifts in consumer spending habits on the horizon, discount retailers need to adapt their strategies and empower frontline teams to deliver exceptional in-store experiences. By studying the playbooks of industry leaders and embracing innovative strategies, discount retailers can continue to lead the way in the retail revival of 2024 and beyond.
Ready to uncover 5 key tech-powered strategies to improve your discount store performance? Grab your free copy of "A Complete Guide To Thriving Discount Store Operations in The Age of Transformation" today!
Get in touch to see these strategies in action and learn how YOOBIC helps discount retailers like Lidl and Home Bargains drive operational excellence and efficiency through digitized retail store operations.
