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GUEST COMMENT A challenging week for UK retail

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by Mansoor Malik

Following the Christmas frenzy, January is always a difficult month for UK retailers. So far 2013 has proved no exception and in the past two weeks we’ve seen several high street names – Jessops, HMV and Blockbusters to name a few – go into administration.

It’s difficult and uncomfortable to hear the news of their demise and the resulting job losses, but one has to ask the question of why this has happened to them and inevitably ask what could have been done to prevent it occurring – and from happening to other retailers moving forwards.

So far the finger has been firmly pointed at hot competition from the online space and in these cases it’s probably true. Most of these outlets haven’t revamped their stores for some time and they certainly didn’t appear to take advantage of the online opportunities at their fingertips, a real shame.

The shift in focus to online shopping in the UK was tremendous last year and Christmas 2012 saw 57% of UK shoppers carrying out their shopping online. It was a huge opportunity for retailers to gain new customers, reward existing ones and provide a great experience – but clearly not everyone delivered. In fact the results of our Christmas research report demonstrated this with improvements in customer satisfaction across the top 40 UK online retailers appearing sluggish and minimal growth (just one percent) in aggregate scores. In short in showed that every single Top 40 online retailer could be more effective and competitive if they focussed on improving the customer experience.

The online space is clearly an area that no retailer can afford to overlook or not prioritise. In fact, the IMRG has already forecast that the online retail market will grow by 12 percent in 2013, with consumers spending £87bn online. It is going to be more important than ever before to make sure that customers have a great experience – both instore and online.

Any retailer registering an average or low score are risking loyalty, recommendations, sales, and market share. By this measure, 29 of the UK top 40 retailers are already underperforming. Smaller retailers already have to fight hard against the bigger guys, but if they focus on getting customer satisfaction right, this could be a good way to pick up new business, encourage loyalty and repeat business.

So what can retailers do to improve the customer experience and stay competitive this year?

My recommendation would be to optimise store space (if you use that channel) and create more of an experience than a simple box shift approach. Increasingly stores are becoming like showcases for products so get creative in how you sell to customers – give them ideas and inspire them. In short, get even closer to the customer. For the online channel, listen to customers and be clever in your approach with well timed, relevant and non-invasive actionable questions. Once they see the changes you’ve made to the site as a result, they’ll be more likely to help out again.

Also make sure your sites are mobile and tablet-optimised. This year is going to see growth across these channels go through the roof and retailers need to not only have t and m-sites etc., but an actual digital strategy for these shoppers. Having an “app” isn’t going to be enough. You’ll need to be able to pull, analyse and act on data coming from the devices, otherwise you’ll fail to fulfil the high expectations of customers, and lose the potential to deliver a better, more engaging experience.

By monitoring and understanding consumer behaviour and checking customer satisfaction levels with the buying experience, retailers can work to continually improve the purchase journey until they get it just right.

In the ever-competitive year ahead, customers will have a plethora of choices about how to engage with you – or not. You’ll do well to remember that real insight comes from measuring what you cannot see; it comes from understanding the customer.

Mansoor Malik is managing director of ForeSee.

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