Thriving Through Uncertainty – 5 Critical Steps for UK Retailers

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Tim Kershaw, Chief Executive Officer, Libra Europe Consulting, argues that the recent strains showing in the major high street retailers have their roots in several step changes in the consumer environment.

A move to rental rather than purchase of homes has impacted big ticket homeware and white goods. This has been exacerbated by an industry wide improvement in reliability and quality and a slowing in step change technology innovations leading consumers to have little need to acquire the latest products.

Across all categories the on-line suppliers have largely mastered customer service. Possessing a lower cost model, coupled with the ability to provide almost limitless choice from the comfort of your home they provide instant price and range comparisons making it easy to buy, thereby negating their need to sell a specific product on its merits.

These changes have made acquiring goods very easy and highlighted the relatively enormous time and effort required for a traditional shopping trip.

The challenge for traditional retailers must be:

“Why would people come into my shop and buy something”

To address this, retailers can no longer rely on outdated formats and propositions in the vain hope that customer loyalty will outweigh the benefits of range, price and convenience provided by the internet options.

Thus, traditional retails must look to significantly differentiate themselves from their competitors and provide a differentiated shopping experience where the consumer can identify clearly the benefits of physical shopping. It is about reverting to the traditional mantra “retail is detail”

1. Location

In order to ensure success retailers must understand properly their customer profile and only retain a physical presence where there are enough appropriate customers. The history of growth for growths sake is a major reason for the current spate of retail failures. Focus must be tight and not driven by blind ambitions for growth. At the discount end of the market Wilkinson’s and Primark have done this exceptionally well whilst Selfridges have also made sensible location choices for their premium offering.

2. Layout

The traditional layout and style of stores has been a turnoff for many customers making shopping difficult and unpleasant. Layouts must now provide a relaxed and enjoyable shopping experience with clarity on where to find goods. Payment options should be fast and convenient, outside of discount clothing retailers a twenty-person queue to pay is a major customer turn off

There are numerous examples of good practise from the IKEA labyrinth to the stripped back tech of Apple stores, these stores make the effort to understand their customers and standout from the crowd.

3. Staff

Staff training is vital the store must be able to provide impartial and relevant advice to customers and staff need to be well versed in the arts of good advice coupled with upselling and cross selling to maximise the return from every customer visit. Despite all their other woes M&S have retained a reputation for helpful and informed staff in the stores and the M&S training is still highly valued by customers and competitors.

4. Marketing

Know your proposition and drive customers understanding of it very hard. Too many retailers fail to properly engage with new customers, assuming the customers know who you are and what you do is lazy and fatal. Most failed retailers lost the battle because no on knew why they were worth a visit. ALDI and Lidl have done this exceptionally well not only promoting value but quality as well through carefully targeted campaigns which reinforce their companies’ basic values and consumer message.

5. Experience

In the store a good layout and well-trained staff will address some of the battle, but the whole experience must be base around “making buying easy”. Additional services and loyalty schemes will help make the experience different and pleasurable promoting customer recommendation and retention. Stores like Apple, Lush and John Lewis have managed to make shopping bearable.

This is all about understanding and focussing on the original brief;

“Why would people come into my shop and buy something”

If you cannot answer that question positively and objectively don’t rely on the customer to do it for you

Tim Kershaw, Chief Executive Officer

www.libraeurope.com