Customer In Command...

Retail is changing. The original retail business models and supply chains have arguably been product-focussed, based on achieving a level of stock turn from a fixed space at a planned margin. Yet it is clear that consumers in the 21st century are forcing an evolution of the traditional paradigm, into one which is substantially more customer-centric, as we become increasingly ‘savvy shoppers’ placing higher expectations on our shopping experience than ever before.


A number of changes in consumer habits have forced this shift in focus away from product to customer experience and the ‘customer in command’ model, including these key trends:

• Considered Purchases

Purchase decisions are increasingly well-researched and thought through. As a result of factors such as the impact of prolonged economic difficulties leading to more cautious spending for consumers and relentless competition between retailers, and the increasingly tech/internet savvy nature of the average shopper; customers are typically spending more time researching their purchases (particularly larger ticket electronic items) before buying- comparing prices, specifications, deals, using sites such as Kelkoo to ensure they get the best value for money possible. In an example of ‘collaborative consumption’, the reading and writing of product reviews and sharing of information is becoming an increasingly important part of the purchase lifecycle. John Lewis have demonstrated their understanding of this concept with their recent launch of a ‘product review service’ on their website allowing customers with JL accounts to write comments and rate products. Retailers must ensure a good representation online to ensure they don’t miss out, with enriched product data, including reviews, to give the consumer as much information as possible, and of course strategic pricing and constant competitor monitoring is necessary to drive sales.

• Multi-Channel

The concept of multichannel has changed the retail fulfilment model beyond recognition. An increasing number of retailers (although not all) have transactional e-commerce (web) and m-commerce (phone) platforms in additional to traditional bricks and mortar stores. Retailers are now expected to provide a consistent customer experience regardless of which of these channels the customer has touched upon; which includes a digital customer experience that replicates the more customer-focussed store experience; and as such retailers such as Littlewoods, Asos (neither of which have branches) provide video footage of clothing in action to allow the customer a better look at items they are unable to try on; whilst other retailers provide the ability to ‘chat’ with advisors online or in the example of Dixons and Currys- provide personalised product recommendations, as an in-store advisor might.

But those with arguably the most successful multi-channel strategy are those able to provide an ‘order anywhere, fulfil anywhere’ model that provides the customer full flexibility for the most convenient purchase/fulfilment model for them, although this presents significant supply chain challenges. John Lewis popular and user-friendly ‘Click and Collect’ model is often cited as a popular example of this; as is Argos.

It is no coincidence that a recent study indicated that for the first time in nine years it is not Stores but Multi-Channel which is the investment priority for retailers in the coming year.


• The Rise Of Social Media

The swiftest impact to the retail industry in recent years has arguably come from the world of social media. It is testament to the significant of Facebook to businesses that retailers are starting to launch ‘f-commerce’ sites i.e. transactional pages on Facebook, seeing it as a viable additional sales channel. But perhaps the largest impact has come via the change in the customer relationship that social media enables. Customers increasingly use sites such as Twitter and Facebook to express their feelings about brands, purchases, shopping experiences in a very public way, and expect better engagement, a more connected relationship, and demonstrable listening and learning from retailers. Using these channels to engage directly with customers provides a valuable opportunity to enhance customer service, proactively dealing with issues, providing feedback, building loyalty and trust.

They can also serve as an important marketing tool, as Debenhams has recently demonstrated with its ‘brand advocacy’ programme, incentivising customers to use social media to relay their positive shopping experiences; but also as a rich source of customer data and insight; through analytics and listening tools (such as that provided by TCS). Tesco’ fashion brand Florence + Fred recently demonstrated the power of a well executed social media strategy (including proactively reaching out to online influencers such as bloggers) having achieved a number of objectives such as: repositioning the brand, reaching a new audience, pushing their core message of affordable fashion, creating interest and advocacy in the brand, gaining valuable customer insight, and driving over a £1m in additional sales through social media originated activity.

•  Example: Marks and Spencers
UK-based variety chain Marks & Spencer recently named TCS and SapientNitro as the new multi-channel partners it will work with to replace Amazon. The move comes as Marks & Spencer looks to increase multi-channel sales to between GBP800 million and GBP1 billion by 2014 facilitated through the building of key capabilities such as e-commerce, content management, search and analytics, as part of this development project. M&S aim to be an early adopter of the latest multi-channel technology, in recognition of how important they see this space to future growth and success for the business.