So much has been discussed about what will stick and what will revert back when looking over the changes we have all adopted over the last 15 months. How certain trends have accelerated (internet sales as a percentage of total sales have jumped from being under 20% in the UK in 2019 to now being 30-35% in the first few months of this year). How certain assumptions have been destroyed (consistently, 15% of all GP appointments in the UK were remote pre-pandemic; at one-point last year it peaked at just under 50%, and now appears to have settled back to about 35% of all GP appointments). How certain assumptions are still in the balance – when travel becomes normal again, will we demand more of our local shops and services because many of us will only work in an office for three days a week, or will most of us go back to commuting to our place of work five days a week?
Coming out of these enforced lockdowns, we need to remember that what customers want from their retail experience actually has not changed:
1). Great value
2). Ever-improving convenience
3). An enjoyable surprise or two thrown in
But how these each get delivered may well need to go through a transformation, and the implications for suppliers and national account managers may well require a radical rethink.
Let us take each of these in turn. First, great value, the combination of quality and price. As you know, this is a subjective notion defined by the shopper and depends on many factors, including personal preferences, budget and occasion. How brands create perceived quality at a surprising price will continue to be vital.
But emerging as a new mainstream factor is the notion of “vintage” or “well-loved” to demonstrate long-lasting quality at reduced prices, and enabling a more sustainable, circular loop for products (e.g. Asda’s tie-up with Pre-loved Vintage Wholesaler to create a second-hand vintage range in its stores, or Made.com’s tie-up with Geev for its first giveaway initiative). This impacts not only the core product, but also aspects like the packaging of the product and the distance it has had to travel to be in a customer’s hands. Newness has always been able to attract a premium. Will this continue? Are we witnessing a change in the status of new products in our portfolios? Or can suppliers find other ways of increasing net margin through determining (and extending?) end-of-life value of their product and materials, and passing some of this value onto customers?
Onto the second customer need – convenience. Ever since supermarkets existed, the key reason why over 70% of people, when asked, chose their supermarket was because it was their nearest – despite all the attempts to drive loyalty by each supermarket brand in other ways and hence the need for an ever more refined property strategy. In addition, for the first time in six years, last year saw brands grow ahead of own-label as customers sought products they know and trust through the crisis (see NielsenIQ research for The Grocer’s Britain’s Biggest Brands report in NamNews).
But now, convenience is defined in radically different terms. We are now used to brands and retailers knowing what we bought, where, how we researched it on the internet, and therefore giving us ever-more helpful suggestions as we move onto considering another purchase. Amazon’s consumer-centricity and technology prowess means their personalised communications are so accurate in terms of our probable needs that we now rarely regard them as intrusive. And so we expect that from all the brands we interact with. Whether I want to pick my purchase up or have it delivered at home – I expect retailers to do what is most convenient for me (which in turn is reducing how long I have to wait for my deliveries, as the major chains tie-up with the likes of Deliveroo and Uber Eats, or start-ups like Getir offer groceries in minutes). Omni-channel integration was an aspiration for most 18 months ago. It is now a pre-requisite.
Different channel promotional strategies, opportunities to disenfranchise retailers and go direct, new subscription or rental models. All these ideas are now in the mainstream. Suppliers have plenty of opportunities to disrupt and differentiate – the key is to prioritise according to what will really address an unmet customer need and execute brilliantly.
And then finally, there is the ability to exceed a customer’s expectations, i.e. always delivering ‘more than it says on the tin…’. This could be in providing customer service (especially in righting a wrong). It could be in the price, or the quality of what one finds. It could be the ease with which one can navigate a store (physical or online) or the quality of the lunch in the department store restaurant. It could be in how you have reimagined your packaging, previously disposable, to now be valued and reusable by customers.
Again, suppliers have a key role in thinking through how their products can contribute to these moments of truth with customers that go a long way to building trust and loyalty – in the men’s grooming and detergent sectors, Harry’s Shave Club and Smol are threatening the status quo with their product and delivery propositions. And often, that will require increased collaboration through, and across-sector in a way previously unimagined. It follows that a supplier’s perception of how well a retail customer has embraced these post-lockdown changes has to be a basis for increasing levels of trade investment.
So as human beings, I truly believe our motivations have not changed – we want to make the most of the time we have. So brands and shops need to deliver on value, convenience and surprise in order to win. However, the art of the possible in delivering this requires a fundamental shift in thinking.
