We are not all price-driven promotion addicts
Looking back on Black Friday one of the conclusions to be drawn would be that the UK shopper has become deal obsessed and that retail is now just about promotions and the cheapest prices.
But let’s step back and consider what happened over the whole of the Christmas period. The reality is that Black Friday simply re-shaped the festive period and that sales and profitability from some of the larger players improved year-on-year despite this promo-driven US import inserting itself into the Christmas run-in.
This does not paint a picture of a sector reliant on just cheap pricing. The likes of Dixons planned ahead of Black Friday to make relevant ‘discountable’ products available and they ultimately blitzed it over the full festive period.
If retail was just about low prices then Ryanair would have been winning out with its previous price-focused strategy. As it is the budget airline has changed its stance in order to fight against more customer-friendly rivals like easyJet.
It has adopted a more service-driven approach offering more allocated seating, introducing Business Plus, improving its website, not charging for its app, and generally being nice to people.
This has helped turn around its fortunes. It recently announced that fares up 5% and a traffic increase of 4% had helped it push up profitability by 32% – proving that a more service-based strategy has been bearing fruit. This is because as much as consumers like low prices and discounts they still want to be treated well and enjoy a good level of customer service.
The ‘Retail Insider Digital Retail Innovations Report’ (that Webloyalty sponsors) included many examples of initiatives and innovations that make life easier for the customer. In this digitally-focused age the customer is being asked to handle ever-more aspects of the shopping journey – such as creating their shopping list online, self-scanning goods in-store, using self service checkouts, and being available to receive goods when delivered to their home.
For this to work the various processes have to be made easy and painless for customers. When recently ordering online from Bathstore.com the delivery aspect was made very easy for me by being able to use a ‘Follow my Parcel’ app. And when I had to change the delivery date of the order Bathstore.com made it effortless.
At Webloyalty we were also impressed with the virtual design solutions that earned places in the report – including B&Q ‘Spaces’ for designing kitchens; the IKEA augmented reality app; and the DFS 3D room planning app. They each take pain out of a process that can be a time-consuming nightmare.
But don’t think that all digital solutions have to be high-tech game-changers. Take the Micksgarage.com photo delivery confirmation solution – it’s very simple and cost-efficient – that also took its place in the report.
Ahead of orders being despatched a photo is taken of the fully packaged box and sent to the customer within their despatch/order-tracking email. Having this visual aid has helped customers find and recover lost items thereby reducing the number of complaints to the call centre.
The Starbucks pre-order app is another great initiative as it removes the headache of having to queue for your coffee. Simply place your order and pay on your phone before dropping by your local branch to pick it up. Painless.
So while Black Friday has undoubtedly altered the landscape of promotions and marketing around the Christmas period it has not really made a difference to the growing appetite of shoppers for excellent customer service (increasingly enhanced by technology).
If you think retail is simply all about offering the lowest prices then I recommend you take a leaf out of the Ryanair book.
Guy Chiswick, Managing Director, Webloyalty Northern Europe