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Hidden truths: Retail Gazette hits the high street

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Talk about the death of the UK high street has been rife since the turn of the year with the UK retail sector hit heavily by recent government austerity measures and a downturn in consumer confidence. Against this backdrop Retail Gazette went under cover to find out the retailers giving themselves the best chance of succeeding in the current climate and the companies in need of a hefty nudge in the right direction.

On a retail tour of London’s Oxford Street alongside the UK Managing Director of customer insight specialists SMG, Jeremy Michael, we learned some home truths about how retail staff treat their customers and how both successful and struggling companies are presenting themselves to shoppers. It certainly was a mixture of the good, the bad and the ugly.

Mothercare

Secret shopper mission: To find a pram to accommodate a new-born child and a toddler

Retailer background: The maternity products retailer has not had the best of times in the UK over the last year, and recently announced that it plans to close 110 stores from its UK portfolio. Figures published last week showed like-for-like sales in the 15 weeks to July 9th 2011 continued to decline following a sluggish performance during the last full year.

Highlights/lowlights of shopping experience:

  • Uninspiring window display dominated by discount signs
  • Retail assistant was quick to offer help and showed good knowledge of items
  • Poor presentation of products in back corner of store
  • After failing to find a suitable product, we were advised to try John Lewis!

Jeremy Michael’s comments:

“The window was covered in large red ‘biggest sale ever’ signs that dilute the value of the brand as the company is more willing to do whatever it takes to get the customers in rather than promote the value and quality of the Mothercare products, which were completely absent from the window display.

“Whilst the Mothercare staff were engaging and knowledgeable about the different types of pushchairs and whether my existing pushchair is compatible with a buggy board, the staff too easily referred to an alternative store, John Lewis, to find the product we were looking for rather than help me commit to my purchasing decision.”

Result: No purchase made

Waterstone’s

Secret shopper mission: To buy a book for a sport-loving friend’s birthday

Retailer background: HMV Group recently sold struggling Waterstone’s to A&NN Capital Fund Management for £53 million as a way of reducing mounting debt, but under the guidance of the new ownership team and recently appointed Managing Director James Daunt there are plans to reposition the brand in an attempt to start increasing sales.

Highlights/lowlights of shopping experience:

  • A focus on deals, which does not distinguish it from other booksellers
  • Knowledgeable staff who offered convincing recommendations
  • Interesting marketing campaigns tailored to local audience were hidden at back of store
  • Confusing layout, with sports books incorporated into travel section

Jeremy Michael’s comments:

“On entering the store customers are bombarded with deals and offers, rather than the expected level of engagement. The staff were helpful in recommending sports autobiographies, and despite the confusing layout, the staff were on hand to show us where the books were.

“The travel section offered a personal touch as the members of staff had written captions under a selection of books that had staff personal recommendations. It is elements like this that I hope to see more of and Waterstone’s as it returns to delivering expertise rather than catering for the mass market.”

Result: Three books purchased for the price of two, as part of an in-store deal

Superdrug

Secret shopper mission: Husband to buy perfume for his pregnant wife

Retailer background: Superdrug has recently undertaken a nationwide marketing drive to help improve people’s perception of the brand and increase footfall in its 900-plus shops, with the campaign including the unveiling of less cluttered stores and the launch of its first ever loyalty programme.

Highlights/lowlights of shopping experience:

  • High level of personal service from retail staff
  • Relevant recommendations, demonstrations and advice offered by staff
  • Staff actively talking to customers across the store
  • Slight delay in making contact with us while we were waiting for service

Jeremy Michael’s comments:

“Superdrug staff have become consultants and are able to add value to the customer experience through a high level of product and service knowledge.

“The staff member on the perfume counter asked questions about my wife, brought out the most popular fragrances, gave us some testers and was knowledgeable on the pricing, sizes and gift sets available.

“The level of consultation and engagement we received added value to the customer journey and enhanced the overall brand experience.”

Result: Perfume purchased following a high level of personal service

Primark

Secret shopper mission: To ask for advice about buying a new suit

Retailer background: Primark’s is one of the company’s defying the current retail gloom, reporting impressive sales figures last week off the back of an increase in store numbers and a strong demand for its fashion offering.

Highlights/lowlights of shopping experience:

  • Brimming with shoppers and quite lengthy queues across the store
  • Customer service focused on tills rather than the shopfloor
  • Not a huge focus on special offers
  • Retail assistant and store management unwilling to take us to requested products

Jeremy Michael’s comments:

“While Primark may rank fairly low on customer service, according to Mary Portas Secret Shopper online poll, it is necessary to understand the brand experience and what expectations the store sets. For instance, Primark’s success is attributed to its model of low price and mass products.

“The retailer does not need to pride itself on high levels of customer service and consultation, as long as the customer sees that all the tills are open and the staff are doing everything they can to keep the queues moving, they will generally accept the time they wait and not be unsatisfied.

“Primark has opted for the ‘snake queue’ system which not only gives the customer the perception that the queue is moving fast, but what is crucial is that it is a fair queuing system. Retailers are also aware that customers find it harder to walk out of a queue when you have to pass several other customers.

Result: No sale but encouraged by busy environment

Sony Centre

Secret shopper mission: To buy a tablet device as a birthday gift for an uncle

Retailer background: Specific financial results for Sony Centres are not made public, but recent economic indicators suggest that the electricals market in the UK has been heavily squeezed by the downturn in consumer confidence, meaning there is a major battle for sales between businesses operating in this highly competitive and slow growth sector.

Highlights/lowlights of shopping experience:

  • Two members of staff did not greet us on arrival
  • The phone was constantly ringing and left unanswered in the background.
  • Staff knew little about Sony’s soon-to-launch new tablet
  • Retail assistant spent time allowing us to experience 3D TV, providing a personal service

Jeremy Michael’s comments:

“With customers prepared to spend a huge sum of money on an electrical product, they expect a high level of service and expertise in order to make sure they get the most suitable product for their needs.

“Sony is such a strong brand boasting extremely high quality products, but with consumers more cautious to spend money and a growing weakness in the consumer electronics market, people are more wary about purchasing large household items and electrical goods.

“It is becoming more important for these types of stores to deliver higher levels of customer service to ensure that customers not only return but recommend.”

Result: No sale

Conclusions

Much of what we saw provided a refreshing alternative view to the widely touted opinion that retail is a troubled sector; staff were generally quick to offer help when needed, they showed passion in their work and on some occasions sealed a sale that would not have occurred without their contribution.

However, there remain major concerns about the way some businesses treat customers and present their stores.

A lack of product knowledge displayed by some staff was alarming and the way some retailers had set up their shops could have been improved significantly. Recommending customers to a rival retailer before all potential routes have been explored has to rate among the largest faux pas moments.

Perhaps the major issue identified on the tour was the prominence of promotions and discounts along the street, with retailers of every shape and size promoting their cut-price deals.

The latest industry monitors would suggest that our experiences in Oxford Street are highly likely to be similar to those of many consumers in other shopping areas across the UK, and it is a concern because a strong focus on discounting can put a huge strain on company margins and could ultimately end in disaster.

Oxford Street and London’s West End is one of the most fully occupied retail hubs in the UK, reporting some of the best sales figures in the process, but what impact will the heavy discounting have on less busy areas of the country?

Michael says there could also be far-reaching consequences for retailers who do not change their customer focus and pay more attention to providing an element of retail theatre and old-fashioned outstanding customer service.

“The customer experience will have the biggest impact on whether shoppers return or not - regardless of how cheap the product is.”

Published on Tuesday 19 July by Editorial Assistant

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