Interview with Marcos Álvarez, retail consultant and store expert
Marcos Álvarez is one of the largest professionals in the retail sector in Spain, with over 20 years of experience in the field. He currently works as a consultant and expert in retail, he is the creator of the web page www.porbuencamino.com and author of numerous books .
In this interview, Marcos tells us about the prospects of the retail sector and how to overcome current difficulties.
- Hi Marcos! Could you tell us about your experience in the retail sector and reveal which the challenges that retailers are facing nowadays are?
There are several: the main ones concern the implementation of customer-centric strategies, essentially succeeding in attracting customers and encouraging their visits to the store. Currently, the biggest problem for retailers is the decline in the number of visitors coming to the store, a symptom of the boredom that consumers experience in buying “as always”, which is strengthened by the growing boom in online sales and new consumption habits.
- In your last book, you talk about the problems of physical commerce. How do you think retailers have to cope with these changes?
Firstly, it is necessary to strive and understand the needs of the modern consumer, forgetting the obsession with sales, and focusing on the implementation of the shopping experience. Today, the customer has all the information he needs and has immediate access to the product: for this reason, the act of purchase should be free of friction and provide added value to the product. The customer must be able to live the in-store experience as a protagonist, no longer as a spectator.
- Many retailers only use their financial metrics (total sales value) as an indicator of their business efficiency. Do you think it is adequate?
It is surprising that they are still using this type of indicators as measuring the efficiency of their businesses. The total sales is a mere result, while the KPI to be measured must be consistent with the company’s strategies (customer satisfaction, level of loyalty, omnichannel…) and focused on actions, rather than final results.
- We have observed some changes in the form of assigning bonus targets to employees: retailers now prefer to reward them by the conversion ratio, rather than the volume or number of sales. What do you think about it?
It is a fundamental indicator, but it is important to work it properly because, often, shop staff find it difficult to understand the relationship between their actions and the results obtained in the ratio. For example, it is well known that tens of thousands of sellers crouch every day when they pass the door of the shops where they work, in order “not to be counted”. It is a pity that, due to poor communication, such an important KPI can generate unwanted concern and behaviour.
- How important is the location of a store? What do you think of the Cost per Potential Customer (CCP) as equivalent to CPM or cost per impression of the online world?
It is well known that the three keys to success in retail are: location, location, location! An example of the change in trend in retail are the locations chosen by category killers such as MediaMarkt, Primark, Kiabi, Leroy Merlin … Everyone is studying openings in city centers, and this is because consumers increasingly hate going to shopping centers. In the online world, on the other hand, indicators such as Cost per Lead are increasingly important; many think that selling online just owns a website… All retailers, no one excluded, must make significant investments to get visits and traffic in their stores.
- As we approach the end of the year, what do you recommend to retailers for the next 2019?
Strive to understand customer needs and generate in-store experiences that encourage you to visit the store more often. The goal is to offer something that cannot be bought through the screen of a computer or a mobile phone.