Chris Gates, director of retail at Hitachi Consulting UK, examines how the retail barometer is indicating a surge in customer loyalty following this summer’s games
With the Olympics upon us, estimations vary about the value of this summer’s games to the UK economy. UK prime minister, David Cameron, anticipated this summer’s events would generate more than £13bn pounds over the next five years. While Visa Europe’s research highlighted the Olympics will create an economic legacy worth £5.33bn by 2015, with high street retailers set to enjoy an uplift of £210m.
One point that is largely agreed among industry experts is the UK economy will benefit from increased spending as visitor’s come to London for the once-in-a-lifetime event.
This summer’s games will attract people who have never been to London before, as well as many returning visitors, providing retailers with a unique opportunity to showcase London with extended opening hours and suspension of Sunday trading laws.
However, the challenge for many retailers will be how to build long-term loyalty with new and existing customers, and ensure they remain engaged with the brand long after the closing ceremony.
Leveraging the Olympic effect
Smart retailers who look to make the most of the opportunity to generate long-term customer relationships will aim to understand which of their customers during the Olympics are existing contacts, new prospects from home markets, or travelling from overseas; and which channels they are shopping through.
Those with strong integrated multi-channel operations will also be able to provide exceptional customer service through deploying mechanisms, such as order in-store and deliver to home, to help visiting customers with their tight baggage restrictions. In addition, those with leading customer service tools, such as assisted selling mobile applications, will be able to engage a whole new army of brand evangelists. I am still talking to friends about the in store experience created in Uniqlo, Hollister and Abercrombie on 5thAvenue from the annual trip to New York in January for NRF, and am sure those brands that delight their visitors during the next six weeks will win new long-term friends.
In addition, as we gear up for the Olympic Games over the next couple of weeks, it is important to remember shopping patterns may be disrupted. Ocado recently issued a warning about the negative impact of the games as people alter shopping habits and traffic restrictions hamper deliveries. By having real-time access to market intelligence, retailers can monitor key factors such as supply chains, demand patterns, market differences and lead-time to navigate the complex purchasing landscape and keep up with changes to the pace and scale of retailing.
Capturing new customers
It’s a well known fact it costs more to win new customers than it does to keep existing ones. With the Olympics putting the spotlight on London and bringing thousands of visitors in to the capital, retailers can use this as an opportunity to acquire new customers and continue driving the conversation using a multi-channel approach.
Those retailers that adopt a cross-channel experience to engage customers have seen sales rise substantially, for example, Marks & Spencer’s recently revealed multi-channel sales rose to 14.9% over the last quarter and Dixons Retail reported a 30% rise in multi-channel sales over the year, with UK and Ireland multichannel sales up by 48% in the second half alone.
The latest statistics are indicative of how consumers spending habits are changing. The explosion in ubiquitous devices constantly connected to the internet means today’s consumers can shop across a range of channels on demand.
However, before retailers can take advantage of the explosion of sales channels now available, it is imperative they optimise back office processes in order to target savvy customers with relevant information, across the right channel and at the right time. By adopting this approach, retailers can get to know their customers better and engage them in dynamic ways that foster lasting relationships.
However, to continue building brand advocacy and encourage customers to make future purchases, retailers need to maintain a single view of the customer even after the Olympics.
Today’s customers are savvy – they know the information brands are collecting about them and expect it to be used.
Smart retailers will use the Olympics as a unique opportunity to convert a one-off interaction with visiting customers into a long-term relationship, creating a global network of loyal customers that maintain contact with the brand. By monitoring the products customers are purchasing, the channels they are using and how they interact with the brand on an on-going basis, retailers can leverage the power of the Olympics for long-term gain and adapt retail strategies so customers are targeted with timely, targeted and relevant campaigns that boost engagement and increase sales.