How can you win market share when consumer confidence dips?
Consumer confidence is at an all time low. The words no retailer wants to wake up to. But the post Brexit reality hit hard when GfK released interim data from the week following the vote to leave the EU.
Many of the business leaders I have spoken to agree that while the negotiations go on, there is really nothing else for it but to get on with things. If we speculate on recession we will only talk ourselves into one.
While there is some optimism that consumers will eventually come round to the same conclusion, retailers know they will need to work hard and compete for the pound in the pocket.
That’s especially true when you consider the numerous pieces of research published this year showing a new trend emerging - people are looking for experiences rather than things. Good news if you are in the business of entertainment and running large sports, music theatre venues, and theme parks.
However, I don’t think it matters if you are entertainment or retail. You will have to persuade people though the door and to the gates, and then entice them to buy.
What’s clear from the analysis we have done is that those merchants that can adapt to the change in consumer buying patterns and understand which promotions attract shoppers will be the winners.
That’s not to say that promotions are the only way to win customers over. Far from it. A great deal of effort will need to go into the customer experience from making it very easy to purchase online, to training staff so they deliver great service every time, to having the stock people want at a price that is great value.
NPS and voice of the customer have always been a good starting point when it comes to consumer experience. It’s a good way to hear directly from people about what they think and what makes them decide to do something, or not as the case maybe.
Look at the very simple innovation Tesco has just launched that reflects how they have listened to feedback – multi packs of chicken breast that come individually wrapped to reduce waste. So simple and a change that will drive sales.
But I can’t imagine Tesco believes that an innovation like that will change the sales performance of the company.
For that they will need quantitative insight as well. The nitty gritty data that shows how the ‘buy one chicken get a free curry sauce’ promotion performs is what will really help them plan offers that are relevant, timely and drive market share.
We know offers drive sales. There’s no question about it. But they only drive sales, and more crucially loyalty, if you can show the customer what else is worth adding to their basket, and therefore why it’s worth returning. Ultimately that’s how you’ll ensure the promotions you run to attract new people who are profitable. There really is no point investing in offers if when they come to an end you find it didn’t pay off.
That’s why real-time quantitative analysis is so critical. The ability to see, while the promotion is running, how it is performing, see which stores have a good response to the promotion, and work out if you need to advertise it harder near the stores that don’t, or even if you should just drop it entirely and try something else.
As trading gets tough, it’s this sort of real-time insight that can build a brand and loyalty. One that is known by its customers for getting it right. One that anticipates what you want, when you will want it and at a price you expect.
Only by blending quantitative and qualitative insight will you stand a chance of competing with a winning strategy.