How retailers can win customers in a more challenging climate

As we enter this critical quarter for retailers, they are faced with a series of new challenges dampening consumer confidence. The impact of inflation with consumers facing real term pay cuts, the impact of increased energy costs and now surging mortgage costs on the back of a disastrous mini-budget, which the effects are unlikely to be reversed as quickly as they were created. 

A headache-inducing cocktail of challenges in this critical time for boosting the bottom line. Yet retailers have shown remarkable resilience and adaptability over the past two years to continue to offer customer-centric strategies. They will need these qualities to continue to survive and thrive. 

So how to react? In a recent study we carried out in conjunction with YouGov, we wanted to look at the impact of this inflationary period on consumer behaviour. What are the drivers of purchasing in these challenging times and what is the impact on cross category purchasing? By understanding the motivations of different consumers at this time retailers can ensure they truly focus on their needs. Those that do will be rewarded.

Consumers cutting spending on essential items

The research highlighted that the cost of living crisis is being felt at the sharpest edge by those on the lowest incomes. Many are struggling to afford the basics as energy bills have rocketed, despite the support package now being provided.

For essential household items, more than 2 in 5 respondents revealed they had reduced their spending (43%). Of these, 1 in 3 (32%) have cut spending on essential household items by more than 15%. 3% have cut spending on essential items by more than 50%.

There are some significant variations, based on gender, location, age and financial situation. 48% of women have reduced spending on household items, vs 38% of men. Of those who have reduced their essential household spending, home owners (of any type) are the most affected, with 63% saying they had cut spending by up to 15%, compared to 51% of renters.

Londoners are least likely to cut spending significantly. Of those who have reduced their spend on household essentials, just 2% of Londoners are cutting spending by more than 50%. Meanwhile in the East of England this rises to 6%, and 7% in the North West.

This highlights the uneven nature of the situation and the need to not have a one size fits all strategy in communicating with audiences.

Spending plummets on big ticket items

For considered purchases, 52% of 18-24 year olds have cut back on spending, compared to 68% of 25-34 year olds and three quarters (75%) of 35-44 year olds. The categories hit hardest by a cut back in spending of consumers of these goods are: Consumer electronics and homeware and home furnishings with 61% of consumers of these goods reducing spending. Next was Clothing & apparel 60%, DIY and garden, 50% and Baby and child, 41%. As the cost of living increases and the ability to secure a new mortgage or afford the one you already have will impact further the decision factors around a considered purchase.

The factors driving purchases in today’s climate

Of those factors we know that are driving purchasing behaviour for more expensive items. In today’s environment the number one factor driving a considered purchase is that something is within budget, 69%, durability/ being fit for purpose was next, 52%. Third in the list was sustainability, still favoured by 23% of respondents. Brand awareness was considered by just 13% of respondents. For Gen Z (18-24 year olds), the result for sustainability was far higher at 38%.

Millions of consumers looking to switch brands

Another key takeout is that brand loyalty has plummeted in the current climate. 60% of people would switch brands for essential items and 48% of people revealed they are more likely to switch non-essential considered purchase brands.

This suggests the need for a tailored approach for brands to remain relevant in the current environment. Ephemeral qualities like brand values seem less important when people are rightly concerned about affording bills.

Quality and price consideration crucial

The focus in generating sales and retaining customer interest should be price and durability as the two key factors driving buying decisions. People still need big ticket items but necessity trumps desire in the current environment.

However, it is important for brands to have expertly crafted messages for different audiences.  with sustainability still crucial, in particular for younger audiences. Having the right tone and audience-centric approach will help brands and retailers remain relevant and necessary during the next few months.The results reveal the cost of living crisis has had a dramatic impact on consumer spending at all levels. It highlights that there is a real need to focus on value and  longevity to win customer loyalty with the need to craft audience-specific messages like never before. If retailers and brands keep this in mind, without the need to apply offers, they can still thrive amongst the turbulence and uncertainty. 

To read the full article by Dan Todaro, Managing Director please visit Retail Sector

Photo by Rachel Hannah Photo on Unsplash

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The New Normal

Following a two year hiatus, IFA is back and re-energising the tech world’s attention. From smartphones and smart homes to TV, audio and domestic appliances, the show was packed with the newest and exciting products from some of our favourite brands including LG, Samsung, Toshiba, Miele and countless more.

IFA is one of the globe’s largest technology events, with a confirmed 1,100 exhibitors and 161,000 visitors this year. The show attracted a strong media presence; more than 2,500 journalists came to Berlin and around half of them were representing international media organisations. So far, media monitoring has identified coverage of IFA 2022 by publications and broadcasters in over 100 countries around the world.

This makes IFA a vital industry showcase for trade and consumers to see leading brands present their latest products and innovation to not only the press but also to retail buyers as well as the general public. Plus it provides observers on a world stage, through social media and chat, a window to the latest technology trends, discovering where brands are developing their product portfolios. Furthermore, it’s a barometer for retailers to see what’s coming, helping them prepare for range planning and the knowledge share required to sell these new products effectively in the coming seasons.

Having not had a full event since 2019, during this period it seems that many brands have been taking influence from how we now live our post pandemic lives. Therefore, following lockdowns and the ghosts of COVID, they are recognizing that we value our homes more than ever as places to thrive and grow, not merely live. Consideration is also being given to our lifestyle choices and the generational importance in sustainability as a concern in the technology we use day to day to enhance our lifestyles. This is being recognised more I suspect, to generational demands and less because brands wanted to. Nonetheless, it’s a positive step forward and one the technology industry can lead in and set examples for others.

Therefore the overriding message, which every brand was shouting about loudly, was sustainability both in terms of materials and product usage. I noted that less was being said about the ethics of manufacturing and how products are made. Perhaps this is a step too far to address across all category lifecycles. But even so, sustainability and design had become significant buzz words at IFA 2022.

The sustainability message carried into some of the stand designs, with Panasonic and the hall they occupied being very low cost, with a focus on reduced waste. This meant no floor covering and attention was focussed on the products rather than their IFA setting. Also of note, was the fact that some brands didn’t bother attending this year. Sony being one such brand whose only presence was a meeting booth.

Changing Consumer Styles

As indicated, brands have also been busy in their understanding that our homes have become increasingly more important as a style statement that reflects our changing lifestyles. This meant a host of new style focussed products and technology being brought to market and proudly showcased to the world at IFA2022.

One such brand to do this rather spectacularly was LG who brought us the new MoodUp fridge which is not only filled with advanced refrigeration features but also has personalisation at its core. Owners are able to change the colour of their fridge depending on their mood and light up their kitchen to reflect the desired ambiance. Furthermore, it incorporates speakers to play music thus providing an additional sonic experience.  With the ThinQ LG app on your mobile devices, you will be able to adjust the lighting from 22 colours on the upper panels and 29 colours on the lower panels. For those that don’t need this choice of combinations there are also 4 preset colour schemes. These presets also have the benefit of enabling the app to stream music playlists that compliments the selected colourway as well as syncing the light effects with the music so that the colours change with the music.

Sticking with home appliances, it appears that it’s no longer unusual to desire a range of products that are fully interactive. Some offer interactive panels, where, for example, you can pull-up recipes to assist with your cooking, Facetime a friend or simply use your appliance as a digital photo frame to display your snaps in an endless loop. Samsung presented such a solution with a bespoke range on MDA’s, which not only look fantastic but are also super efficient in their energy consumption and water usage.

The competition is also ahead of the curve. Again, LG have their own unique technology as demonstrated on their Instaview capable fridges, while Panasonic had its combination ovens which seem old fashioned but have been revitalised with new features in its SDA range alongside its bread makers and juicers. A clever move, reflecting the trend towards making things in the home to assist in budgeting and sustainability, as well as reducing the need for packaging and transport. These categories are seeing growth and Panasonic is very much ahead of the curve leading the charge here for premium brands.

It certainly appears that some lockdown habits are persisting, together with health and the increased cost of living being a driver for certain categories. I would suspect that breadmaking and juicing will continue to gain popularity across all generations. In fact Panasonic announced that their mission across all well-being categories, inner, outer and spatial well-being, is to deliver on their vision of holistic well-being.

Commercial Appeal

Another trend evident from many brands including Samsung, LG, Panasonic and TCL was developments in heating and cooling products. Aircon may not be a particularly glamorous category but in adding air purification technology and applying a variety of unpronounceable, ethereal names such as NanoeX or Breaver, manufacturers are trying to garner attention in this category but i feel these unpronounceable names are merely branding for branding sake, maybe detracting for the core of the product and its health benefits.

From branding to innovation and as mentioned, there’s no doubt that sustainability is the name of the game at IFA alongside intelligent connectivity of devices and Smart Home solutions and there was certainly lots to impress. Sometimes, however, I’m left with the impression that innovation can also be created only for the sake of it with no real commercial or mass appeal but merely to grab headlines. The LG Styler ShoeCase has to be for me the most random exercise in innovation from an established global brand. This thing is in essence, a box in which to display and sanitise your footwear, removing the odour of stinky feet. These cases are transparent on three sides, with customisable lights and a 360-degree turntable which refreshes shoes in 40 minutes with LG’s TrueSteam technology to reduce odours, viruses and bacteria. This is all very clever but the ThinQ app lets you go that one step further, in that you can upload the details of your most precious kicks to share on social media and brag about.. Mindblown? Mine is.

Taking this concept one step further still, you could place this box of wonders on the LG Aero Furniture table. Made from recycled materials, the LG Furniture range crosses home furnishings with technology. What is basically a lamp with mood lighting, buyers of the Aero table can choose a base and top to match their decor.

This approach was a trend across the board from Samsung with its ‘Bespoke’ range of home appliances which again enabled personalization of your appliances to match your living space and tastes. Taking the technology Samsung is known for and turning it into a statement piece many would like in their home. This naturally extended into some more traditional technology you expect to see at IFA such as the new Laser, 4K Triple and NEO QLED 8k televisions.

Toshiba also had some interesting tricks up their sleeve such as the new Toshiba Tik Tok TV to appeal to the generational shift familiar with the platform, bringing it to the biggest screen in your home with quantum dot 5k, Dolby Atmos and Onkyo speakers.

I suppose what we are seeing here from brands like LG and Toshiba is a way to tap into all generations and remain relevant whether that be through traditional technology as we know it and the new world, where technology intersects art and design to enhance and in some cases, create lifestyles. All done within the remit of sustainability and convenience for an ever changing and evolving population that now lives differently to how we did only two years ago. The paradigm was well and truly turned on, metaphorically and in reality.

In essence, I suppose the absence of this behamouth hosted in Berlin, has made us all grow fonder towards IFA, reminding us of  its importance in the industry, garnering more than 1.6 million impressions on all social media. This makes IFA the ideal platform for brands to showcase, with pride, their innovation which retailers will be ranging in the coming months. With the economy as it is, and home ownership becoming increasingly more prohibitive due to interest rates, some may revert once again to improving the space they currently live in. That’s where you fit in. Make the most of the opportunity and give your customers honest advice and sustainable solutions from the best technology that matches their needs.

To read the full article by Dan Todaro, Managing Director please visit ERT Online

The re-considered purchase: Consumer behaviour in the inflation era

The cost of living crisis has had a dramatic impact on consumer spending with brands needing to focus on value and the longevity of their products to win customer loyalty. These were some of the key findings from a new research report by marketing agency Gekko.

The survey of 2,165 respondents carried out by YouGov in August commissioned by Gekko, revealed that two thirds, 66% have cut back spending on ‘personal non-essential considered purchases’. These are defined as non-essential purchases that have a degree of financial or emotional investment.

Meanwhile more than 4 in 10 (43%) of people have cut back on spending on ‘essential household items’ due to the increased cost of living.

The re-considered purchase

For personal non-essential considered purchases, 52% of 18-24 year olds have cut back on spending, compared to 68% of 25-34 year olds and three quarters (75%) of 35-44 year olds. The categories hit hardest by a cut back in spending of consumers of these goods are: Consumer electronics and homeware and home furnishings with 61% of consumers of these goods reducing spending. Clothing & apparel 60%, DIY and garden, 50%. Baby and child, 41%.

In today’s environment the number one factor making people consider a purchase in the consumer technology space is that something is within budget, 69%, durability/ being fit for purpose was next, 52%. Third in the list was sustainability, still favoured by 23% of respondents. Brand awareness was favoured by just 13% of respondents. For Gen Z (18-24 year olds), the result for sustainability was far higher at 38%, suggesting the need for a tailored approach for brands to remain relevant in the current environment.

Brits slash spending on essential items

For essential household items, more than 2 in 5 respondents revealed they had reduced their spending (43%). Of these, 1 in 3 (32%) have slashed spending on essential household items by more than 15%. 3% have cut spending on essential items by more than 50%. There are some significant variations, based on gender, location, age and financial situation. 48% of women have reduced spending on household items, vs 38% of men. Of those who have reduced their essential household spending, home owners (of any type) are the most affected, with 63% saying they had cut spending by up to 15%, compared to 51% of renters.

Londoners are least likely to cut spending significantly. Of those who have reduced their spend on household essentials, just 2% of Londoners are cutting spending by more than 50%. Meanwhile in the East of England this rises to 6%, and 7% in the North West.

Millions of Brits looking to switch brands

Brand loyalty has plummeted in the current climate. 60% of people would switch brands for essential items and 48% of people revealed they are more likely to switch non-essential considered purchase brands. Men are less likely to consider switching their considered purchase brand choices, 43% versus 52% of women.

Commenting on the findings Daniel Todaro, Managing Director of Gekko said: “The results highlight the dramatic but also the uneven impact of this cost of living crisis. There is certainly no generic strategy for brands wanting to remain relevant in the current economic climate. These huge variations in choice are clearly based on income level, age, gender and location. No longer is desire beating need when making choices.”

He continued: “While large numbers of people are being seen to be cutting spending on considered purchases, it is now implied that brands should focus on price and durability as the two key factors driving buying decisions. Ephemeral qualities like brand values seem less important in today’s climate. However it is important for brands to have expertly crafted messages for different audiences with sustainability still crucial, in particular for younger audiences. Having the right tone and audience-centric approach may assist brands in weathering the turbulent times predicted ahead.”

To read the full research click here

Businesses that have a passion for training and staff development will excel during challenging times – how can independent retailers make the most of the opportunities available?

With the average turnover of staff or attrition rate, at 63% in retail compared to the national average of 15% across all employers, isn’t it time that retailers take stock of this a little bit more? Considering how much it is estimated to cost retailers – a recent report cited that globally retailers lose $19 billion each year on new staff costs –  it’s a false economy not to treat your staff as a highly valuable asset. Instead, much of what is spent on recruitment could be channelled into refreshing stores and training staff to enable them to be effective in their roles and provide an exceptional customer journey for shoppers.

The focus should be on retention rather than recruitment and with over 32% of retail staff stating that they receive no formal training at all, it’s a critical part of the puzzle that creates the whole picture for your customer experience.

Brands know this and that’s why they invest millions each year to train third party retail partners. New starter or induction training isn’t where staff training should begin and end. An ongoing plan for individual staff members is essential, with regular reviews and new initiatives implemented. Also consider all the brands that come in and train your staff week in, week out and then compare that to the training you deliver to your staff. How does your internal training stack up in comparison and ask whether your own training benefits your employees and enables them to be the best that they can be and are motivated whilst doing it?

It’s recorded that one in three staff leave their jobs due to a lack of training that allows them to learn new skills and develop their skill set. This shouldn’t be the case, as shoppers expect to be engaged by sales staff who know how to handle the sale of a considered purchase. The sales associate has to understand the importance of the sales process and how to navigate this to meet the customer’s needs and enhance their experience. Without training, who’s to blame when the sale doesn’t get closed or the customer walks out and later orders online? Often I think it’s the retailer for failing to develop the associate’s skill set to identify the need, create a journey that responds to the need and close the sale through an enhanced customer experience which builds on your customer service proposition.

Now more than ever, enhancing the customer experience is critical to create theatre in order to take the consumer through the varied steps of the journey from demo to sale. To do this, the responsibility as the employer is to equip your staff to be the best they can be – and this all starts with training. A key element of success in store, especially for considered purchases,  is the engagement of shoppers with any retail sales advisor [RSA]. Therefore as the employer, are your RSA’s proactive, helpful, skilful, knowledgeable, and capable of providing a personalised experience? This is something the online experience can’t replicate and physical retailers should be capitalising upon and drawing people in-store with the promise of a worthwhile face to face engagement.

The difference is down to individuals, their training and management, all of which are critical when it comes to talking about a brand and its products. It is vital that RSA’s are informed and motivated to deliver an exemplary customer experience through being not only advocates of the brands ranged but also of the store itself.

So what can be implemented at very little expense, apart from time, in order to give staff the opportunity to grow with a view to be successful in their roles and motivated to remain as an employee of your store. Here are five suggestions that you can influence:

  1. Ask your suppliers for training support or choose to work with brands that offer recognised training e.g. those who’ve been shortlisted for an ERT training award. Look around your store and identify every brand or category that your staff can’t sell effectively. These are the brands you can lean on for training support.
  2. Seek out and invest in training specialists to support your business and develop your staff to be effective in their roles. But first, you need to understand what things are like from the shoppers’ point of view. What is their experience like when they come into your stores and engage with your sales people? Consider commissioning a mystery shopper survey to provide an independent assessment that can be benchmarked against other retailers and indeed your competitors. This will provide you with insight on what behaviours need to be changed and skills improved so that the training can be tailored accordingly.
  3. Membership of organisations such as BIRA (British Independent Retailers Association) can offer specialist retail training and bespoke learning – https://bira.co.uk/benefits/retail-training as can seeking out support from your buying groups or trade bodies such as CIH, Retra, Sirius or Cedia to name but a few.
  4. Check with your local authorities to see if they offer free specialist training and support to you as an independent retailer in the community. An example – https://www.midsussex.gov.uk/licensing-business/independent-retailers-support-programme-2021-2022/
  5. Build and develop a Sales Advisor training program for your store(s) that recognises personal development and rewards individuals for their efforts. This does not necessarily need to be monetary, it could be in the form of certificates and or treats.

To read the full article by Dan Todaro, Managing Director please visit ERT Online

5 Retail Trends Impacting Customer Behaviour

We live in extraordinary times. While conventional wisdom pointed to a significant economic recovery after the challenges of the pandemic, a different picture has emerged as we look to the Autumn. The cost of living crisis is impacting everyone and has dramatically impacted the willingness of consumers to engage in discretionary spending.

Recent events have proved that markets can shift in an instant, and reacting to these effectively can be the difference between keeping or losing customer loyalty. It means working harder than ever to understand the trends that are impacting behavior. But after the horrors of lockdown, retailers with the right smart strategies can emerge from this bumpy road back to a more normal trading environment.

It is key to utilise opportunities across store and ecommerce to ensure your offering is ahead of the game as we look forward to the golden quarter. So what are we seeing that is worth consideration? I think there are five key trends impacting behaviour in the second half of the year.

1. The Inflation Era Shows No Sign Of Abating

We are living in an era with the highest level of inflation since the 1970s. This has been driven by pent-up consumer demand after the pandemic and the Russian invasion of Ukraine. According to the most recent BRC-NielsenIQ Shop Price Index data, shop prices hit their highest point of inflation since 2008 as the balancing act between supply chain costs and a cost conscious consumer continues. For July, Shop price inflation soared by 4.4%, up from 3.1% in June,

Consumer concerns regarding the cost of living cannot go ignored by retailers and brands. Intelligent pricing strategies are a  key priority, as well as ensuring your customer journey is quality enough to capture a consumer willing to shop around.

2. Customers Being More Canny With Considered Purchases

In this inflationary world consumers are needing to think very hard about big ticket items. Particularly when looking ahead to further energy price rises in the Autumn. This is having a noticeable impact on existing sales. There was a 4% MoM decline in global smartphone shipments according to the latest Counterpoint research market review. This represents the second consecutive month of MoM decline, along with being the 11th consecutive result showing YoY sales decline.

Despite many ongoing success stories, the overall market has yet to reach pre-pandemic levels. While component shortages have been partially sorted; inflation, a slowdown in China, and the war in Ukraine have all affected recent demand.

With smartphone upgrades being a discretionary purchase it is incumbent that retailers focus on the value of any big ticket items. For appliance manufacturers emphasising the ability to help save energy and costs can be key. With running costs becoming of more interest, consumers will be looking at eco-credentials for new appliances, as well as potentially opting for better quality units that will stand the test of time.                                                     

3. Personalisation and Experience Key to Driving Return Visits

There is also an expectation of quality customer service and personalisation. Something that will please consumers and drive up the chances of a return visit, whether that is online or physical store. Research commissioned by Gekko last year found that the top factors driving sales were experience related. This includes the ‘ability to see and touch a product’, and expert, tailored advice.

Empowering the consumer through increased personalisation is vital, particularly as 80% say they would only shop with a business that embraces it. It is the ability to differentiate in today’s environment that will mark out success from failure.

People now have an elevated expectation of their shopping experience, looking for curated, one-to-one engagements at various stages of their journey. Such interactions breed brand loyalty and recognition, meaning you can count on people coming back for more if they enjoy their time with you. Recent research by MoEngage found that only 25% of retailers currently personalise their communications with their customers, so there is a real opportunity to get ahead of the curve.

4. Embracing Omnichannel and New Tech

2022 has seen a return to steady growth for ecommerce in conjunction with the full return of bricks and mortar footfall. With both channels set to grow sales this year after the end of lockdowns, it becomes more important than ever to ensure your omnichannel presence is informative and engaging.

The proportion of retail sales online was 26.6% in May 2022 and remains substantially higher than the 19.7% in February 2020 before the coronavirus pandemic. Research we commissioned last year also showed 80% of consumers would now research online before buying an item instore. It is crucial to ensure you have a seamless and joined up journey across your various touchpoints.

5. Sustainability and Ethics

This continues to be a top consideration for consumers when it comes to choosing both how they shop and who with.

According to Deloitte’s latest Sustainable Consumer research, environmental awareness amongst UK consumers has rocketed in the past year with 85% now making more sustainable lifestyle choices. The findings revealed a strong desire to adopt more circular practices, such as buying products in sustainable packaging.

Credentials need to be backed up and also authentic, an increasingly savvy market will disengage otherwise.

So the road ahead may be bumpy but with the right map retailers and brands can navigate through the difficulties. Understanding the consumers’ specific needs is key to ensure retailers can be back in the driving seat for the second half of the year.

To read the full article by Rupert Cook – Marketing Director Gekko Group, please visit Talk Retail

Photo by Gary Butterfield on Unsplash

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How physical stores can ensure they are refit for the future

The events of the past couple of years have accelerated the pace of change in the retail industry. Retailers have simultaneously had to react quickly to events out of their control, while also embracing the ongoing trends that were clear even before the pandemic hit.

The role of the physical store has been one of the biggest topics in the spotlight. The absence of stores during lockdowns created two slightly paradoxical trends. Firstly their importance was maintained and even strengthened in certain ways. 

With the growth of ecommerce during the lockdown era, some feared that the writing was on the wall for traditional bricks and mortar retail. These concerns, however, were short lived as shops re-opened their doors and visitors flocked back. 

Yet at the same time, the need for change in the industry was also apparent. Ecommerce was embraced by everyone, even the most hardened luddites, meaning physical retail needed to redefine its purpose. 

According to ONS figures, online share of retail has consistently fallen since its peak back in February 2021. Still far higher than the pre-pandemic level of 19.9%, but with the balance restored somewhat by the opening of the high street. So the demand remains strong yet evolution is required to keep up with the pace of this new retail world environment.

The return to prominence has been so strong that the idea of growing a bricks and mortar presence has become a priority for both existing and new entrants to the market. Many previously online only retailers are developing ambitious plans to expand their portfolios. Amazon itself is reportedly planning on rolling out 260 Amazon Fresh stores across the UK over the next few years in a challenge to the existing grocery hegemony and an effort to make a physical imprint in the market.

So with more stores on the agenda for many, and occupancy rates back on the up as footfall gradually rises once more, how do they need to adapt to succeed in this current retail landscape?

Play to their strengths

Consumers have grown more used to utilising both online and offline channels when shopping. Our own research found that 85% of people now research online before heading to a store to purchase. As a result, they are looking for a shopping journey combining the ease of online browsing, with the added ability of being able to try things for themselves and ask for real advice when needed.

Retailers need to ensure they have the most in demand products on display, with all the relevant information at hand, so customers can enjoy getting to know their potential product with ease. Better yet, have knowledgeable brand advisors on hand to answer any questions and demonstrate useful features.

This part of the store experience should be built upon by retailers and the brands they stock as part of wider omnichannel improvements. Invest in improving these elements for the customer in order to create a positive shopping journey, playing to the true strengths of the store. This includes ensuring they truly understand what makes your retail space both an efficient and enjoyable place to be. 

Incorporate your online channels

Store expansion does not mean you can forget about the online channel, in fact customers are now expecting their interactions between the two to be seamless.

Consumers should be able to look on your website or app and see product availability in the store they are heading to. Offering an immediate connection to the store keeps the customer on side and more likely to remain loyal in their hunt for an item.

Physical retail can also now play a huge role in online order fulfilment by being a base for deliveries and click and collect orders. Complement this with accessible pick up points so that online customers are satisfied with their entire omnichannel shop, while also helpfully adding to your footfall figures.

Embrace technology

We have already touched on how technology might help create a better shopping experience, but there remain many opportunities to embrace it in physical retail.

For example, utilise your app to connect users to their store experiences through better personalisation, stock locations, or further product information.

One brand who are great advocates of this approach is H&M, which has started to roll out tech-enhanced shopping experiences in its COS stores. With seamless payments, personalised recommendations, and even a smart mirror that allows customers to request further items without leaving the changing room.

Offering these convenient elements will help the customer feel empowered, valued, and much more likely to make a repeat visit, while also giving you insightful data. Be forthcoming with the information that matters to them, otherwise shoppers will disengage and look elsewhere for it.

Think differently

Stores have the ability to excite and energise in real life better than any other channel, which is why we are seeing collaborations, new events, and online retailers joining in the physical experience.

Online star Bloom and Wild has been opening up a series of pop-up shops around the UK, utilising a bricks and mortar presence to give customers a real view of the plants on offer, with experts on hand to guide and advise. In terms of real engagement, the value of physically promoting your brand in a busy retail area cannot be underestimated.

The idea of the store ‘as an experience’ has grown to such an extent that it expands beyond just individual stores and into entire areas. The new Battersea power station shopping district will be just one example of the new type of retail district. A hybrid of Apple offices, event spaces, shops and hospitality. The combination of which looks to be the key to a bright outlook on high streets and shopping centres. 

The physical store has an exciting future and the possibilities are near endless for those that embrace change. Creating a multidimensional space that compliments rising ecommerce, along with shining in its own right, will create a space customers will yearn to return to. 

To read the full article by Tom Hardwood, Data and Insight manager please visit Branding Magazine

Photo by Clay Banks on Unsplash

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Building Brand Loyalty in the Modern Age – A New Route to Success

The concept of building brand loyalty used to be relatively straightforward. Effective marketing and delivery of a positive customer experience would create a positive association for a brand. The lifetime value of that relationship could then be hugely profitable, with consumers unlikely to switch.

However, we now live in a world of choice and information overload. An increasingly digital landscape, dominated by tech giants who hold many of the cards. In this new world, run by algorithms and AI, traditional long-held attachments are being unwound. As we culturally shift in shopping habits, people are more likely to remember what they bought from Instagram or Amazon but not the actual name of the brand. Does this mean brand loyalty is dead or at the very least waning?

Brand communication – from top-down to influencer-led

In the old world, brand marketers would use above-the-line platforms to create a strong identity and desire for a product. The brand direction was determined in a very top-down fashion, often based on the instinct of the CMO. A ‘needs’ state was identified and answered and an advertising campaign was launched highlighting the brand’s unique qualities.

In today’s world, we have shifted to digital and younger generations will see campaigns on Tik Tok and Instagram where the product is being advocated by a brand ambassador or a paid-for ad placed on social. In this new era, the control of the brand’s identity has been repackaged, personalized, and filtered through the lens of influencers. Having never heard of the brand, the influencer’s recommendation can be enough to create a consumer of a brand.

In fact, large segments of audiences will have never even seen an advert on TV or in a newspaper because they don’t touch a newspaper or they don’t switch on a TV. Or the brand has not included it as part of its media planning. According to recent research by Nielson, only 10% of Gen Z rank watching TV as their most popular entertainment activity. In fact, across the 18-34 bracket, live TV viewership dropped by 23% year on year.

The changing nature of brand loyalty

So, this digitally dominant world has created an entirely different mindset when it comes to brand loyalty. For socially digital natives, brand loyalty is about what it offers to them in value. A brand like Paul Smith will have a huge amount of brand equity among Gen X or baby boomers for its quality, tailoring, or painstakingly built partnerships and marketing campaigns. However, this will mean nothing for younger generations living in the moment and wanting to know what a brand can deliver here and now.

For younger consumers, if it is a relevant brand, it will be popular for them. If it’s not, they are just not interested. Quality has given way to relevance or price consciousness. Indeed there has been a huge rise in interest among younger audiences in mobile phone brands that offer a lot of the same features as iPhones but for a fraction of the price, like Xiaomi built with an Android skin. The tease here is the freedom an Android device offers a user who doesn’t want to be part of or associated with ‘that crowd’.

For digital natives, there is a checklist of what is really important for them when they spend their money. In recent research, price promotion was rated as crucial for this audience, but ethics are also vital. How long is a product going to last and what are they going to use it for? Does it meet my needs and values?

The life cycle of brands

In this new age, the life cycle of brands is also shorter, almost sonic. Brands can spring up quickly to consciousness but equally, their success can be shorter-lived. This has been evidenced by the spate of high-street retail brands that have disappeared.

Glossier is a D2C brand that sprung up in relatively short order. They have quickly scaled up the ladder of investment based on perceived digital growth that would continue endlessly. The direct-to-consumer beauty brand has raised an astonishing $80 million in Series E funding and reversed the traditional model.

They have latterly embraced physical retail with a pop-up store in Covent Garden, London,  and the swift ascent to being a much-loved brand is highlighted by the queues of people outside. However, they recently had to lay off staff as the growth they have experienced has not been maintained. Could the bubble burst as quickly as it was created?

How do brands build loyalty today?

It is certainly difficult for brands to build loyalty in the modern world because they are having to think about a very different culturally younger generation and manage a more traditionally minded older audience.

To square up this circle, value and values are two unifying themes that can be focused on, although realized in different ways. As consumers, we are all more interested in the purpose of brands and this is a clear differentiator. Brands today, particularly consumer goods products, have to think not only about how they make a product but also how they produce it. According to a study by Cone/Porter Novelli, 77% of consumers say they have stronger emotional bonds to purpose-driven companies.

Also, what added value are brands able to offer beyond the immediate product or service? How are they innovating to remain relevant? An excellent example of this is the Google Pixel 6 device, which enables users to remove photobombers and unwanted objects so that they “disappear like magic” using a “magic eraser”. Also, Portraits on Pixel represent the nuances of different skin tones for all people beautifully and authentically, to take true, accurate portraits. It’s innovations like these that create an immediate way for brands to build loyalty in the modern era.

Canny partnerships unite different audiences

Additionally, partnerships can be a great way of uniting seemingly disparate groups around common themes. CK1 Palace was a great example of this. A new collaboration between Calvin Klein and Palace Skateboards was launched with a tongue-in-cheek film celebrating cities that came to define these two labels. For streetwear brand Palace, it was London and its lively skate scene, with grainy film textures creating some retro-cool. 

Also included are high-contrast, black-and-white style studio shots, synonymous with Calvin Klein. The combination of nostalgia and modern relevance was a canny move that other brands would do well to replicate. Calvin Klein has opened new stores and you will see members of Gen Z proudly walking around Carnaby Street in London with a Calvin Klein shopping bag. This shows an effective strategy by a heritage brand to remain relevant and build loyalty with different audiences.

Towards a new approach

Creating brand loyalty today is far more difficult in a digital, social media-dominated world of increasing fickleness. Heritage brands are in trouble with a younger generation who has no interest in timeless qualities built up over many years. But brands can succeed if they adopt a new playbook. This needs to focus on the values and value of their product and on leveraging partnerships to remain relevant.

According to author Maurice Franks, “Loyalty cannot be blueprinted. It cannot be produced on an assembly line. In fact, it cannot be manufactured at all, for its origin is the human heart.”

To read the full article by Daniel Todaro – Managing Director Gekko Group, please visit Branding Magazine

Photo by Keagan Henman on Unsplash

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How Can Retail Navigate The Cost Of Living Crisis?

There is no escaping the fact that we are in the midst of the biggest cost of living crisis in a generation, with rising inflation and energy prices putting the squeeze on household finances by around £1,000 this year alone.

Inflation is set to rise even further, February’s figure has already reached 6.2%, marking its highest point in thirty years. In Chancellor Rishi Sunak’s spring statement he announced measures to try and alleviate the situation for households, but the charge was they won’t be nearly enough to alleviate such a unique situation.

While demand for products remains high and footfall continues to increase towards pre-pandemic levels, inflation, energy bills, and rising taxes have already begun taking their toll on consumer confidence. As of this month the GfK Consumer Confidence Index is down to -31, its lowest point since late 2020. Tellingly, the most significant drops come from the outlooks for personal finances and the wider economic situation, alongside the major purchase index, indicating that consumers are already concerned about how much they have to spend.

This perfect storm of cost increases, ongoing supply chain issues and Brexit red-tape, is also continuing to impact retail. In such a position, it is inevitable that these costs are eventually passed onto the consumer through higher prices. Lush has become another high street business that has had to up their prices by an average of 8.5%, joining the likes of Tesco and many others who have recently declared similar moves. Such retailers have also warned that further increases cannot be ruled out given the uncertainty.

Therefore the situation we now face is a consumer that is tightening their wallets amid the largest income collapse since the 1970s. Combined with retailers that are under pressure to remain competitive among some of the most difficult trading conditions in recent years.

Customer loyalty is going to be hard to retain if customers are more willing to shop around to grab the best deals for products, so a number of approaches need to be considered in order to ensure you are the most attractive proposition amongst the competition.

How can retail navigate its way to success in these tricky times?

Smart Pricing

It is clear that pricing is going to be a key factor this year, both in terms of the purchasing consumer and the margin conscious business. Indeed, effective margin management has emerged as a key growth driver for 2022, and getting this right will provide a significant boost. With 34% of UK business still pricing on an ad-hoc manual basis, introducing real time, automated pricing models will be a real differentiator in these uncertain times.

While staying competitive on pricing is important, it is not always necessary to simply be the cheapest for a given product, and retailers should be careful to not get themselves into a black hole of low-margin continuous discounting. Kantar research has shown that as much as 34% of brands are in a vulnerable position where their brand equity index is not supported by their pricing models.

Customer Service

It is important to remember that it is not just price that determines value. Research conducted by OnePoll on behalf of Gekko Group found that 37% of Consumer Electronics (CE) consumers would be willing to spend more on those products if they receive quality service, emphasising the real importance of getting this right at all points.

In-store and online advisors can extol the virtues of relevant products and their benefits. While true of nearly all product categories, it is particularly relevant to consumer electronics and other considered purchases, where shoppers will likely have more questions or want to see a demonstration.

Continuing with electronics for example, the value of efficient and smart devices can be highlighted by knowledgeable staff who are able to answer any queries from interested customers. The long-term money saving virtues of a smart thermostat for example, are easily explained in person, allowing such a product to shine when it might otherwise fly under the radar of a price conscious shopper. Fixtures and displays should also be updated to provide real value when a representative is not feasible.

Reward Loyalty

With consumers more willing to shop around than ever, it is important to explore all avenues in trying to keep them most engaged with your offering. This has led to a mini-revolution when it comes to existing loyalty schemes, particularly those of the major supermarkets.

Google search trends for ‘loyalty cards’ and ‘best savings’ have increased thanks to the rise in the cost of living, and consumers are looking for new types of schemes to entice them. Around 96% of shoppers say that they would like schemes to do more, and this goes beyond the small freebies or spend for points style many of us are used to.

Shoppers now look for personalised pricing, community outreach, and even gaming elements as a way to keep them interested. Tesco’s Clubcard prices are now a huge feature of their in-store displays, creating the desire to be involved and not miss out on potential savings. Personalisation has been a big point for Sainsbury’s, who is able to leverage its data to hand out relevant offers to customers, making them feel personally valued.

In combination with effective pricing and good customer service, the reward element is yet another way that retailers can present value against their competitors in this market.

The winners in retail this year will be stipulated by a few factors. Discounters will naturally have a headstart in attracting customers in the immediate term, but as we have explored, value is not just defined by price alone. Shoppers are also looking for quality and efficiency, with a view to being price conscious and also more environmentally friendly. These factors need to be clearly communicated across channels and all elements of the customer journey should be audited to ensure that this is the case.

Find your strengths in the current climate and promote them through all means available, while staying true to your brand will resonate with the customer whichever end of the pricing spectrum you are on. Doing this, alongside ensuring your customer experience is efficient and enjoyable, will keep consumers loyal even in these testing times.

To read the full article by Tom Harwood – Data and Insight Manager Gekko Group, please visit Talk Retail

Photo by Karolina Grabowska

How to create the ‘Feel Good’ retail we all need right now

While the economy has fully opened up after the end of pandemic restrictions, we are faced with fresh challenges. Soaring inflation, ongoing supply chain disruption and the implications of a war in Europe loom large. Against this worrying backdrop many are looking for positive experiences to help us feel good and distract us from the news.

Indeed, the whole concept of well-being and self care is far more prevalent amongst consumers now given the torrid time we have all faced. It is no doubt with this in mind that Selfridge’s recently grabbed headlines by announcing it would offer customers a series of experiences including sex counselling and therapeutic sessions. 

Its ‘Super Self’ initiative is aimed at putting “inner well-being” at the heart of the shopping experience and intended to tempt shoppers back into its store. The immersive experience includes bookable confidence coaching and empowerment sessions, as well as inviting DJs to create “feel-good sounds”.

It’s a well thought through initiative, enabling Selfridges to set the agenda in creative retailing. Positioning itself at the forefront of a retail revival, this service is one of a number to get shoppers ‘back in the habit’ of visiting stores. 

After two years of restrictions, city centres have struggled with the upheaval of lockdowns, stay at home workers, minimal tourism and staffing issues. However the figures for January showed Gross domestic product (GDP) bouncing back in January 2022, increasing by 0.8%. The Wholesale and retail trade grew by 2.5% in January 2022 and was the main contributor to January’s growth in services.

Need to recognise changed behaviours

The lockdowns and restrictions have been long and painful, but a survey we recently commissioned on consumer shopping intentions indicated a strong appetite to return and shop in-store. Only 2% said they wouldn’t be returning to the High Street. But it would be naive to just act as though it was still 2020 in returning to the same plan. 

It is incumbent on retailers to recognise how consumers have changed their shopping behaviours. Successful retailers have always understood the motivators and triggers for different customer groups and then offered an appropriate, tailored approach. This needs to be recognised and acted upon. It is certainly something Selfridge’s have recognised. We are changed and therefore retail needs to change to remain relevant in this new and uncertain world.

Connect with shoppers on a more personal, emotional level

Physical retailers need to emphasise the instore user experience to provide that differentiating factor from the online realm. A good customer experience means your customers will spend more and is something that is a key brand differentiator. The positive approach embraced by Selfridges is an opportunity to connect with shoppers on a more personal, emotional level. 

Positivity provides a welcome break and will help with loyalty and sales. Positivity is an important part of the customer experience mix but it’s more than just that. It’s about appealing to the senses. A sensory buzz of a considered purchase and the need to reconnect with the consumer in this category/space that just can’t be provided online. 

In our survey the top factor in people making a considered purchase was the ability to see and touch a product, according to 58% of respondents. This tactile ability to interact with a product and try before they buy gives people a reason to head into town. 

Stimulate the senses

Retailers should be stimulating the senses and having the right experts instore. Product knowledge and brand advocacy amongst retail sales staff are crucial components to success in retail. It starts with effective product launches and is something that traditionally relies on. Face-to-face engagement and hands-on time with new products. People who truly understand the product, can answer questions and can close a sale. This is something the online world again can not replicate.

To complement the expert, think about presenting those products in an appealing way. You will want to focus on products that have increased in popularity during the pandemic – those supporting lives now more centred at home. Make them visually appealing with great displays and demos. Ensure you have clearly labelled product details, features and benefits and ensure any promotions are clearly highlighted, ie. what it integrates or works well with.

Brand ambassadors are game-changers

The positive engagement with a brand ambassador or retail sales advisor is the game-changer that increases conversion rate and average basket value, achieved either through a higher purchase price or connection sale and, perhaps, an advocate of both brand and retailer. In an environment where inflation is likely to start to bite, people will be more conscious of what they are spending money on and therefore raises the importance of the skill of an expert in helping to guide a sale. 

This is much harder to achieve online and never as gratifying for the end-user as a customer journey that enhanced the individual’s perception of the brand. 

On a bumpy road to recovery and with challenging ongoing news, we all want to feel good. Brands that recognise our changed needs and create the right experience led by the right expert can succeed. 

To read the full article by Rupert Cook – Marketing Director Gekko Group, please visit  Retail Sector

Photo by Tim Douglas

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How Brands Create an Emotional Connection with Their Customers

The role of the brand in peoples’ lives has changed dramatically over the past few years. Consumers have spent two years decluttering, throwing away, updating, and changing what they need. As they’ve assessed the results, people’s attitudes towards certain brands have also changed. Brands that invented themselves decades ago are not necessarily communicating successfully or coming across in the same way anymore because people have changed and moved on. 

Consumers now want a less transactional and more emotional relationship with brands. According to a recent survey by Motista, customers who have an emotional relationship with a brand have three times higher lifetime value and will likely recommend the company at a rate of 71%, instead of the average 45%. It is this personal approach to building relationships that brands should develop. Like with any personal relationship, it should be built on key psychological principles.

1. Good listening skills

One of the key elements in any two-way relationship is the ability to listen and understand someone’s concerns. We are in a global environment where inflation has become very real and persistent for people everywhere. Therefore, from a brand perspective, you are going to have to work a lot harder to persuade somebody to buy your product. 

As consumers, we have become more considerate in our choices of what we buy and where we want to spend our money. The first question consumers are now asking when considering any product is, do they really need that thing in their lives?

As a brand, are you confident you’re listening rather than just broadcasting your messages? How are you adapting your approach and enthralling your customer over the entire sales cycle? This approach is especially crucial in the considered purchase space. 

The answer is in addressing a customer’s underlying needs state and responding to what they’ve said. Not what you think they need. For example, it’s said that, on average, it takes 12 days for somebody to buy a washing machine. So that’s 12 days from first consideration to researching online to getting to the point of purchase. During that window, consumers have plenty of opportunities to change their mind, especially in crowded categories. Brands that don’t listen and fail to address the shopper’s needs during that journey will lose out.

2. Offering connection

In any friendship group, you will want to feel like you belong – to become part of a tribe. In many ways, a timeless virtue a brand can offer. But this has been given added importance in recent years. When a brand evokes a true sensation of inclusion, we feel a connection.

When we buy into a brand, they are offering us more than products and services, we are buying into a lifestyle. We become part of their tribe. This is a particularly strong trait for technology users. People define themselves by the gadgets and brands they favor – for example, whether they are an iOS user or an Android user. Apple achieved such success by the ability to move technology from the practical to an emotional, tactile, beautifully designed and built piece of hardware product that created the real ‘love’ of users.

In a time where we have perhaps felt more isolated the ability to bond with others over shared interests is crucial. This is something all generations have been yearning for and are looking to experience. 

3. Sharing the same values

We increasingly buy into brands because of their ethics or how they contribute back or give back to society. Also how they conduct themselves behind the scenes or the manner in which they go about developing their products. This is becoming more strong with Gen Z. According to a recent study by Attest, “more than 60% of Gen Z say they’re likely to stop buying from a brand that doesn’t meet their personal values – 42% say ‘likely’ and 20% say ‘very likely’.”

Brands should connect with the values of their audience to build a stronger bond, rather than just perhaps providing them with a product or service they need. People will want to buy into a product because they appreciate they are dealing with a responsible brand that gives something back.

4. Being financially empathetic

Ethics are, of course, important but let’s not be naive. A recent study we commissioned also showed ‘price promotion’ was one of the most important factors in making a considered purchase

Indeed, according to an article by Psychology Today, having compatible financial values is a key predictor of relationship success and is also one of the biggest reasons relationships break down. This also applies to brands. Brands should ensure they don’t lose their customer base because they have a tin ear to their customers’ financial concerns. 

For everyone contemplating buying into a brand, it needs to be at a price point that works for them. In other words, a reasonable price. No one wants to feel like they are being overcharged so that they suffer buyer’s remorse. It needs to be the right product at the right price that does what they need. 

5. Trustworthiness

People want to trust the brands they buy from. In order to be trustworthy, it is vital to be consistent. If brands are saying one thing on their social media feeds about supporting sustainability but then a quick Google search finds they are not following this through, there is likely to be a backlash and a push back. People have more ability to find a brand and hold it to account.  

I think we are moving away from people buying things because it is just a thing to buy. I do genuinely think that people buy products and into brands because there is a genuine need. And if there’s a choice in that category, they will make a considered choice. 

It is also not necessarily about being the most ethical brand on the planet, but about being consistent and honest. There is nothing worse than that disappointing out-of-box experience. When you open a box and you feel like you’ve bought a dud or it’s just not the thing that you had anticipated having due to a brand promise that isn’t then delivered upon.

6. Fun experience

As we look at the more worthy elements of building a sustainable relationship, let’s not forget about the fun. This is the reason so many retailers are moving into ‘feel good’ retail. It is why a brand like Selfridges is offering free therapy and sex counselling alongside DJs providing ‘feel good’ sounds. By creating a climate of enjoyment, people are likely to feel more positively about the brand.

The same applies to car brands Tesla and Genesis, which have created vast immersive experiences in Westfield. The huge cost of these activations is not going to convert that many people. We’re talking about a significant amount of square footage in a serious location within one of the UK’s busiest shopping malls. But it is 100% about the experience. 

In many ways, this isn’t a place you come to transact. This is a place where you come to be immersed in the wonders of Genesis. Whether it is the luxury, the technology, the innovation, and being immersed into the brand – it’s done very, very well. It engages all the senses and creates enjoyment. The fun factor and visual experience is something so many people have missed out on these past two years and brands that proactively bring that back to life can reap the benefits.

Creating an unbreakable emotional bond

In conclusion, brands need to think very hard about a new approach to creating a genuine emotional connection with consumers who have quite a changed perspective. This needs to be beyond solely transactional. Brands need to apply the same principles they would apply to fostering any relationship. This involves focusing on good listening skills, offering connection, showing they share the same values, being financially empathetic, trustworthy, and fun.

If they can get these elements right, they can create an unbreakable emotional bond. According to author Sue Johnson, “Love is a survival imperative we experience from the cradle to the grave. Loving connection is the only safety nature ever offers us.” Brands that want to survive these tumultuous times would do well to follow that advice.

To read the full article please visit Branding Magazine

Photo by Andrea Piacquadio

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