Tag Archives: Marketing

How Luxury Retailers Can Boost In-Store Sales This Spring

Despite ongoing inflation, the retail sector in the UK is showing improvement, with like-for-like sales rising 4.9% in March, according to BRC/KPMG. With this extended bank holiday season upon us, there is more of a spring in the step for retailers. A recent survey we commissioned of 2,000 consumers found that 13%, equating to 9 million adults, are definitely planning to hit the physical shops, presenting luxury retailers with a meaningful opportunity for sales uplift

To take advantage of this opportunity, retailers need to create a shopping experience that is truly focused on the customer. 60% of respondents in the survey cited a pleasant environment as an important factor in a great retail experience. Luxury retailers should, therefore, ensure that they offer a pleasant in-store experience, starting from the moment the shopper walks in. 

This can be done by creating an immersive journey towards the checkout with creative displays and merchandising. All of this should be backed by product availability, highlighted promotions, and all-around first-class customer service. Staff should be readily available on the shop floor, and queues at the till should be kept to a minimum.

To combat inflation, promotions are vital, with 59% of respondents in the survey agreeing. Luxury retailers should ensure that they are competitive with online channels and have promotions visible and clearly marked up to entice hard-pressed consumers to open their purses and wallets.

In our survey, 42% of respondents cited engaging with knowledgeable shop staff as a key reason for their visit. Luxury retailers should, therefore, ensure that staff is well-trained and ready to answer questions. A well-trained expert can be worth their weight in gold, particularly with considered purchases. This will leave a positive imprint encoded on the memory of customers.

One of the top reasons given for in-person shopping versus online is to try before you buy (47%). Luxury retailers can play to their strengths here by effectively merchandising their products and encouraging customers to engage in a tactile journey of discovery. It is crucial to have the right expert on hand to assist the process, with all the senses of the shopper engaged in a truly immersive physical experience that will lead them towards the checkout.

The modern retail experience is underpinned by sociability, combining a trip with meeting friends and dining. Retailers and brands need to complement this by providing an environment that is sociable and luxurious, offering dining experiences, and other events that are relevant to their luxury brand. 

By creating a luxury experience that extends beyond the purchase, retailers can build customer loyalty and enhance the overall shopping experience for the customer.

To read the full article by Dan Todaro, Managing Director please visit Luxury Advisor

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The Power of Online

Creating an effective online presence is hard and maintaining it is harder still, so why do it? Well, it’s the virtual window to your store and even if it’s a non-transactional site, it’s as important as your store experience.

So when considering your website, always ask what do you want the site to achieve. If you want to drive sales, the site needs to be set up to have your consumers coming to it. You could make the best site in the world but if you don’t attract the right people to it, no one will know it exists, nor will you sell anything. 

If you have the luxury of a big budget to launch a major ATL campaign to drive awareness of the site, then great but if this isn’t an option, then you’ll need to get inventive and use your resources wisely. Therefore it is best that you spend as much time on planning the site as defining your consumer base, driving the customers with each click-through to your site. And don’t forget to make it mobile compatible as according to Statista, 59% of all worldwide website traffic is now on mobile devices. According to Hubspot, the industry benchmark for average dwell time is considered somewhere between 2-4 minutes. It usually takes around this time to explore a website and get a feel for the design and your offering.

You will soon know if you have the right audience coming to the site as they will purchase if it’s an e-commerce site or engage if not, the objective is to not let them drop off, never to be seen again. Play to the key strengths of online, with 85% of consumers researching online before a purchase in store, make sure you use the space at your disposal to portray all key bits of information surrounding the products. 

Consumers will often be coming to your site for information on pricing product details and reviews, so ensuring all this information is readily available and accurate is key and furthermore, this helps with SEO, helping to push your site up the search rankings.

Everything from pricing, through to more detailed specifications should be easily found and digestible and failing to do so will lead to customer drop-off. People will more often than not be looking for this info with a view to also then go and touch, feel, demo a product with a view to purchase in-store.

If you already have a physical store, make sure the site is aligned with your in-store messaging and values. Too often retailers aren’t aware of how messaging, promotions, experience and brand compliance should transcend from store to site and vice versa. Recent Gekko research found that 69% of people surveyed said that a well-synced online and offline experience would help drive a considered purchase.

The customer journey more often than not starts with a visit to your website. Gekko’s research has shown that 85% of shoppers looking to make a significant purchase will do their research online before actually buying. This shopper journey should be developed, keeping the consumer’s attention, rather than leaving them unmotivated to click beyond the landing page or walk through your physical door. Therefore with dwell times on a landing page recorded as up to 4 minutes, the importance of the look, feel and ease to digest information and navigate their way through your site is therefore the key to a successful site. It’s understood that 88% of online shoppers are more likely to continue shopping on a retailer website that offers a personalised experience, increasing to 96% of Gen Z and 97% of Millennials based on research conducted by Elastic.

It may seem an obvious thing to point out for those of you with a physical retail presence but be conscious of using changing seasons, events and promotions as a worthwhile excuse to update your site. Keeping your site fresh and relevant will make sure you are attracting traffic to the site and driving potential customers to shop with you for special seasonal deals. Ensure that any promotion or event you are running in-store is reflected on your site and perhaps create a call to action. By doing this you can get to understand your customer better so that you can proactively market out to them at a later date. Utilise site analytics to assist you in understanding who your consumers are and how they are using your website. Insights on where users are coming from, which pages shoppers look at the most, plus the effectiveness of any marketing campaigns you have running will all help understand key impacts and help in your long-term strategies for the brand and products.

If you create a site that has independent reviews and rating, which is considered standard, then be prepared not only for the positive feedback but also the less than glowing reviews. The reality is that all retailers will get these from time to time. It’s how you deal with this feedback that matters. According to Review Trackers, 94% of online customers have avoided a business due to a negative review. Therefore for over 9 out of 10 customers, online reviews have become essential to their decision-making online. Whilst 94% may avoid you, it’s claimed by Podium that 93% of customers say they’ve made purchasing decisions based on an online review. What’s more, most customers say they won’t engage with a product or business if they see too many negative reviews or a star rating of less than 3.3. Be mindful of how you position your feedback and its features in Google searches of your site.

It is estimated that  21% of UK retail purchases are expected to take place online in 2023. It’s therefore no surprise that your e-commerce strategy is important. With more customers shopping online, your business can sell more and earn more as a result if you’re running an effective e-commerce site. However, whether your goal via your website is to boost direct sales or only engagement, it’s important to create a strategy that encourages consumers to your site and increases dwell time that elevates the customer experience and begins their journey.

Keeping the site uncluttered is critical as is the need to have relevant imagery that truly represents your business, royalty-free stock photography can work but it needs to be true to your brand. Involving your staff can make it personal too. It makes you real and relevant to the consumer with the added bonus that they recognise a few faces when they drop into your store, increasing your credentials as a retailer that values a personal approach to the customer journey. 

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

Photo by Negative Space

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Narrating the Customer Journey to your Door

One positive outcome that happened in our communities post-pandemic is that local communities have rallied around their small independent businesses, in particular retailers. Whilst multiples close unprofitable locations on the high street decreasing their retail doors, independents are swooping in to do what the big names have failed so spectacularly to do, namely talk to their immediate audience.

The vast majority of multiple retailers, including retail banking, are clueless to what the local community and their consumer actually needs and wants. They continue to cite financial woes as a reason to close more doors, abandoning towns and in the process, they fail to realise that being part of the community can actually create growth for them and increase brand advocacy.

Retail used to be amongst the most innovative of industries, where a progressive approach to understanding the consumer and creating experiences that made your store a destination. But this seems to have dissipated and all that’s left is a lot of whining retailers wondering why people no longer want to shop with them.

Offer boring and consumers will literally walk on by. A recent study by Shopify found that 35% of consumers prefer experiential shopping. Seasonality can create these experiences, boost marketing and sales efforts but most retailers fail to even engage at the most basic of levels.

At the other end of the spectrum is the pathetic attempts by local authorities to support their communities, understandably failed by this government which has overseen local authority budgets being squeezed almost to bankruptcy. The government offers idiotic solutions to regenerate local communities and fail to even protect local jobs let alone increase the local economy and create thriving, energetic towns.

It’s about time retailers, local authorities and the government sorted their acts out and focussed on delivering for people and not merely themselves. The result will be that all will suffer.

But what can a local independent retailer do with their local marketing to succeed where the behemoths have failed and do it better and uniquely in your own style to speak in a voice and tone that your local community understand and find appealing?

Footfall across UK retail destinations increased in January, despite the impact of the many rail and other strikes. The annual increase in footfall was largely unaffected, with the gap from the 2019 level even narrowing slightly. Retail footfall remains 14.2% below the 2019 level but showed progress from the 20.8% recorded in January 2022.

It’s said that 96% of small businesses say they use social media in their marketing strategy of which 41% depend on it solely to drive revenue. In reverse, 74% of consumers state that they rely on social media to guide purchasing decisions and 81% of shoppers research online before purchasing.

With so many researching before they shop, bearing this in mind, what’s more important to your business? It would seem that a recommendation in the form of reviews is essential as it’s claimed by Forbes that 90% or purchasing decisions are based on these positive reviews. Therefore those comments and likes really do matter when people search for products that potentially lead them to your landing page and  e-commerce site.

This is particularly important for any business and their marketing mix as more than 50% of consumers won’t use a business if it has less than a four-star rating and 88% of consumers trust online reviews as much as they trust personal recommendations (Birkett, 2020).

Interesting to know that over 50% of all “near me” searches will result in an offline store visit and 62% of consumers will disregard a business if they can’t find them online. More significantly 88% of potential customers look for online reviews before choosing local services and 24.4% of all clicks go to the first result of local business searches. So having a top Google search result is proven to have an average click-through rate of 31.7%. (Backlinko) and increases the need for your reviews to be exemplary if you’re to get those 81% that research online, through your doors.

That professional approach you take in-store to deliver a positive customer experience and so encourage purchasing, needs to translate equally through reviews and online presence. This should be evident to the consumer through your marketing either on socials or search, to ensure a seamless and frictionless customer journey. A journey that is likely to start online from search to your marketing, either on third party platforms or your own, that enhances your proposition to convert that search into a customer you engage with in person.

Use local marketing to talk about what makes you different, your approach, offers and more. Make sure your staff know what you are marketing to ensure a joined up approach, from what the customer sees and reads and how that translates into the experience they receive on your shop floor. Train your staff to mirror your local marketing in their approach with customers and set targets with staff to identify those who were attracted into the store through your advertising. Use this intelligence to understand what is and isn’t working effectively to fine-tune and ensure your tone resonates with your customers.

So when considering your local marketing approach it’s imperative that you understand the importance of SEO for local businesses and how utilising it effectively and professionally, can result in new customers through the door.  Once there, the seamless journey kicks-in where you’ve curated the narrative and the shopper will receive the service reviewed or promised and hopefully become repeat customers and spread the word online and in person on your behalf.

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

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Spring in the Step for Retail – Gekko Research

As the UK heads towards the spring and an enhanced bank holiday season, millions of consumers have revealed they are planning to go shopping on the forthcoming Bank Holiday weekends. These shoppers are more likely than ever to do this with friends and combine shopping with other leisure pursuits.

​These are some of the findings of a new research report commissioned by creative customer experience marketing agency Gekko and carried out by YouGov. The survey of 2,000 consumers reveals that 13% (9 million)* are definitely planning to hit the physical shops and this rises to 18% of 18-34-year-olds, presenting retailers with a meaningful opportunity for sales uplift.

Indeed shopping is the fourth most popular (12%) Bank Holiday activity behind going for a walk, (45%) visiting family and friends (41%) and going out for a meal (25%).​ 19% of respondents also revealed they are likely to spend more on a Bank Holiday weekend than an ordinary weekend, equating to 13 million people. The most popular sectors for retail visits are home improvement (DIY, garden centre) at 22%, fashion (21%), homeware/ home furnishings (16%) and department stores, 14%.

The sociable modern retail experience

The survey also revealed more about the modern retail experience and what Brits are expecting from their visits to High Streets and Malls. Interestingly, retail is increasingly a sociable experience, especially for younger shoppers. 

45% of people combine shopping with a meal out, (rising to 53% of 35 – 44-year-olds) and 30% with meeting a friend for a coffee/ drinks (rising to 40% of 25-34-year-olds).​ Meanwhile, 55% of us prefer shopping for the home with family and friends versus 39% who do it solo.​ 

60% cite a pleasant retail environment as an important factor in a great retail experience with a marked split between women and men (67% v 53%).59% want to see promotions, while 42% want to be able to engage with knowledgeable shop staff. 

The top reason, when able to select all applicable, for in-person shopping versus online is to try before you buy (47%). The opportunity for physical retailers to play to their strengths here is huge, with this 47% equating to £233bn* in spending based on 2022’s retail sales. 

Retailers urged to transform their thinking

On the back of the findings Daniel Todaro, MD of Gekko is urging retailers to transform their thinking about retail and how to encourage customers instore.

“Our research clearly indicates that we are seeing a real trend toward retail as leisure. After two years of lockdowns, largely working from home and soulless deliveries, shoppers appreciate the benefits of a good physical retail experience. This is underpinned by sociability, combining a trip with meeting friends and dining. Retailers and brands need to complement this by providing an enticing and human-centred experience.”

He continued: “Too often we are seeing a rather nonchalant approach and attention given to customers which equates to potential lost opportunities. Retailers must think creatively about how to enhance the customer experience. A great environment, attentive and knowledgeable staff is more important than just focusing on promotions. With a potential audience of millions on the forthcoming Bank Holiday weekends, retailers can champion the timeless values of a good retail experience to enhance the customer journey.”

To read more about our research, click here

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What did CES 2023 offer up in the current cost of living era?

CES is the annual (notwithstanding Covid) tech industry gathering in Las Vegas that showcases the latest technology and products in the consumer electronics industry. Did the 2023 show present any hope for consumers struggling with cost of living pressures?

Recent Gekko research revealed that the cost of living crisis has had a dramatic impact on consumer spending with 66% slash spending on non-essential considered purchases and 43% on essential items. On a day-to-day basis, the main priority for many is ensuring that the bills can be paid and as a result, a large proportion of homeowners are looking for ways to save money, whether that’s cutting back on the heating or even switching appliances to save on electricity.

So, against this backdrop, we watched with interest for the big reveals and announcements that were coming out of CES in the first week of January to see what might appeal to cost-conscious consumers thinking of investing in money-saving and more efficient solutions for the home.

It’s no surprise that a tech giant like Samsung managed to grab headlines at CES and the updates to their smart home solution certainly presents some tangible savings for homeowners. Samsung’s SmartThings Energy and in particular their new AI Energy Mode which offers support for more devices and regions with even more significant savings. This new update includes 15% more energy consumption savings for compatible refrigerators, up to 20% for compatible air conditions and up to 35% for compatible washers on selected cycles. This update will allow the user to save electricity on these products which equates to savings on the user’s energy bill. The SmartThings Energy service which can be viewed on the SmartThings app available on both Android and iOS can show the energy consumption of the user’s SmartThings products and how much the estimated cost is. You can view this by day, week or month and it will even break down the energy consumption per hour. This app is very handy to keep track of the “Demon Appliances”.

If multitasking is your thing then a desk, bike, and computer combo might just appeal, with the added benefit of saving yourself a bit more money on your electricity bill. The eKinekt BD 3 from computing brand Acer addresses this somewhat niche requirement. They have branched out into the world of fitness with their eKinekt BD 3 exercise bike which is designed to be a desk, where the user can work and exercise at the same time whilst also producing electricity that can power the user’s laptop. Acer stated that cycling at a somewhat leisurely pace of 60 RPM (revolutions per minute) for an hour can generate up to 75 watts of power.

Moving out into the garden, a new solution to tackle water wastage was announced. The Moen Smart Sprinkler Controller can monitor the moisture levels of your soil and tracks local weather conditions. The user can also monitor water usage and estimated savings as well as set up customised watering schedules that take advantage of weather tracking so the sprinkler will not activate if the rain is predicted in the area which in turn will save the user money. Thinking about the UK 2022 summer drought, this kind of solution would certainly help users become more efficient in their use of water, cutting consumption, wastage and cost.

Although not announced at CES, something that has been gathering a lot of momentum recently and will be featured on the spec sheets of many new products revealed at CES is Matter, a new proprietary standard for home automation that has the potential to offer indirect savings for consumers. Matter is essentially Smart Home 2.0. In simple terms Matter is a new wireless standard that should unify the smart home and make operation easier for users. This means that every smart device you may have such as a smart plug or smart light will talk to each other as opposed to how it used to work with each device being locked to that specific manufacturer and then locked to a specific control centre such as Google Home or Apple Homekit. Until now, with non-compatible standards, consumers have essentially been locked into a brand/product’s ecosystem if they want full functionality. However, now the user will be free to mix and match and not worry about losing the functionality of their products because they’re mixing manufacturers, this, in turn, will save the consumer money as they can take advantage of sales rather than having to wait for that one specific product to drop in price as there are always alternatives for every smart home product.

This is by no means a conclusive list of products that can help consumers save on their household utility bills but rather some of the notable ones that we saw coming out of CES2023. There are of course other products either already available or coming onto the market that can assist with saving on energy consumption. From smart plugs that can be turned on and off remotely so helping users cut down on energy consumption to readily available smart light bulbs, which being LED, offer immediate tangible savings over traditional light bulbs.

CES 2023 was a step in the right direction for sustainability and pro-consumerism, with a lot of companies focussing on the overall sustainability of their products and ensuring that energy consumption is kept to a minimum as in these current times saving money on the electricity bill is a must. This all ties in with the increased industry focus on home appliances and energy saving. In the UK trade body AMDEA is educating the home appliance retail sector on how consumers can make savings when using products as part of its highly successful Know Watt’s What campaign in helping combat energy price rises.

In terms of pro-consumerism, one of the most important updates to come from CES 2023 as mentioned earlier is Matter which opens up the opportunity for consumers not to be tied down to specific manufacturers and allows full Smart Home Freedom. Expect smart home brands to be increasingly vocal about their Matter integration and compatibility.

You can read more by Callum Puffett, Marketing Executive by visiting Gekko News
Photo by CES

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How brands can stay front of mind in an era of continuous disruption

Daniel Todaro, managing director at creative customer experience marketing agency Gekko, advises readers on what is driving consumers during these difficult times and how brands might best react.

We are living in an era of significant disruption, requiring an updated approach to brand communication in sync with our times. The question is do brands need to redefine their raison d’etre to stay relevant to appeal to very changed consumers?

A new paradigm

The pandemic’s cultural legacy has been a shift to a life where many of us are at home more and need products and services that cater to a new stay at home existence. Meanwhile, the aftershocks of the pandemic have caused huge inflationary pressures impacting many. This has created a new economic reality where affordability trumps desirability.

In a recent research study we carried out with YouGov we interviewed a cross section of consumers throughout the country to understand what is now driving purchasing behaviour. We uncovered five key motivating factors driving purchasing behaviour at this time. Brands need to respond to these if they want to remain front of mind for modern consumers.

1) Value for money
In a world of soaring costs and stagnant wages, consumers revealed that one of their key reasons for making a considered purchase was the value for money a product offered. Brands should react by smartly promoting the long-term savings they can offer.

For example, AMDEA, the body representing the white goods industry in the UK, did some research in relation to the Eco buttons on washing machines and dishwashers. They revealed it was saving consumers on average £90 a year. They now really highlight this facet to drive consumers in store to purchase their members’ products.

2) Essential trumps desirable
Positioning your brand and products as ‘essential’ items in the psyche of your target audience is a second key factor, also borne out by our research. The days of assuming there is an implied need for your brand are no longer present.

Disposable income in all households, even middle earners, is becoming scarcer. The ONS has estimated the biggest fall in living standards in 2022/23 since records began. Consumers may want your product, but unless it’s absolutely essential and integral to their life, they are not going to buy it. So why is this going to be a product they can’t live without?

3) Durability
As an extension to being essential, people will need to feel that the item that they are buying is built to last for more than the lifespan of your average reality star. Low down on our list of drivers in today’s climate are more ephemeral qualities like perceived ‘brand value’.

Rather than offering a lifestyle associated with a brand, a brand should focus on the quality of their products. This should be the starting place for a conversation about a brand and how it will last for someone whose budget is going to be squeezed for some time.

4) Sustainability
The longer something lasts, of course the more sustainable it is, and this is a huge driver for younger generations in particular. Far from moving away from this priority at a cash strapped time, consumers are in fact doubling down. Brands should be wary of greenwashing and understanding this generation will do their research about the full life cycle of a product.

5) Innovation
Finally, innovation was identified as the fifth key driver of consumer purchasing behaviour in the current climate. This is why Google has attracted new customers with both the value of their Pixel phone but also its innovative Magic Eraser functionality.

Indeed, innovation plus value has also been a key driver of the demand for air fryers. According to research by price comparison website PriceRunner, demand has soared by 3,000 per cent since 2021. The money that can be saved through cooking at a time of rising energy costs is significant and of course energy efficient.

The air fryer also answers several other current consumer need states. We, post-Covid, are eating at home more and it is a way of getting your family, your friends and your kids involved. It is also healthier.

It is crucial that brands adapt to remain relevant. For some this will require a radical step change. As author Mandy Hale put it: “Change is painful, but nothing is as painful as staying stuck somewhere you don’t belong.”

To read the full article please visit Transform Magazine
Photo by freestocks on Unsplash

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Adapting For The Peak Season & Beyond

The Festive period is here and every retailer is gearing up for a rather different Christmas than we may have considered normal, the Christmas cookie-cutter approach is no longer relevant and adapting to your local audience is critical to success. We are living in a time of significant disruption and reimagined stability, requiring an updated approach to brand communication in sync with our times, a more cost and sustainable time. Established brand value propositions built up over many years are increasingly becoming irrelevant in a world reeling from a pandemic, a nonsensical war in Europe, embedded inflation and a recent economic crisis. The retail environment we all knew as recently as 2019 is becoming more like a faded memory of a bygone era.

The question is do brands and retailers need to redefine their appeal to stay relevant to a shifting consumer appetite based primarily on economic and environmentally, socially relevant trends? Particularly when facing a predicted period of prolonged economic downturn throughout the world, making the most of this festive trading period is essential in order to capitalise on the nation’s consumers’ appetite to shop either for themselves or as gifting.

A New Paradigm

Due to the change in how we lived that we experienced recently, the legacy lives on and our needs have been radically redefined. The pandemic’s cultural legacy has been a shift to a life where many of us are at home more and need products and services that cater to a new stay-at-home existence.

Meanwhile, the aftershocks of the pandemic and political instability and market fluctuations have caused enormous inflationary pressures impacting many. This has created a new economic reality where affordability trumps desirability in the purchasing behaviour of millions. Including those who perhaps considered themselves more ‘well off’.

The climate crisis is also front of mind and certainly hasn’t dissipated despite the more immediate worries. Events like COP 27 educate us to do more by increasing awareness and encouraging changes in living habits.

For every retailer, a new brand playbook is needed for this new age. Our understanding of consumer behaviours is understood better through research. A recent study we conducted with YouGov pointed to five key motivating factors driving consumers’ intent to purchase. These may assist to ring in the cheer for your store during this ‘peak’ period.

1) Affordability

In a survey of 2,000 consumers, we asked people what were the key drivers that would persuade them to make a considered purchase? The number one reason, perhaps unsurprisingly, was that it was within their budget. I recently spoke at the ERT Turning Point conference alongside AMDEA, the body that represents the white goods industry in the UK who did some research in relation to the Eco buttons on washing machines and dishwashers etc.

They revealed it was saving consumers on average £90 a year. They now really highlight this facet to drive consumers in-store to purchase their members’ products. Knowing that affordability is a critical criteria for consumers, brands can smartly promote the long-term savings they can offer. Perhaps paying back the cost of the appliance within five years. When you multiply these savings across several appliances in the home, you can see how the savings increase.

Furthermore, the energy-saving ‘eco’ modes can provide a win/ win of appealing to sustainability-minded consumers, particularly Gen Z, who also want to save money and the planet, as we all should be focussed on. Retailers can also benefit by highlighting appliances with these features as part of their promotional marketing as more and more consumers are having to rely on eco settings to reduce energy bills.

2) Essential Trumps Desirable

For 73% of consumers in our survey, the idea that a product was ‘essential’ was a key reason they would consider a considered purchase. Therefore positioning your products ranged as ‘essential’ items in the psyche of your target audience is important as part of the marketing mix.

Perhaps the days of assuming there is an implied need for the categories are no longer relevant due to changing consumer lifestyle and habits. Disposable income in all households, even middle earners, is becoming more scarce. They may want a product. That desire may be there. They may covet it. They may feel that they need it, but unless it’s absolutely essential and integral to their life, they are not going to buy it. At least not just yet maybe, unless you can convince them otherwise. Think about how you do this.

The lesson is therefore highlighting why your ranges are ‘essential’ to their needs. It is not so much that it may be that there’s an offer but more, how do they add genuine value to their lives? Why is it potentially going to be a product they can’t live without? Tapping into the primal needs of the user in these turbulent times is a way a retailer can craft their story and resonate honestly with their target audience.

3) Durability

As an extension to being essential, people will need to feel that the item that they are buying from your store is built to last for more than the lifespan of your average reality star.

Rather than offering a lifestyle associated with a brand, as retailers, you can focus on the quality of the products you are selling them. This should be the starting place for a conversation about a brand and how it will last for someone whose budget is going to be squeezed for some time. The hardiness of your product, particularly for those more expensive items you may range, is crucial. No one likes being mis-sold an item but people are far less willing to tolerate buyer’s remorse in a recession. Dob this at your peril, as it’s likely that you’ll never see that customer again

Consumers are also now genuinely asking, why do I have to pay more for quality? Surely, even if I’m buying at the entry-level of the range, it should still be a quality product. The craftsmanship of its build and robustness need to be communicated to the customer clearly and honestly by your staff to all without bias. 

Indeed we are now in a new reality where brands have to accept quality and durability is delivered at a more affordable price point. Certainly, if they want to maintain market share. Losing market share in a downturn can be very difficult to recover from when times return to being good. Long-term thinking needs to trump short-termism. This changes the way in which you sell to your customers of all demographics.

4) Sustainability

The longer something lasts, of course, the more sustainable it is. Sustainability is a huge driver for younger generations. In our research sustainability came through as a top driver of behaviour for 23% across all age groups and rising significantly to 38% for Gen Z. 

Far from moving away from this priority at a cash-strapped time, consumers are in fact doubling down. Indeed new research from SAP reveals that despite the cost of living, over half (52%) of UK consumers aged 18-34 are actively looking to shop more from retailers with strong sustainability credentials this Christmas.

They want to understand that a product is not destroying the planet. This is not greenwashing but also understanding this generation will do their research about the full life cycle of a product. The good news is the extent to which communication forms part of the sales process enables these factors to be included in the discussion. If something can save money by assisting less energy use or being more durable, it is therefore more sustainable and solves many current consumer concerns.

5) Innovation

Finally, innovation is the other key driver of consumer purchasing behaviour in the current climate. Indeed innovation plus value has also been a winning facet of the trend for air fryers. Indeed according to research by price comparison website PriceRunner, demand has soared by 3,000 per cent since 2021. This an opportunity to be understood and embraced to appeal to your consumers this gifting season.

However, critically the air fryer answers several other current consumer needs states. We, post-covid are eating at home more and it is a way of getting your family and your friends and getting your kids involved. It is also healthier. This addresses the growing trend for healthier versions of popular meals.

Most crucial to the surging trend though is the value proposition. The money that can be saved through cooking at a time of rising energy costs is significant and of course energy efficient. This is why we can be sure that this may be one of the most popular Christmas gifts this year as already on Black Friday it became a sell-out line in numerous brick-and-mortar stores and online with Curry’s stating they sold more than 18,000 during the week of Black Friday.

In summary, retailers do need to recognise changed behaviour and a new paradigm on the back of a series of interconnected trends and crises. These centre on changed lifestyles that are more based in the home, a growing movement for sustainability and most crucially the need to save money.

Consumers simply won’t invest in the way they did before, meaning retailers need a laser-like focus on their customers’ new needs. The narrative a retailer needs to highlight is value for money, why it’s essential, the product’s durability, sustainability and its innovation.

To remain relevant as we face an economically challenging climate is tough.  For some, this will require a radical step change. For others, it’s underway and the new normal.

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

Photo by Carl Raw on Unsplash

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Adapt And Thrive: How Retailers Can Succeed in 2023

The cost of living crisis era has shaped much of this year and looks set to be a trending topic well into next year. While we would all like to see the worst of it behind us, the latest OBR forecasts show that economic recovery is still some time away, with their data predicting a 7% decrease in household incomes in the coming two years. Read on to see how retailers can succeed in 2023.

A recent survey conducted of 2,165 respondents by the Gekko group and carried out by YouGov highlighted just how much spend has already been restricted in certain categories. It identified that 66% of those surveyed said that they are cutting down on non-essential items. 43% were decreasing spend on their essential household goods.

While these headlines confirm the severity of the situation the country finds itself in, within the retail sector the way consumer behaviour has changed as a result still presents opportunities for brands and retailers to succeed.

Gen Z Least Likely to Cut Spending

Interestingly 52% of 18-24-year-olds in our survey said they were decreasing their spend on non-essential purchases, the lowest of all age groups. Gen Z are brand focused and remain loyal to those that match their values in ethics and sustainability. Employed and with new money in the bank, this tech-enabled generation is just as willing to engage with brands both in-store and online.

At the other end of the spectrum, as we get to the older categories, there are further cutbacks with 75% of 35-44 saying that had reduced non-essential purchases. Of course, these older generations are likely to have more disposable income with which to keep up their levels of spend. Often being homeowners, these customers are the most likely to be purchasing big ticket electronics items like appliances, and therefore are particularly discerning about the quality and durability of these products.

Regardless of your target group, it is important to remember that there are valuable inroads to sales across the generations. A customised approach is required to provide a meaningful connection, translating through the customer journey to purchases.

Recession-Proof Premium Market

Much focus has been on consumers trading down for their purchases, but data also shows that the premium market has also been relatively recession-proof for a number of reasons. Premium customers are more likely to have kept purchasing regardless, being less affected by cost of living growth. Meanwhile other groups are also likely to invest in high quality devices as they are built to last, crucial with the cost of living squeeze likely to last.

According to Counterpoint Research, there was a 95% YoY growth in smartphone sales over $1000 in Q2, highlighting the ongoing demand for the very best devices. With their ranges coming into focus across all demographics, Premium bands can capitalise on this interest by offering accessible routes to their products through pricing plans and brand marketing.

Trading up and down for items is one way that consumers are switching products or brands, but there are others to look out for. We found that 48% of respondents were willing to switch for non-essential purchases as a result of the impact of the cost of living crisis. Within the electronics sector, budget (69%) and durability (52%) were key motivators to switch, with sustainability (23%) the third most important driving factor. The sustainability topic is not one that is going to fade away and is a particularly important one for younger Gen Z customers, who will connect better with brands that show ethical credentials.

So how can retailers and brands continue to succeed in this turbulent period? The ongoing lessons learned from the events of the past two years remain relevant.

1. Remain Adaptable

Showing adaptability when it comes to your consumers’ needs is imperative. Be prepared to pivot your messaging based on their needs now will pay dividends. This will stand you in good stead to succeed when the economy and consumer confidence begins heading in the right direction.

2. Continue to Invest In Your Brand

Building loyalty now will pay off in the long run, and investment in your brand during challenging times will pay off later with others disappearing from view. Discerning customers are looking for the best products at the best deal, therefore brands need to reinforce just why they should choose them.

3. Demonstrate Your Brand Values

Shouting about the values of your brand is also vital. We have seen evidence that consumers across demographics will stay loyal to those that they feel an affinity with, so to do that they need to know who you are and what you stand for. This can be through marketing activities in-store, online or across all channels simultaneously.

A recent LinkedIn survey highlighted that 78% of respondents agreed brands that maintain or increase their marketing spend during economic troubles are the best placed to recover faster afterwards.

4. Show Empathy With Your Audience

Demonstrating empathy in your go to market strategy during this cost of living crisis will ensure you remain relevant with all consumers when competition for attention is at its fiercest.

A positive omni-channel customer journey will lead to better engagement and enjoyment for the consumer. After all, a bit of joy goes a long way in these challenging times.

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

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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

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