Mothercare’s collapse into administration in the UK and M&S’s poor profit performance – once again let down by clothes and homewares – are both evidence of the tough market traditional retailers are forced to operate in. And part of that complexity comes down to changing ways shoppers want to shop.
A study out this week from Criteo, which looked at the shopping habits of customers across EMEA, finds that shoppers are looking for price, promotion and discounting when they are choosing what to buy – and they are also wanting that to come with a side order of ethics.
In short, shoppers are choosing brands that ‘share their core values’, offer some sort of green credentials and which offer money off. A tall order.
Couple this with today’s youngsters increasingly turning against throw-away fast fashion and looking at pre-loved clothes – again at a good price and with fast delivery – and the complexity of the task at hand becomes clearer.
In fact, in light of these changes the problems at M&S and the failure of Mothercare start to look if not inevitable, but not that surprising.
We have long seen shoppers shifting to online and mobile, as well as making the sales funnel more complex. We have also had to contend with a race to the bottom on price and a drive for fast delivery and endless stock. Discounting has long been a problem and now, with Black Friday once again around the corner, something that hits retailers harder and harder.
Add in that shoppers demands are pulling in two opposite directions – cheap but ethical – and things are really challenging.
So what can be done about it?
Ask technology providers and their answer is, of course, AI and better use of the data that you have to predict what shoppers are going to do. This, of course, will help, but more than that retailers need to be much more agile full stop. The tactics they employ around Black Friday and the run up to Christmas need to be extended throughout the year. Many of the tropes of the ‘new consumer’ are the same as those around the peak season: discounts, promotions and brand awareness.
This fundamentally changes retail: rather than gearing up to Christmas, retailers need to be on it all year round – and that takes a lot more than just AI.