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GUEST COMMENT Why establishing an online presence is not always the answer

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In the wake of the disruption that this year has brought, retailers have been left scrambling to keep pace with customer demands. For many, this has involved a revamp or the introduction of online services, to meet the demands and needs of customers who choose or are prevented from leaving their home. This has seen online-only retailers such as Ocado experience a rocketing increase in sales and valuation. It is easy then to see why other retailers have looked to follow suit. 

However, despite footfall declining on the highstreet, shifting to online may not be the right answer for all retailers. Due to the pandemic being in effect, consumers have been much more open to trying new brands and experiences. In fact, according to McKinsey, more than 75% of consumers have tried new brands, places to shop or methods of shopping during the pandemic. This is not the time for retailers to stray too far from their core brand proposition and jump on the latest trend without carefully thinking through the impact. Making the choice now could see customers permanently switch to competitors as they explore new experience. 

Instead, businesses need to be carefully assessing what exactly it is their customers want from them and how best they can meet them where they want to be met. To illustrate this, consider the recent move from Lidl to dissolve its digital logistics arm and scrap the launch of its online grocery services. In this instance, Lidl, rather than implementing initiatives that may not have resonated with its customers, has focused on its brick-and-mortar business. This is where it sees its growth opportunity and where it can best deliver in giving customers exactly what they want – an efficient shopping experience and products at a low cost. 

The importance of delivering on what the customer wants

Lidl is leading the way when it comes to playing to its strengths and focusing on what its customers want. It is not alone either. The retailers that are succeeding in these difficult times, and are set to continue to do so, are those focused on putting the customer’s needs at the centre of their operations. At the very least this involves listening to the customer and delivering an experience that they want, not what you think they want. This is not to say that moving more online is wrong, it’s not. However, any move online should enable a retailer to meet consumers needs and not be a reaction to the pandemic and other external influences. At a time where retailers cannot afford to lose customers, failing to implement or adapt initiatives to fit customers wants risks impacting the long term health of a business. 

Accessing customer wants goes further than moving online or offering a new loyalty scheme. For example, as revealed by EY Consulting, 57 percent of UK consumers are more likely to purchase from companies that are actively supporting the community. By keeping in tune with the wants, needs and expectations of consumers, retailers can easily see what is working well and begin implementing the changes accordingly.

To do this though, retailers need to understand their customers in great depth and have a connected view of them across all the channels they use to interact with the business. This means having the right means to collect, process and analyse customer data that can give valuable information on their behaviours. Armed with the right insights, retailers can evolve their services to align with consumer demand and deliver an experience the customer wants. 

Adapting for the now and the future 

Using data and insights then should not look to take a retailer away from its core strength and brand position, but actually, reinforce what it stands for and why customers continue to return. In the same way that Lidl understood that its core customer demographic was not interested in online shopping and instead went to the retailer for a clean, easy to use service with products priced at a lower cost. Dropping its online shopping approach should not be seen as a failure but as a success in it understanding its customers. This too is not to say that it may not want to reconsider offering online deliveries at a later date as customer demands continue to evolve. Retailers like Lidl that seamlessly manage, integrate and meet their customers where they want to be met will be the ones that achieve long-term sustainable success. 

This year and the months to come are a critical time for retailers. With uncertainty constantly looming and change happening at an unparalleled rate, it has never been more important to be in tune with what customers want. The opportunity is there for retailers to thrive. However, it will require businesses to act on tangible consumer insights and have a readiness to quickly adapt operations. Crucially, retailers must maintain an interconnected communication to customers on the business’ principles and strategies. Retailers that invest now in understanding what their customers want and marry their offerings to meet these needs are the ones that will set themselves up for success, now and into the future.


Adalsteinn Valdimarsson, CEO, K3 Business Technologies

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