Overreliance on Tech and Discounts are no Substitute for Customer Experience

January 16, 20196min

Looking ahead to some challenging conditions in 2019, retailers will need to address two flawed strategies: discounting and an over-reliance on technology at the expense of customer service.

What used to be one off days like Black Friday and Cyber Monday have become a month-long slog with retailers falling over themselves to better their rivals’ discounting. This approach has been jet fuelled by continuing uncertainty over Brexit, with bigger and earlier discounting, tempting cautious consumers.

However, the race to the bottom leaves no one at the top. Certainly, the simplistic narrative of high street woes versus online success has been exposed recently with the disappointing performance reported by ASOS. The share price tumbling was as a result of being forced to slash prices to mimic its rivals with the obvious implications for profitability.

Meanwhile, store closures have become the norm alongside the replacement of people with technology with 80,000 jobs lost in the first half of 2018. As Mike Ashley puts it in his inimitable style, retailers face being “smashed to pieces”.

So, what can retailers do? The belief that more technology instore is the answer has been exposed by recent consumer research we commissioned. Our study found that 81 percent of UK shoppers claim the personal touch has disappeared from retail customer service in modern Britain, with almost a third (32 percent) blaming an over reliance on technology for this decline.

While the retail media gets very excited about the potential of new technology like smart mirrors, our research showed just 21 percent of consumers want them and only nine percent welcoming robot assistants.

Customers are suspicious about why new technology is constantly being deployed, with 50 percent thinking it is because retailers want to save money and 49 percent to employ less staff. Only 22 percent think they are using technology to create a better Customer Experience.

When asked what makes a great shopping experience, 49 percent of those said it was down to having good staff, staff that know the products (49 percent) and that go the extra mile (47 percent). Despite retailer addiction to discounting, promotional offers were only favoured by 34 percent.

The customer focus and experience is a well-oiled John Lewis strategy, and it is no coincidence that they have been able to keep their head above the water, and in December 2018 reported strong sales amidst a poor picture for other retailers. John Lewis reported a 4.5 percent year-on-year increase in sales in final weeks of 2018.

Another interesting success story is Angling Direct. The fishing retailer reported a 31.5 percent increase in sales to £14.6m and record Black Friday trading. Chief executive Darren Bailey has emphasised their continued investment in its stores and overall Customer Experience. As he put it in a recent interview: “Customers want specialist service and advice, and you can’t get that from Amazon.”

Our survey backs this up, with a third of Brits stating that the personal touch is more likely to encourage them to make a repeat purchase, and more than a fifth (22 percent) saying they always spend more money in a shop if they are served by a good assistant. Coupled with this, over a third (34 percent) of shoppers stated that a poor experience has driven them to buy from another retailer – not great in the current climate as retailers need to hold onto every customer.

There’s a clear picture emerging for the future of brick and mortar retailing in the UK – customers are looking for expertise and customer service rather than just a strategy of following the herd discounting. So retailers need to take heed: employ great people and train them well so that they genuinely care about the customers and the products they are  selling; don’t rely on new technology to reverse your fortunes; create a retail experience that’s the best it can be in every store not just flagship stores so create a model that can sustain this strategy and restore the pride in our retail stores in 2019.


Daniel Todaro

Daniel Todaro

Daniel Todaro is the MD of Gekko Field Marketing.




Inform. Inspire. Include.
A free way to improve your business.

Customer Experience Magazine is the online magazine packed full of industry news, blogs, features, reports, case studies, video bites and international stories all focusing on customer experience.


CONTACT US

CALL US ANYTIME



Contact Information

For article submissions:
Editor
Paul Ainsworth
editorial@cxm.co.uk

For general inquiries, advertising and partnership information:
advertising@cxm.co.uk
Tel: 0207 1932 428

For Masterclass enquiries:
antonija@cxm.co.uk
Tel: 0207 1937 483

Customer Experience Magazine Limited
Acacia Farm, Lower Road,
Royston, Herts, SG8 0EE
Company number: 7511106

JOBS IN CUSTOMER SUPPORT


Newsletter