The UK retail industry remains extremely competitive and ever-evolving. When Woolworths went bankrupt 14 years ago, Wilkinsons (now Wilko) took advantage by taking over many of its prime store locations. The chain sold similar products, at lower prices. However, with increased competition from rival value retailers this strategy could not sustain Wilko, which fell into administration in August, writes Codie James, Delivery Director UK North at Sullivan & Stanley.
The retail landscape is characterised by low entry barriers, extensive consumer choices and competitive prices. Customers can now access products from a variety of digital touchpoints and from multiple markets worldwide, meaning that to thrive in this landscape, retailers need to embrace a refreshed approach to growth and getting the formula right needs to remain top of mind.
A consumer-centric mindset
Putting yourself in the customer’s shoes is one of the first steps towards lasting value for any business, as it opens the door for an inflow of innovative and constructive ideas that rejuvenate the customer experience. During the pandemic, retailers demonstrated adaptability by prioritising consumer needs through doorstep deliveries and click-and-collect, ushering consumers into the new normal.
Wilko may not have fully understood the challenges associated with its high street locations. For example, it stocks bulky household goods and products such as paint which are harder to carry. The retailer therefore may have better benefited from exploring other routes to consumer satisfaction such as using their current stores as showrooms and giving the option of home delivery for those bulky purchases giving the customer a much easier order to delivery experience.
While it’s understood that the core of every business is to generate revenue, keeping the customers happy by knowing their needs is one of the best paths to get there. This is further explored in Sullivan & Stanley’s book, The Future Business Formula which examines the need for organisations to constantly remain in ‘beta mode’. When an organisation is in continuous beta mode, it’s improving all the time, comfortable with ambiguity and open to embracing change. When it comes to ever evolving consumer expectations, it’s imperative that retailers operate like chameleons, constantly adapting and changing based on consumer demand and shifts. Having this mindset means businesses are more adept at responding to evolving needs which in turn creates a closer connection with consumers and ensures a higher level of customer satisfaction.
Creating added value to boost loyalty
In order to successfully adapt, it is also crucial for retailers to consider where they can create added value for customers, this in turn can better drive loyalty in the long term. Investing in solutions that can help personalise the shopping experience can be a huge benefit for shoppers. This can range from curated experiences – think John Lewis’ in-store stylists who help inspire shoppers, recommending and advising on the best looks for individuals free of charge.
Additional effort into making stores ‘experience destinations’ is another way of adding extra value, keeping customers engaged and interested in the offerings. I recently took my two little girls to Lush and as soon as we walked in the assistant had them trying out bath bombs, taking the time to understand what they liked and creating an experience that made my girls beg for the products – while also very naturally, upselling me as she told me how they also offer birthday parties. Through this, they were able to craft an experience that made my children fall in love with the brand in store which they wouldn’t have been able to enjoy online.
Away from in store, innovations in AI/AR technology can also provide a more elevated online experience. For example, premium spectacle companies like Oakley and Ray-Ban have harnessed virtual try-on solutions to allow customers to realistically experience their products from the comfort of their own home to help them make a more informed decision.
Don’t forget your talent
With a lot of focus on the consumer, retailers must also ensure that they do not overlook their own talent and maintain a culture where the people are at the heart of the business. A retailer’s employee value proposition has never been more important post-covid as many workers have re-evaluated their priorities making it harder to retain talent in high pressed, demanding roles.
Modern, successful businesses need to focus on how to better provide flexibility to their workforces to align further with this new dynamic. This should also be balanced with a stronger focus on empowering staff – no matter what level – so that they feel a sense of fulfilment, loyalty and responsibility in their roles and the business’s overall mission.
When I worked at Starbucks (many years ago) we were given the freedom to surprise and delight customers with treats from time to time, this empowered staff to create little moments with customers on a local level while also helping to build loyalty and confidence that the company trusted us to take initiative and do the right thing.
The days of multi-year planning are behind us. Consumer trends and expectations are constantly shifting, and retail businesses need to ensure that they remain agile – and in ‘beta mode’ so that they can swiftly adapt and adjust their offerings to suit these changing needs. However, it is also essential that retailers focus on several key areas that will ensure they remain top of mind with consumers. Those that focus on the customer first and take the time to better understand them and service their needs will be at an advantage and will help retailers thrive in the competitive retail landscape.