This week, Retail Week published a guide for retailers identifying the four key factors that they need to know about their customers in order to stay profitable in 2018. In these times of economic and political uncertainty they suggest that understanding customer behaviour will be absolutely vital for retail businesses wishing to stay afloat next year.
Retail Week conducted the exclusive consumer research in association with Pure360, Oracle, Mastercard and Flixmedia. The results of the survey – from a sample of 2,000 consumers – indicate four key areas where retailers will benefit from knowing their customers in the coming year so that they are better able to manage their expectations and respond to their needs:
1: Know their Mood
The current economic climate and levels of uncertainty have significantly contributed to consumer anxiety.
Retailers are urged to help customers not just by offering discounts or value for money offers but also by lifting their spirits with positive messages which instil optimism, as Joe Staton, head of Market Dynamics at GFK explains:
“As consumers we now shop in a culture of coupons, vouchers and special offers. However, [we] will also respond well to positive messages and anything that promises a brighter future.
“Maybe now really is the time for a new ‘I’m backing Britain’ campaign to relaunch confidence in our homegrown produce and talent, and get us to open our hearts, minds and wallets.
“Retailers are being urged to help customers by not only offering value for money and providing discounts and offers, but by lifting dampened spirits”
2: Know what they want
Despite uncertainty, many shoppers report that they expect to spend more money in 2018. People will always need certain items and if retailers want to take advantage of this then they need to know exactly how much consumers have to spend and what they expect to spend it on. James Sawley, head of Retail and Leisure at HSBC’s corporate banking division describes how discretionary spending on non-essential items has changed:
“Grocery represents about 50% of retail sales and people need to eat. Food inflation has kept the numbers up despite Brexit uncertainty. More discretionary spending, such as clothing and furniture, has been hit harder.”
3: Know how they want to shop
Despite the steady growth in e-commerce many customers still prefer shopping in store. Staton suggests that they should be able to transition effortlessly from device to device whether at home or in-store:
“Retailers must ensure any transaction is frictionless, personalised and fast, irrespective of channel or location. Why prioritise one gadget over another when consumers expect and demand a seamless and similar experience however and wherever they choose to shop?”
4: Know the key trends of 2018
Retailer should be operating with full transparency and be able to demonstrate that they care about consumers and their values.
Sustainability and provenance of goods now rank highly in purchasing decisions. For example consumers have become aware that plastic waste is becoming a big problem and this may now affect how and where they shop.
Co-op and Iceland have responded swiftly to these concerns by signing up to a plastic bottle deposit scheme. By responding quickly and effectively like this, these brands are seen as really caring about their customers and they create a feel-good effect by making consumers feel like they are making ethical choices when they shop at their stores.
What steps are you taking towards a profitable 2018? Have you spotted any other trends like this which may affect customer spending over the next twelve months? Let us know in the comments section below! We’d also like to take this opportunity to wish all of our customers and followers a very Merry Christmas and a Happy and Profitable New Year from all at Barber Design!