Retailers need to raise the bar with customers or risk losing £120bn from defections
London 22 March: Today’s retail industry offers consumers an explosion of choice across brands and touchpoints. It is more important than ever for retailers to connect with their consumers and build a loyal customer base to remain competitive. However, our recent research has shown that, far from being loyal, many UK consumers are unsatisfied with many aspects of their retail experience.
With a third of consumers finding shopping more frustrating than five years ago and more than half of all shoppers using a greater number of retailers than five years ago, these are worrying times for the retail community. Clothing (where 61% of consumers are shopping around more) and footwear (58%), along with food and grocery (52%) are most affected. If brands are not able to maintain customer loyalty, they risk losing more than £120bn of consumer spending in total from defections to other retailers from dissatisfied shoppers.
Many of today’s consumers have a jaded or bored attitude and a ‘been there, done that’ attitude towards shopping. Consumers own more than previous generations – so are harder to persuade to purchase more – and are also time-pressured (68.3% of consumer have less time for everyday shopping than they used to), so convenience (the most important factor for 54.9% of consumers) and speed has taken priority, especially when looking for everyday basics such as groceries.
All these factors, combined with supply side considerations such as a more intense focus on price, a deflationary retail environment and an even greater choice of products and services mean that retail growth will be much harder to achieve over the next ten years. So, it is vital that brands are able to secure customer loyalty and attract shoppers to spend at their stores.
While it is more important for brands to grow a base of loyal customers, today’s vast online and offline retail environment has meant that it is incredibly difficult to maintain a brand loyalty that was previously taken for granted. There are no easy answers, however retailers need to do more to develop their business with the customer at the centre of their plans. In a world where 56% of consumers look for personal recommendations before deciding where to shop, while 51% are influenced by their personal experiences, brands should invest more in their overall service to drive loyalty and reduce the dissatisfaction figure.
An in-depth understanding of changing consumer behaviours is essential for brands to become more consumer-centric. This doesn’t just mean knowing what customers want to buy but truly understanding how and where they want to buy the product or service, their motivations and reasons behind the purchase and what they want from their overall shopping experience.
Retailers also need to think more carefully about how to reach customers and reappraise traditional marketing techniques – many of which are still relevant, but are less impactful and influential in today’s environment than they once were. With social media a very effective tool to extend reach and target specific end-users, brands should look to shift a portion of their marketing budget away from traditional media such as television and print and place this towards digital media. This wider understanding will help retailers secure and lock in loyalty in the era of the unfaithful consumer.