Retail Reflections: tricky times ahead and tips for retailers

 

Alan Monahan writes: Following publication of the latest Consumer Price Inflation figures, the British Retail Consortium predicts that retailers are in for “a tricky few months”.

 

Data from the Office for National Statistics shows that consumers in the UK faced rising inflation in May, while Labour Market Statistics reveal a fall in total earnings in the three months to April. The net result is a “lighter wallet for the British shopper”.

The BRC points out that last month inflation accelerated to a growth rate of 2.1% on May 2016. Food prices rose at their fastest rate since January 2014. Cost increases are also beginning to creep through, with the sharp deterioration in the value of sterling remaining the “culprit” behind some of these price rises.

Ever more hedging contracts, made before the devaluation, are running to their end as the year grows older, while stock bought by retailers needs to be refreshed – at new, inflated prices. All of which helps to explain the slowdown in retail sales and discretionary spending. The BRC calls it “a worrying picture”. It is.

However, retailers know that if they are to survive and thrive they must buy new product. And once it’s delivered, the job is then to persuade shoppers to buy it.

Save The High Street – the free-to-join industry-wide movement for a stronger high street – has been asking industry leaders and shopkeepers from its Retailer Advisory Board what makes a good in-store experience – one that delights local people and can’t be replicated online.

They believe that the number one factor in gaining shopper loyalty is “reduction of customer effort”: 77% of consumers say that “valuing their time” is the most important thing retailers can do to provide them with a good service.

Some 62% of businesses pointed out that customers spend more time in their shop if WiFi access is offered, with 50% of shoppers spending more money as a result.

Among its favourite ‘by the retailer, for the retailer’ recommendations you may wish to consider is focusing on a “delightful” and not just a “good enough” customer service.  “And be helpful, say, ‘Hi, how is your day? What brought you in-store. What are you looking for?’ And keep track of the responses.”

I’d be surprised if you’re not already doing some of the following, but Save The High Street also suggests creating an engaging window display to draw customers inside and also offering tea, coffee, wine and sweets.

It goes on: “Post a sign in the window telling customers why they should come into the shop. Host evening events; explore hosting pop ups in-store and collaborating with other shops/designers/artists in the community.”

Other recommendations include going mobile with your point of sale; offering contactless payment options, and the creation of a “sensory experience”, from visual to audio – even using scents.

Each week SaveTheHighStreet.org will be adding recommendations from independent shops and industry leaders.

Mike Cherry, national chairman at the Federation of Small Businesses, welcomed the emphasis in the Queen’s Speech on a pro-business Brexit, but believed that opportunities for vital reforms to domestic measures were missed.

He’s right, of course, but I’d be surprised if he really thought that issues such as reform of the business rates system and changes to corporate governance – to stop big companies badly treating their small business suppliers and contractors – would, after the events of recent weeks, get onto the agenda this time around.

However,  I am pleased he said that the FSB will be watching to see that legislation to reduce motor insurance premiums and energy prices also applies to microbusinesses, “which struggle just as much as consumers with their bills”.