RSA RETAIL RESEARCH PAPER2 WEB HR.pdf

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DOES THIS <strong>RETAIL</strong>ER SUPPORT SOMETHING I CARE ABOUT? It is becoming increasingly important to identify Retailers that stand out in a busy market environment. Some customers will differentiate and make their choices based on the Retailer’s ethics and approach to doing business. There are some key areas where consumers would like to feel that they too are contributing to the right cause in spending their money: IKEA Named as One of the ‘World’s Most Ethical Companies’ for Fourth Consecutive Year in 2010 “IKEA’s promotion of a sound ethical environment shines within its industry and shows a clear understanding that operating under the highest standards for business behaviour goes beyond goodwill and ‘lip-service’ and is intimately linked to performance and profi tability,” said Alex Brigham, Executive Director of the Ethisphere Institute. Environmental Impact Sustainability and a ‘greener’ product set or way of working is an area we will cover in a later paper in this series. For consumers, it is almost the beginning of the journey. Many are keen to make a difference in this area, however, fewer are making purchasing decisions driven by this issue. There are some Retailers beginning to make green consumer choices easier for the consumer. Marks & Spencer is one European Retailer that has been working on its own sustainability agenda for the past 7 years and has been applauded by the consumer for driving sustainable market behaviours such as reducing plastic bags and cutting delivery miles. DO THEY OFFER A GOOD SHOPPING EXPERIENCE? There has been much written about the customer experience and the need for Retailers to produce an improved approach to ‘in-store experience’ in order to retain customers. Many consumers have switched their shopping habits to an online environment, and usually due to: • Convenience • Price • Choice (perceived in some cases) • Information • Increased confi dence in security The in-store experience can offer some amazing additional benefi ts, for example: “We’re doing this because it’s what you want us to do. It’s also the right thing to do. We’re calling it Plan A because we believe it’s now the only way to do business. There is no Plan B.” CORPORATE RESPONSIBILITY Retailers with ethical or charitable causes are also respected for their work with local communities and beyond. IKEA Sweden is one such Retailer, having received recognition as a high-ranking ethical company from Ethisphere a research based international think tank. • Engaging interaction – a consumer can touch/feel/try the product • Informative – a consumer can be guided to things you had not previously considered • Surprising – a consumer can be taken into an experience or trial situation • Human – they can interact with another person. Online, mobile and even in-store processes must form part of an overarching multi-channel strategy to ensure that all channels are coherent with the brand in question and that they provide a consistently high quality experience, allowing customers to easily purchase what they want, when they want and through whatever method they want. Ref. Webcredible report on retail customer experience, Nov 2011. www.webcredible.co.uk
WILL THEY OFFER ME A BENEFIT FOR BUYING THERE BEFORE? Some consumers will look for those Retailers where they will be offered a benefi t as a returning customer. Most Retailers offer programs to drive more retention and loyalty to their customer base e.g.: • Tesco’s loyalty card, a points-based system offering vouchers and rewards based on points collected through purchases in store and online. • Voucher systems offered to customers buying up to certain thresholds. • Body Shop sales events for customers, and reminder system. • Starbucks targeted location offers for customers holding a card. • The Sainsbury’s Nectar card – a loyalty points-based system shared by multiple companies including Retailers. There are also consumers who are loyal to a brand. They return to buy at the same Retailer on a regular basis because they see it as ‘their supermarket’ or ‘their clothes brand’. For these consumers, the social media context has added an additional way to become connected to their Retailer of choice, as well as other consumers who feel the same way. “The number of customers in the DIY sector continues to grow despite the diffi cult economic conditions. However, the average shopping basket has decreased over the last couple of years with the exception of customers who own loyalty cards. Customers with a loyalty card can represent up to 50% of some of our branches’ turnover.” Elise Boudet, Insurance Manager – Adeo Services DO THEY HAVE THE LATEST OR NEW IDEAS? New ideas and products attract some consumers. They will look for Retailers consistently searching for and offering new items or services. They will search these Retailers out. Expert prediction. “The next few years will see consumers much more focused on value, in the home and out of it. After years of travelling all over the world, many consumers will retreat to enjoying themselves more at home and in their own country, helped by the Internet not just to obtain better value, but also to entertain themselves more cheaply – and their children will do the same, as the smartphoneaccessed Internet provides them with hours of endless fun and bans boredom, as well as providing the key to successful shopping for themselves and their parents, through mobile applications. Worries about the environment may have receded a little, though they will return, with the relentless rise in oil and raw material prices reminding consumers that the human race does have to worry about resources. Nonetheless, the outlook for Retailers may not be gloomy, as many consumers spend at home rather than going abroad”. Prof. Merlin Stone, Universities of Demontfort, Oxford Brookes and Portsmouth, Research Director The Customer Framework. TO SUMMARISE…. • The consumer selects a Retailer based upon their own priorities. • Value for money and ensuring that the consumer feels they have made a correct decision are more important than ever before. • Finding the right product selection remains important for the consumer. • Retailers must consider the key ways to build trust with their consumer base through consistency of delivery in the key elements of their proposition. • The customer experience enables the Retailer to stand out for the customer, it is crucial to deliver it well across all channels. • Consumers are more aware of sustainability and community needs and are noticing the Retailers that are investing in these areas.
Page 1 and 2: PAPER 2: THE POWER OF THE CONSUMER
Page 3 and 4: THE POWER OF THE CONSUMER UNDERSTAN
Page 5 and 6: THE CHANGING FACE OF OUR POPULATION
Page 7 and 8: ‘LIFELONG’ IS FOR LONGER Improv
Page 9 and 10: YOUNG PEOPLE ARE STRUGGLING TO GET
Page 11: WILL THEY HAVE THE RIGHT PRODUCTS/P
Page 15: APPENDIX List of Useful Sources •

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