Retailers are still struggling to recover from some of their darkest days. The economic downturn led to consumers becoming purse-strapped and more responsible with their spending. Moreover, the evolution of the Internet and digital services has meant lower prices and increased convenience for customers. As a result, it has become essential for high-street retailers to provide an in-store experience that will keep the customers coming back. Not only do they have to retain customers, they also have to capitalise on every sale opportunity that presents itself. This can only be done if customer trends, habits and behaviours are better understood.
The state of the economy and the ultra-competitive environment has resulted in highly demanding and increasingly aware consumers. To counter these challenges, the culture of deal hunting has come about, with a rise of coupons and vouchers to incentivise consumers, and shoppers using multiple channels to make their buying decisions. Customers no longer want to be shackled to a single channel and are expressing their desire to use new forms of shopping, such as mobile phones or even tablets along with the more conventional methods. Omni-channel retailing has allowed customers to shop in a more convenient way, whilst allowing retailers to understand specific customer needs.In-store Interaction
With the news that Dixons retail has invested in a price comparison app, it feels as though transparency has been taken to a whole new level. The electronics brand will now offer its customers the ability to ask the question all shoppers want answering before making a purchase - “am I paying the right price for this product?”
Whilst this is a great move by Dixons to heighten their competitive edge, they should also consider how they will recognise customers as they enter the store. Research has shown that shoppers want to be acknowledged on an individual level, expect stores to have some level of interactivity and be able to engage with retailers on products more. In fact, over three quarters (74%) of shoppers want to be able to request different stock products from the retailer whilst in-store. Currently, Dixons isn’t doing this.
For example, Dixons high-street stores, Currys and PC World have an electronic vouchering system. When all the items in a basket are scanned, there is a check to see if an offer is available. So if you were to purchase a laptop and a bag without Anti-Virus software, the system would prompt you to print the receipt to receive a 20% discount. However, this is not personal data, as it only looks at that day’s shop, and therefore does not take into consideration customers’ buying history to offer relevant products they regularly purchase, such as specific gaming accessories for non-grocery stores and weekly food promotions for grocery stores.Turning customers into profit
If we consider the vast amounts of data that retailers (and their suppliers) have at their fingertips, it is not unreasonable to suggest that they could use that information to understand how to incentivise their customers to spend more, increase their frequency of visits and shop across various categories.
Focusing on individual customer needs is a must in a highly saturated and competitive marketplace and will continue to be into 2014. The emergence of retail analytics is allowing high-street retailers to customise stores, by doing so retailers are able to provide a bespoke service for customers – an important factor that helps high-street retailers stand out from the likes of Amazon and eBay.
Price comparison tools can be highly beneficial, however it is a basic function that pure-play retailers provide and therefore does not make high-street retailers stand out.
Tesco is a prime example of how a bespoke customer service programme can differentiate a high-street retailer. The Clubcard scheme contributed substantially towards sales and customer retention. The scheme allowed Tesco to tailor its products and services to individual customers, this meant that Tesco were able to capitalise on more sales opportunities. Tesco attributed its Clubcard success to the vast amount of analytical data collected, which helped it to better understand its customers buying behaviour on a far more granular level.What does this all mean?
In-store personalisation is the yellow brick road to loyalty. By developing their omni-shopper strategy into these other areas, retailers can nurture relationships with customers, which will help to differentiate them in this highly competitive market. It really is a case of the store becoming a battleground for customer loyalty. Retailers like Dixons must leverage the one thing that the pure-play retailers don’t have – face to face human interaction.
To conclude, retailers who fail to adapt to the Omni-Channel revolution will not be around for too long - recent cases such as Blockbuster and HMV should provide a clear warning. Retailers must discover how to integrate the various shopping channels, so that they are able to provide customers with a seamless shopping experience. Moreover, stores must be able to engage shoppers whilst they shop with apps and other interactive gadgets.
Customer engagement is key, but knowing your customers enough to tailor their shopping experience to their needs is the secret to success. Retailers who manage to cater to individual needs and truly engage customers will surely swim where others sink.