Advice for retail CEOs: Don't forget community engagementStaff Writer | January 25, 2018
Increased pressure from large online retailers is reducing brick-and-mortar retailers' sales and profits, causing numerous store closings on both local and national levels.
Local retailers A relatively low-cost strategy
According to a recent study from the University of Alabama at Birmingham's Collat School of Business, community engagement brings positive outcomes for retailers in two ways: by directly building consumer trust in, and commitment to, the retailer; and by lessening the importance of the retailer's economic value proposition, or the perceived value of products and services sold.
"The retail landscape has been reshaped with the explosive growth of e-retailing, causing local brick-and-mortar retailers to rethink their marketing strategies in order to survive and thrive," said Donald Lund, Ph.D., associate professor of marketing in the UAB Department of Marketing, Industrial Distribution, and Economics.
"Our findings show that local retailers build stronger customer relationships through community engagement, helping to overcome economic disadvantages compared to larger online retailers."
Results from a survey of more than 1,700 consumers show that, as retailers' community engagement increases, the impact of economic value decreased.
This shows that community engagement, a relatively low-cost strategy more accessible to local as compared to online retailers, can help combat the economic disadvantages—such as smaller markets and lower volume, among others—local retailers typically experience compared to larger online competitors.
Local retailers should focus on building strong relationship with customers, and ultimately create value in these relationships to provide high returns on investment, as well as leverage other resources that result in better financial performance for the retailer. ■