How customer behaviour is revolutionising retail
The retail sector is in a state of flux. While the squeeze on consumer spending is having a largely detrimental impact on the High Street, online retail sales are continuing to enjoy strong growth.
And while a number of well known retail brands have disappeared over the past couple of years, others are not only surviving but thriving as they adopt winning customer engagement strategies in an omnichannel environment
Against this backcloth the Customer Engagement Network’s Directors Forum on the retail sector, held on the day of the Spring Budget, looked at the key issues, challenges and trends in this fast moving and volatile industry sector.
When compared with actual expenditure since the economic crisis hit five years ago research show that it has cost the retail sector £23bn in terms of lost growth and that retail’s share of discretionary income, which today stands at 32%, will decline to 27% by 2022.
Delegates heard about the developing dynamic in relationships between retailers and their customers in an omnichannel customer environment, and how fundamental changes in consumer behaviour, driven by technology, are impacting on retailers as they strive for sustainable success.
The mood and agenda for the day was set by Morris Pentel, CEO, Customer Experience Foundation with his presentation ‘Omnichannel retailing the new reality’
Customers have better technology than retailers
In a thought-provoking presentation Morris demonstrated how customer behaviour is changing and how retailers have to prepare for the challenge. Shopping through the web, app and call centre as well as in store is now part of the customers’ expectation of a single, joined up experience. He said that for the first time in history customers are in possession of more advanced technology than retailers and this is driving the change
Morris highlighted how the arrival of augmented reality, location and cashless transaction services are set to weave all of these channels into a new experience.
He argued that the term ‘omnichannel’ is already in danger of being outdated and that within the next year ‘blended contact’ driven by customer trust
Next up was Karina Govindji, Client Service Manager, Gallup with her presentation ‘Engaging retail customers through your people’
Giving case study examples Karina demonstrated how organisations that successfully engage the employees in their stores can also achieve greater sales and profitability, as well as sustainable competitive advantage.
Karina discussed how through leadership retailers can create and sustain high levels of employee engagement and harness this powerful force to drive customer engagement and company performance.
Argos re-inventing itself
Karina was followed by the first case study of the day delivered by Perry Price, Head of Customer Operations, Argos with an inspiring presentation ‘Customers First, Colleagues Always’
Perry described the journey that Argos, one of the UK’s best known retailers, has taken in the creation of a customer lead culture, through the application of simple, yet powerful customer and colleague focused principles.
He explained how Argos discovered its reality with respect to being customer focused. Defining the key principles that enabled its approach to change, including the re-education of senior leadership team and utilising the power of the colleague, those that are closest to the customer.
He demonstrated how this initial work is now helping to influence the organisation’s customer vision for a digitally led future and at the same time reversing declining performance and profitability to produce excellent business results.
Next up came Prelini Udayan-Chiechi, Director, EMEA Marketing, Lithium with her presentation ‘Get Serious About Social: Own the Social Experience’
Stop dabbling in social – invest
Prelini detailed how Customer expectations have changed so must our businesses business. She highlighted shifting attitudes towards the social channel and how social has become a reach and resonance mechanism.
Prelini urged delegates so get involved in social to stop dabbling and to invest in owning the social experience channel for your business
Next up came a case study on Amazon delivered by Lisa Byfield-Green, Retail Analyst, Planet Retail who predicted that by 2017 Amazon will grow from its current position as 16th biggest retailer in the world to 2nd – behind only Walmart and catching that giant fast.
Lisa demonstrated Amazon’s e-commerce sales are growing rapidly, outpacing both bricks mortar and online competitors through its customer insight and understanding and consistency of service delivery.
She examined the changing retail landscape and major strategic initiatives that are driving Amazon’s success and look at ways in which competitors can learn from Amazon while at the same time differentiating themselves and maximising their own strengths including the fact that – for the moment at least – they have stores while Amazon do not!.
Next up came Conrad Simpson, Director, Interactive Intelligence who gave a series of case study examples including organisations as diverse as IKEA and notonthehighstreet.com of how Interactive Intelligence is working with the retail sector to improve customer engagement in an omnichannel retail environment
Following the networking lunch came a lively Panel debate: 'A retail sector in flux: what does the future hold' chaired by Steve Hurst, Forum Chairman, Editorial Director, Customer Engagement Network.
The hour long debate covered a lot of ground including how organisations should be interacting with customer through social media to how employee engagement is a key factor in engaging customers in the retail sector
Staples and Regus – marriage made in heaven
Next up came a joint presentation that could well be a portent for how the High Street retail sector evolves in the future from Spencer Slee, Director, Staples UKand Phil Kemp, Head of Third Place, Regus with a Staples case study ‘Transforming Retail – new revenue opportunities’
This presentation illustrated how there are new opportunities for retailers to offer a better customer service and new revenue strategies. Delegates heard how Staples, the second biggest online retailer in the world (Amazon are first) brought the business centre to the retail experience through its collaboration with Regus in four Staples stores and the benefits they gain from it. It is a collaboration that is likely to extend to more stores in the future.
Spencer and Phil also explained in detail what is the key judgement criteria for choosing the right partner; drawing on lessons learned from past experiences and highlighting the necessary systems and structure to develop and support a successful partnership. The Staples/Regus collaboration seems to be a marriage made in retail heaven.
Bringing delegates crashing back down to earth came Matthew Hopkinson, Director, Local Data Company with his presentation ‘More Clicks, Less Bricks’.
Focussing on nationwide research that shows one in seven retail outlets in the UK, more than 35,000, are empty Matthew looked at the major trends influencing retail and leisure locations in the UK. He posed the question on whether High Street have a future and answered his own question by saying that it does but that it will change and keep on changing.
The democratisation of retail
He contended that the rise and rise of online retailing has effectively led to the democratisation of retail with no hiding place and customers in control. He said that retailers can no longer ‘fight’ with customers and have to be relevant and trustworthy to survive and thrive – which is where some of the recent High Street failures fell down.
Final presentation came from Ben Stockman and founder of London’s grassroots social media festival SXSE with his presentation "The rise of the Social Business"
Ben used case study examples from brands including Coca Cola and AVG to demonstrate how changing the way we interact both with our peers and with the brands we use
Ben looked at how in an ever-changing landscape brands are cutting through media over-saturation and shortened attention spans to bring their products and services to the right audience.
Will you be a winner or loser?
It was a fitting end to an excellent day and as Directors Forum chairman Steve Hurst said in his summing up it is changes in customer behaviour, driven by technology that is revolutionising retail. There will be winners and losers. The winners will grasp those changes with both hands and give customer what they want when they want it and deliver consistency and trust through engaged employees and dynamic operations. The losers will be those who fail in that quest.