In 2017, UK retailers face one of the most competitive environments in decades. With the continuing shift in customer preferences towards online and increasingly mobile shopping, an unstable global marketplace that demands unprecedented technological sophistication, some retailers are being confronted with challenges to their very existence.
The UK’s imminent exit from the European Union adds further complexity to the mix. The retail sector faces a perfect storm: how can retailers balance change and increasing costs whilst still embracing opportunities? Our Total Retail research shows that remaining customer-centric, more than ever before, is essential to stay ahead.
Our 2017 Total Retail Global survey is our most comprehensive to date, with feedback on consumer behaviours and expectations from over 24,000 shoppers across 29 territories and 5 continents - including 1,003 consumers in the UK for the sixth consecutive year. The findings can help UK retailers solve the puzzle of where investments should be made in 2017 to ensure that they thrive in the years ahead.
To get ahead of competition, embracing a Total Retail mindset throughout your whole business is key.
If you’re short on time and would like a quick overview of our 2017 findings – download our 10 things you need to know about Total Retail report. If you have little longer to browse, download our full report.
Disruptors are reshaping consumer behaviour. In response, retailers are stepping up their game. In our analysis, we examine six closely intertwined focus areas, or battlegrounds, that retailers must focus on to better attract and retain today’s mercurial shoppers. The underlying theme of these battlegrounds: to create an immersive, seamless, brand-defining experience for consumers across all channels, one that will keep them coming back.
Disruptors are now competing on speed, variety and convenience. In fact, shoppers told us their motivation for shopping online isn’t always dictated by price; 48% selected convenience as the main reason for shopping online. Across all channels, however, low price continues to dominate shopping decisions for 59% of shoppers. 35% of shoppers use price comparison sites for their inspiration and 38% start their product search at Amazon.
Brand loyalty, while hard-won, is not easy to shake and 65% of UK shoppers consider themselves to be loyal shoppers, versus 61% globally. That's good news for retailers who have cultivated close ties with shoppers over many years. It also reinforces the power of one-to-one connections with customers via personalisation, which new entrants online cultivate rigorously.
Cost-prohibitive last-mile delivery issues continue to challenge retailers who are experimenting with a combination of options in response to customer preferences for speedy delivery. 29% of UK shoppers say that fast and reliable delivery (same day, collect from store or designated place) and a 28% good returns policy (free or return to store) are reasons for shopping with their favourite retailer.
Ultimately, UK retailers need to entice customers to interact with them in-store — to keep them coming back. To do this, they need to provide a convenient, frictionless in-store experience, with the added advantage of knowledgeable sales staff who can explain product offerings, the number-one preference of in-store shoppers, ahead of ambience. It is important, perhaps more than ever before, for retailers to invest in talent and the training and development of their in-store associates.
This is a key opportunity for UK brands looking to attract new customers from overseas, as 44% of global shoppers say they need to see and touch the product before purchasing.
For a technology platform to succeed, it has to be part of an overarching digital strategy that encompasses the entire organization — rather than an ad hoc point-in-time initiative. Respondents to our survey were more open to using mobile payment via smartphone this year than they were last year and since 2014 there has been a 39% increase in the number of consumers using their phone for purchases at least once a year. However, almost one in three Digital Natives find that mobile websites are not easy to use.
Continual experimentation and ongoing course correction is at the core of disruptors’ success — even when they are ahead of the game. From self-checkout devices to circumvent long check-out lines to touchscreen fitting-room mirrors that offer immediate help from sales associates, retailers are experimenting with a number of options to make the shopping experience simple, convenient, personal, and engaging.
Watch our video to hear Rob McWilliam, former VP of Amazon UK, explore 5 key trends disrupting the UK retail sector.
We’ve identified four emerging themes in the UK which should remain key focus areas for retailers in 2017. These are:
Together, these four areas form the firm foundations of an excellent customer experience.