Shoppers are no longer loyal to their favourite retailers and will ditch them in favour of low prices and high convenience from a multi-channel partner, according to new retail survey by Squire Sanders, Kantar Retail and the Retail Trust.
Nearly all shoppers (90%) use stores to look for products but often complete purchases later with the cheapest, most convenient retailer.
Half of shoppers do not care about online retailers exploiting the tax system as they are more concerned with low prices and convenience. Seventy per cent of consumers still like to shop in-store because they want to touch and feel what they are buying but 60% prefer multi-channel retailers for added convenience and cost savings, researchers found.
The report highlights the issues that have killed off high street loyalty and offers recommendations for how it can fight back in the new multi-channel environment. Making the most of the store experience, selective price matching and making sure retailers have bright knowledgeable employees are recommended – especially as half of all shoppers said in the quest for value and convenience they are not concerned about online retailers exploiting the tax system.
While retailers are blamed for letting the basics slip, such as service and pricing, local authorities were criticised for parking charges in town centres. The survey revealed 80% of retailers and 60% of shoppers earmark parking charges as a key factor behind the decline of the high street.
While consumers are shopping more online, pure-play retailers should not be complacent – the survey shows 60% of shoppers prefer to shop at multi-channel retailers (ie retailers with both web and physical stores). The ease of ‘returning products’ and being able ‘to speak to someone if something goes wrong’ were among the reasons highlighted.
The report made six top recommendations for improving the high street:
- Multi-channel is the way forward. Pure-play retailers are acknowledging the benefits of a physical presence while store-based retailers embrace online. Shoppers don’t shop channels – they shop retailers and categories
- Don’t rely on shoppers to be sentimental – in the quest for value, quality, service and convenience, shoppers will be promiscuous and do not have loyalty to the high street
- Head off showrooming threat – 76% of showrooming shoppers defect online for lower prices. Selective price-matching is recommended to lure shoppers as is improvements to store design, merchandising and service
- Make the most of bricks and mortar – retailers need to play to their strength of being able to offer greater interactivity, theatre, product trialling and sampling in stores
- Raise the bar – get the basics right such as pricing, merchandising, housekeeping, service, ranging, marketing or positioning and good, interactive staff
- Treat parking as an incentive, not a punishment – shoppers are being penalised if they want to support local traders and parking charges are a key component of the high street’s death spiral
Bryan Roberts, retail insights director at Kantar Retail, said: “Shoppers are relentless in their search for value – both in terms of money and time. The proliferation of choice generated through multi-channel, supermarkets and shopping centres, combined with the rampant promiscuity of shoppers in terms of retail repertoire, means that the high street is under unparalleled pressure. If changes – from both local and central government – are not forthcoming, then high street retail as we know it is facing a steady slide into oblivion.”
Matthew Lewis, head of retail at global legal practice Squire Sanders, said: “ Despite hard times, we won’t stop shopping but it is too easy for consumers to benchmark prices in-store on their mobile. Retailers need to compete by improving the retail experience, entertain consumers, know the customer and ensure they have the best retail employees.”
Richard Boland, CEO Retail Trust, said: “The shape of consumer preference in the purchasing channel is changing and should be embraced as an opportunity not a threat. Retail is one of the most versatile and imaginative sectors we have in the UK and over the coming years we will see it respond to changing behavioural patterns with innovation and stimulating new concepts. Whatever shape the future takes we at Retail Trust will be there to support the needs of our constituency, the businesses and the employees.“
Retail Times’ readers can read the retail white paper, A Nation of Shoppers – But is it a Nation of Shopkeepers here.