How to Retain Customers for Local Retail Stores?

Local Retail stores almost always prefer repeat customers compared to new ones. Most of them tend to spend more on retention compared to acquisition. However, as online buying grows out of limits, the switching cost for average end customer is reducing. It’s becoming easier for them to find more loyalty benefits, services and better alternates onlineThat’s making customers switch more often and try new etailers frequently. In the last few months, more customers have switched stores than in the last 10 years. Thus, local stores need to think in terms of basic buying experiences to retain their customers and grow their business. 

Thin Store Crowd and Shrinking Shopping Bags

Evidently, retention is not just about maintaining store footfall, it’s also about addressing shrinking shopping bags of local customers. As they continue to buy more online, brick and mortar shops must come up with ideas to offer them e-commerce like experiences. Creating better in-store servicesdelivery-returns cycles, and engagement opportunities with local customers are how small business owners can maintain customer loyalty in these times. 

Simple ways to retain local retail store customers 

Can’t Sell What you Don’t Have – Watch your Stock Availability Cycles 

Stores being out-of-stock is the 3rd top cost driver for business owners. Retailers generally keep quick inventories based on their sales volume to cover ‘Over the Counter (OTC)’ sales. These stocks tend to dry up during holiday seasons and peak demand runs. Now, most local retail stores do not have enough space for expanding inventory or the delivery staff to manage the high demand flow. Subsequently, customers confirm that frequent stock-outs is a major reason why they switch stores (48%-USA and 32%-Australia, Source: McKinsey 2020). 

However, local customers who have experienced Automation in Stores claim that they have seen little to no stock outs in recent times (56%, Capgemini 2021)Solutions like Click and Collect Lockers have helped local retail store owners to maintain a larger inventory and maintain efficient delivery ops at far low costs. The unchallenged truth remains that keeping your customers is all about delivering what they need – when they need it. 

Also read [Blog]: How to plan for Post-COVID order fulfilment surge? 


Fresh is In – Increase your share of Fresh Shopping Products 

It is no longer a secret, millennials are aggressive about their farm fresh deliveries and fair-trade products.” Three-fourths of neo-customers are willing to pay premium on farm fresh deliveries compared to traditional consumers (Deloitte Insights, Oct 2020). To serve this demand for grocery, poultry, meat, medicine and meals, local retail stores cannot just rely on alternative hyperlocal fleets (refrigeration trucks, mounted bikes, etc.). 

Not all stores have the means to make same-hour-deliveries to serve the farm fresh demand. What they can do is switch to temperature-controlled delivery hubs to get closer to the customer and at the same time widen the retrieval window for end-customers. Especially pharmacies often disturbed by complex fleet schedules of refrigerated delivery vans can seamless delivery to customer with smart lockers. 

Not only do local retail stores retain their neo-customers with Refrigerated Lockers, but they also save on unnecessary local fleet costs. Alternatively, they can also use smart delivery routing apps and avoid non-route orders by separating fresh orders from others. 

Don’t just be Local, Act Local – Be visibly Local 

In addition to farm fresh supplies, the return of street high is also coming up strong in global markets. 60% of Buyers now flaunt their support for local and small businesses compared to national and largescale retail chains (in India 88%, Source: Adobe Consumer Outlook 2020). They prefer local producers, product variants, store experiences and more. However, the common concern remains that of local visibility. 

Given the persistent usage of 3P delivery fleets, local retail stores do not get to be recognised as the ‘Next Door Business’, which customers expect them to be. Instead, the delivery companies are seen as local fulfilment experts. Thus, customers tend to switch based on lasmile delivery experiences compared to store specialities. Using branded self-service delivery terminals that act as dark stores for local retailers can help them to increase store visibility and retain their regular customers. 

Other are Reading [Blog]: Why Drug Stores should adopt Buy-Online-Pickup-In-Store Model? 

If it Fits, Buyer Clicks – Improve Convenience at Local Retail Stores 

It’s no longer about just walking in, picking your needs, and checking out; retail is becoming more of a personal experience than just transactions. Customers have shown a keen interest in buy-online pick-up in store solutions, voice-based ordering systems, social media marketplaces and more. They no longer want to feel like the ‘unpaid sales assistant’ on their average store visit (64% poll response, Capgemini Automation in Retail Study 2020). 

While large retail chains and e-commerce giants win with orders-at-scale; local retail stores can win bigger with deep customer connections. Starting with active communications for orders via common channels like app messengers, SMS, push notifications; local stores can keep customers informed about their orders. Offering added security with anti-porch theft Automated Lockers, can also enhance customer loyalty. They can even choose to offer 24/7 pick-up and delivery to seamlessly fit in the lives of their patrons. The more customers feel easy, the longer they’ll stay with their local store. 

Sell Healthy, Earn Handsome – Address Safety Concerns of Local Buyers 

COVID-19 Pandemic has changed retail customer behaviour for good. Shoppers are no longer stepping out to buy non-essentials and are expecting safe order processing from retailersend. 66% of customers have confirmed feeling safe if their local retail store has contactless delivery and checkout options. 33% have changed their store preference based on health and safety concerns in the last few months (McKinsey, August 2020). 

Smart retailers have chosen to go beyond common safety measures of sanitization and monitoring. Automation of Retail orders with Curbside Deliveries, Click and Collect Lockers, and Drive-Through Deliveries has recently caught pace across the globe. Arrangements made by retailers in public spaces with Corporate Day Lockers, Residential Terminals, Campus Lockers and more are being welcomedEven, Medical Drop-off Counters are being converted into Instant Pick Up Stations with Automated Pharmacy Lockers. Out of the 44% customers who adopted Click and Collect in last 12 months, 78% are expected to continue buying that way (Accenture Coronavirus Consumer Habits Survey 2021)Local Retail Stores must grab this opportunity to steer ahead of e-commerce giants. 

Smartbox Insights [Blog]: How can Smartbox improve Postal Delivery Networks for good. 

Higher Expectations of Returning Local Retail Store Customers 

As restrictions lift retail store customers are beginning to regain their pace of pre-COVID buying. They have higher expectations from local retail stores this time. In general, as well, returning customers tend to expect more benefits and personalized experiences from their trusted stores. 

Retention is all about identifying the pulse of local customers and replicating their demands in the most efficient ways. However, as history has shown – retailers have always been adept and smart enough to mitigate any change in marketsFrom dial-in orders, to the internet revolution and now restricted buying; retailers always have and will prevail. 

Has this article changed the way you look at your end-customer experiences? Get in touch with Smartbox team to learn more. Book a direct demo here or mail us at 



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