In the current financial state, industries are taking a hit. We’ve seen a multitude of issues from supply chains and warehouse shortages, even to workers’ strikes. It’s especially no exception for retail, which has become a common topic of discussion recently.
To help us understand further, we were lucky to have the opportunity to speak with an expert in the field, Elissa Quinby. Elissa is an expert in retail insights, starting her career as an Assistant Buyer at American Eagle Outfitters followed by two years at Google as a Digital Marketing Strategist. She went on to spend eight years at Amazon across multiple business units and functions including marketing, program management and product.
Today, Elissa is the Senior Director of Retail Marketing at Quantum Metric, an experience analytics company that helps brands to gather customer insights which drive intelligent decision-making.
We know that customers are starting to be much more budget-conscious – prioritising purchases that they need rather than what they want. Aside from discounts and marketing focused on necessities, how else can organisations help customers with the awareness of this new information?
While sales present an opportunity to get something at a perceived bargain price, value doesn’t just mean offering high-quality goods at the ‘best’ prices. Value involves personalising touchpoints using data from consumer wishlists to create custom recommendations or promotions. When budgets are tight, these are often more effective than general sales or deals.
Many retailers, particularly supermarkets, are also looking to entice customers by revising their existing loyalty schemes. Shoppers are looking for new ways to save money and loyalty schemes offer rewards and deals on groceries and other necessities. For example, Waitrose’s ‘My Waitrose’ scheme gives cardholders the opportunity to win prizes, save money on their shopping, and get products free of charge. This is great for shoppers who want to benefit from a loyalty scheme instantly and don’t want to worry about managing an online points account.
Are there any particular sectors within retail, i.e. fashion or homeware, that you can foresee having a challenging year in appeasing their customers? If so, why?
Any discretionary category is going to struggle this year as customers are prioritising needs over wants. Additionally, any category that has a high average selling price that customers invested in during COVID, like big-ticket items for house refresh projects or laptops for homeschooling, are also going to have tough times ahead. This is because customers don’t refresh those items annually.
Despite this, it’s a good opportunity for those retailers to think about accessories or adjacent items with a lower average selling price that customers may want to invest in annually. This can include items like home decor or new headphones.
You have a lot of previous retail experience and must have seen many things impacting the industry over the years. How does this current economic crisis and its impact on retail compare to previous crises in years gone by? Is this the worst we’ve seen so far?
2023 reminds me of the 2008-2010 US Great Recession. The job market is cooling and as a result, people are conserving cash and making fewer nice-to-have purchases. It’s in line with some very difficult years. But I am feeling optimistic given that inflation rates will ease.
To alleviate the effects of inflation, supermarkets can introduce or reintroduce loyalty schemes. When people’s budgets are narrowed down, their shopping behaviours change. Supermarkets that continue to offer rewards apps that give their regular or new customers discounts on products (grocery coupons, fuel recharge cards, fuel deals or cashback rewards) offer a long-term solution to alleviating some of the effects of inflation.
You recently said that, “one of the few things [retailers] can positively influence is customers’ shopping experiences. Including browsing, searching, checkout, and post-purchase support”. Speaking from your position of experience, which of these areas do you think is currently the most important and influential to retain customers in times of crisis like this current one?
During periods of high inflation, costs are somewhat out of a retailer’s control. Customers are going to be researching items more before they commit to purchasing and most of these decisions are made over desktops and mobile devices.
The challenge of measuring a consumer journey across multiple devices is huge. Meaning it’s more important than ever to be focused on customer loyalty and superb cross-channel experiences if retailers are going to have any chance of controlling the sales funnel.
As a Senior Director of Retail Marketing, are there any trends on this specific topic (retail marketing) you can see taking precedence in the industry this year? Any predictions into digital marketing advancements; perhaps in AI?
The shift to digital-first is set to stay. As such, this year, retailers will likely upgrade their mobile apps to provide more personalised offers and notifications (by using customer data paired with customer privacy). This will drive loyalty by demonstrating an understanding of customers’ wants and needs, encouraging them to stay in touch even after making a purchase.
That said, retailers should strive to develop and enhance their omnichannel retail strategy to cater to all combinations of consumer purchasing preferences, given that some may prefer traditional in-store methods of shopping.
“It’s crucial that a careful balance of discounted and non-discounted periods is maintained to ensure merchants remain profitable.” Can you share anymore insight into this recent piece of commentary? How can this balance be maintained, and when is the right time for discounts to be introduced to ensure both profits and happy customers?
With the recession starting to bite, retailers may be inclined to introduce sales throughout the year to attract consumers. 34% of consumers are increasingly looking for offers and reduced items. Despite this, retailers must be wary of the margin erosion and decrease in brand value that can occur when the price of goods is lowered too frequently. It’s crucial that a careful balance of discounted and non-discounted periods is maintained to ensure merchants remain profitable.
To remain competitive, retailers must provide value. But this doesn’t just mean offering high-quality goods at the ‘best’ prices. Budget-conscious shoppers also want knockout experiences, where digital journeys are intuitive, smooth and fast.