A new breed of hyper-demanding shopper is emerging with redefined notions of value and loyalty – and tough expectations – for anytime and anywhere retail experiences, according to retail consultant TCC. Swap consumer for shopper and hospitality for retail and the message remains the same across two sectors that are increasingly merging.
The new research commissioned by TCC in partnership with Planet Retail found that global demographic shifts and technological developments are combining to shape a new breed of post-recession consumer with an ‘always on’ mentality.
In addition, technology has opened up new purchasing sweet spots at periods of the day – such as commuting or late at night – which were traditionally retail ‘dark spots’. Location is hardly a sales barrier at all anymore. Note the launch earlier this year of Marks & Spencer’s (M&S) first standalone café at its headquarters in London’s Paddington, complete with made-to-order hot breakfast rolls, muffins, cakes and in-house baked pastries.
The research also underlined that ageing communities, urbanisation and increasing single-person households has led to a rise in smaller store formats, fuelled by demand for simpler, convenient shopping for carrying out time-pressured, frequent shopping trips, with smaller basket sizes. This is being mirrored through the rise of the fast-casual sector and the need for established operators to contemplate smaller, more fleet-of-foot versions of their traditional formats.
It has also resulted in redefined notions of value and complete digital transparency on price and experience so, now, shoppers/consumers are cherry picking between stores and holding back their loyalty.
TCC’s CEO Michael Ioakimides says: “The shopper is constantly evolving, both in terms of demographics and lifestyles, and it has never been more important for the retail industry to take notice and adapt. While retailers are honing in on certain demographic shifts – with small formats and online increasingly a point of focus – the sector must recognise the wider trend at play. Shoppers are now ‘always on’ – with high demands and expectations to shop ‘anytime, anywhere’. The successful retailers of the future will be those who adapt to this new marketplace and adopt an integrated multi-channel strategy.”
Operators are constantly striving to understand what consumers are truly motivated by, beyond just the price tag. In such a competitive environment, the most successful are those that can satisfy the key elements with a range of initiatives from building brand equity, creating an emotional connection to providing customer service and quality and offering a sense of exclusivity.
These touch points are now the least that is expected from that most dangerous and fickle of beasts. Consumers are more empowered than ever.They used to be talked at, now they are being talked to, soon companies will need to get used to them talking back and acting instantly on that feedback.
Latest health check
This Thursday will see Fuller’s, Marston’s and Mitchells & Butlers (M&B) provide quarterly trading updates, and while the first two are sure to provide interest for commentators and shareholders alike, it will be the later that inevitably garners the most interest.
Over six months on from his appointment as its new chief executive, Alistair Darby has now passed through his grace period and the market will look for further signs of the former Marston’s man placing his stamp on the UK’s leading food-led operator.
As analyst Geof Collyer at Deutsche Bank says: “It is now essential that the new CEO completes the significant organisational restructuring and reengineering of the business. There is much work to do, not least in returning M&B towards the top of the peer group performance league table, a position from which it has been progressively slipping over the past two years or so. We are now comfortably into the second year of this cultural reengineering programme and evidence of clear progress should be starting to emerge.”
Indicators on whether it will cut back on new site development to concentrate on optimising returns from its existing c1,600-strong estate will be sought, as will further progress on the bedding down of its new ‘ways of working’.
This, added to a settled boardroom, should underpin Darby’s eventual goal for the business of breaking out of the pack and back to its former role of market frontrunner.
