KamLibrary - Political Retailing in Times of Unprecedented Change?

As we continue to undergo fundamental political change worldwide, the impact of politics upon retailers and retailers’ influence upon political change is becoming a more important factor in supplier-retailer relationships. Moreover, the political climate is changing in ways that complicate the supplier-consumer relationship.

These changes include the significant step forward in the development of the EU following the ‘yes’ result in the Irish vote on the Lisbon Referendum, continuing fall-out from the UK MPs’ Expenses scandal, a complete loss of confidence in the banking system that is seemingly obvious to all but the banks themselves. Incidentally, this resulting loss of consumer loyalty will become more obvious as Tesco banking begins to gather momentum at the expense of traditional banking, everywhere…

Given the resulting challenges to consumers’ ability and willingness to spend as economies everywhere attempt to pull out of the global financial crisis, it is perhaps useful to explore the growing political influence of retailers on the provision of consumer choice in their markets.

The focus upon consumer-shopper need-satisfaction

Given their sensitivity to consumer need and their ability to respond rapidly and cost-effectively to consumer-shopper behaviour, using insights derived from their intimate knowledge of their target audience in terms of name, address, income, shopping behaviour, hobbies, family circumstances, financial exposure and state-of-health, it is obvious that the retailers are evolving a powerful marketing tool.

For instance, Tesco’s Clubcard penetration of over 50% of UK households, measuring 45 pieces of data on each product, and with an additional 12m members in Ireland, Poland, Slovakia, Thailand, China, Malaysia and South Korea means that the retailers are moving way beyond the collection of basic numbers in their use of deepening insight into consumer behaviour as a basis for focused need-satisfaction. This constant attention to the meeting of consumer need, coupled with a determination to encourage repeat purchase as proof of need-satisfaction, can build a degree of consumer loyalty that can only be envied by those in political power.

If politics is meant to be about bringing about willing change in citizens’ behaviour, it could be said that retailers have more political power than the politicians…

Retailers’ impact upon consumer and economy

Anyone doubting the potential influence of retailers should bear in mind their ability to exercise real political power in two ways, direct influence on the consumer-shopper in-store, and via direct impact upon the economy.

In the current economic climate, they can use price, the ultimate persuader, to modify the entire value-set of individuals, whilst they can directly affect the economy via their leverage in terms of influencing, and even controlling inflation, the balance of payments, direct employment of significant numbers of wage-earners, and especially their ability to control access to in-store traffic-flow. For instance, their impact on shopper behaviour can be seen in the way they have responded to shoppers trading down in their purchases of top-end toiletries, and embracing quality private label as household budgets have come under increasing pressure, all without negatively impacting retailer profitability.

Specifically, doubters should reflect upon retailers’ track record in unilaterally dismantling restrictive and out-of-date legislation in the EU and UK relating to limited shopping hours, Sunday trading, Resale-Price-Maintenance, the Net-Book-Agreement and the provision of banking services, in recent years.

Even if it takes a few ‘failed’ legal cases and prosecutions to make the point that a particular law has passed its ‘sell-by’ date - so be it; especially when the publicity resulting from a £1,000 fine not only reinforces their image as the peoples’ champion, but would probably cost more than £250,000 via prime-time TV in the real world.

Real political contact

Meanwhile, whilst politicians attempt to sway the public every five years via direct dialogue in the run-up to elections, a retailer manages to persuade most of the population to come to a store and pay hard-earned cash for ideas, sometimes several times a day, in unprecedented economic conditions.

Whilst they may have slightly different perspectives in that retailers see store traffic in terms of consumers and shoppers, and politicians see voters carrying shopping baskets….the potential for influencing change via shopping behaviour soon becomes obvious to both sides.

And bearing in mind that all voters are shoppers, whereas not all shoppers are voters, ‘captive’ store-traffic can represent a fruitful target and potential source of votes for a political party…

So what if retailers are effectively running the country? Perhaps suppliers should be more concerned about the possibility of the politicians upping the ante on trade funding by competing for access to the consumer-voter in the aisle….

For KamTips on 'Political Management of the Consumer In-store' see Namnews – October 2009

Date article published: October 2009

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