A new report claims that only 40% of retailers are talking to their customers to understand their needs.
A new report ‘Integrating the Retail Supply Chain’ from LCP Consulting finds that only 40% of retailers are talking to customers about their needs, despite three-quarters of retailers knowing that they need to focus on their customers to drive profitability.
Fatface, Aldi and The White Company were some of the companies included in the report to understand how retailers are interacting with customers.
Customer expectations around service and delivery are higher than ever. The report warned retailers of this and that they need to understand their customers’ needs in an ever-demanding retail environment.
Infrastructure Director at Fat Face, Simon Ratcliffe commented on this saying ‘Customer expectations have been evolving at a rapid pace and you must keep up with these changes, it is important for retailers to genuinely understand their customer expectations, or the customers they are trying to capture. At Fat Face, we are just as interested in the 85% who don’t buy from us.’
Ratcliffe said a very important factor to its brand perception is the retailers service around returns ‘A poor service has a significant impact on the proposition of your business. Your returns service speed is very important to the customer (i.e. giving people their money back). Our view is that store returns generates additional footfall and a chance of selling them something else.’
Retail partner at LCP Consulting, Stuart Higgins added ‘How can retailers hope to truly understand their customer needs and expectations, and respond with appropriate service models, if they are developing their entire customer understanding without looking outside the business’ existing knowledge base? There is a major risk in defining a customer offering based on an internal perspective of the customer, as it then becomes a self-fulfilling prophecy.’
Stepping forth from the crowd
The strategy of matching the service offer of their competitors is being stepped away from. Pioneers in retail technology are twice as likely to deeply analyse customers data (76%), compared to followers of technology (32%).
Ratcliffe said ‘There are concerns at an industry level about fulfilment and there is concern about offering so many of these services at a loss. I doubt whether that tide can be pushed back as the base hygiene standards have risen. That’s just evolution, that’s how it is now – what is to change is to get smarter on the choices offered and to lower the cost of delivery. We are product differentiated – your product had better be good. Make your strategic choice – don’t be all things to all people.’
COO at The White Company, Phil Clarke insisted that the retailer thinks of technology hand-in-hand with its customers.
‘Retailers have to be very focussed on their technology for today and into the future, customers are increasingly demanding of the delivery to their homes. When we think of technology, we first think of what is important to our customers – now and in the future.’