Black Friday lands on 27th November this year and projected revenues are over £1 billion. In the run-up, more retailers are adopting aggressive discounting as a strategy in order to attract customers. The latest research from IRI Group has significant ramifications for retailers in the Midlands in the run-up to the all-important Christmas season. The findings show that over half (54.6 per cent) of items sold in the UK are sold in sales or as part of deals such as ‘buy one get on free’. Following on from dispiriting Consumer Confidence statistics in October, the picture is bleak for British retailers ahead of the crucial December period.
Consumers are increasingly using mobile and eCommerce channels in order to find the best deal, with retailers being forced to respond by ramping up the amount of sales or special deals on offer. This trend has been amplified by the fact that ‘mega-deal’ days such as Black Friday and Cyber Monday are beginning to have a greater impact and forcing retailers to adapt by offering ‘super sales’ in order to remain competitive.
Experts say that this trend is not the path to growth but rather will leave many retailers struggling to survive, unable to distinguish through a pricing strategy alone. The constant discounting of products is likely to further compound retailers post-Christmas struggles, continuing the trend of January bankruptcies from the last few years. Since 2013, over 150 have gone to the wall with figures expected to rise.
Instead of constant discount sales, the customer experience across a range of channels is the key to better engagement. The growth of mobile devices has meant that customers are able to research the cheapest option at the touch of a button, regardless of where they are. This in turn has meant that increasingly the mobile customer experience is becoming the critical factor in attracting high customer numbers. With mCommerce now accounting for 40 per cent of all online sales, the mobile is ‘the second shop front’, requiring retailers to focus on providing a unique customer experience to build customer loyalty.
Dan Wagner, veteran eCommerce expert and CEO and Founder of Powa Technologies says: “It is staggering that the vast majority of customers who walk into high street shops are still anonymous to businesses. Retailers have no idea who they are, what they need and how to appeal to them as individuals. An aggressive discounting strategy is not going to cut it – it’s not a path to survival and growth but to destruction. The future of the Midlands retail industry depends on forming a much deeper engagement with customers and this can only be done though data. Forward-thinking retailers are already relying on a wealth of in-depth customer information with every transaction, including age, gender and location of purchase, providing real-time geo-located insight into consumer behaviour. The ones that aren’t are simply being left behind.”
The rise in smartphone usage means that almost every customer on the high street today can comparison shop in seconds, so price-wars are a strategic dead-end. However, smart retailers regard the ability to connect to customers through smart devices as an incredible opportunity to actively connect with them on an experiential level. By using PowaTag, shoppers have the power to complete transactions in seconds anytime and anywhere, utilising triggers including scanning print material, Bluetooth beacons, audio tags and social media.
Dan continues: “Using the deep-dive data generated by these digital customer interactions, retailers can move way beyond large impersonal campaigns and reach each one of their customers on an individual level. Retailers finally have the ability to bring the science of ROI to offline advertising methods such as billboards and newspaper adverts as captured data is instantly updated when a product is purchased. This allows for a whole range of engagement opportunities such as personalisation, timely cross- and up-selling opportunities and location-based promotions. The current status quo, where retailers are surviving on scraps of useful customer engagement data regarding the effectiveness or impact of their multi-million pound marketing campaigns is untenable. For any business looking to survive in such an intensely competitive market, getting to grips with these new data sources is essential.”