Retailers are operating in an era when, thanks to the internet, customers can check prices at a glance. Were economics really as straightforward as some of the simplest models, this ought to produce just one outcome: all customers would flock to the retailer offering the keenest price on a particular item.
The fact is that consumers, which is to say all and any of us, don’t just buy on price, and that’s not just because we don’t have the time to do the research. Rather, many factors are at play when we make purchase decisions. Do we trust and like a particular retailer? Does the retailer offer a delivery or pick-up option that suits us? If we’re on the high street, is it a good experience going into one of the retailer’s stores? If we need advice, is the retailer able to provide detailed, and credible, information about a product?
In short, every purchase arises from a complex interplay of factors. Price will always be important, but it’s not the only factor – or even the most important factor. It’s one of a number of ideas important to the wider notion of providing a great customer experience.
This in turn raises a question, how should retailers go about working out which factors are most important? In truth, successful companies probably already have this information at hand. John Lewis partners instinctively know that customer service is at least as important in the department store’s offering as the company’s price promise, embodied in its “never knowingly undersold” tagline.
Nevertheless, the same ideas recur at successful retailers. Websites should be quick to load. Information should be consistent across channels. Sales assistants should be polite and knowledgeable. Most of all, service should be personalised, built around us as customers. None of this is easy to achieve but, as we’ve seen in this Dimension Report, Top500 retailers are finding innovative approaches here.