Retail Reflections: Buyers and sellers gear up for Christmas; What Amazon Can’t Do

Alan Monahan writes: I was on the way home from Harrogate when I realised that the sharp, stabbing pain in my lower back signalled that I would probably be forced to make a hasty return.

Confirmation came quickly. Stopping the car and fishing in my back pocket I found my hotel room key. Stupid boy! I had next expected to visit the spa town and Home & Gif in July 2019, not within the hour.

Don’t get me wrong, I enjoyed the show enormously – meeting up with old friends, chatting with buyers and sellers and doing my PR bit for a client.

As predicted in my last column, it was business as usual and everything about the town looked much the same. Okay, the sun may not have shone as often as I had forecast – in fact, its appearance was punctuated by thundery showers. However, on Sunday retailers were moaning that the halls were ‘too bloody hot’. No change there then! But this was a great excuse to sit on the grass and enjoy the weather or cool off in front of the TV, watching tennis from Wimbledon or the World Cup.

Of course footfall suffered on the Sunday, but it picked up the next day. Most of the suppliers I spoke to were philosophical about a challenging first six months of the year – ‘It is what it is’ – and were geared up to make the most of what was left of 2018 which, of course, includes Christmas, the peak selling season for retailers.

When I eventually got home from the show I ploughed through my emails, deleting more than I opened. But I always have time for information from Salmon, the Wunderman Commerce company, whose investigations are more often than not a ‘must read’.

Just over a year ago it undertook a global study, Buying Tomorrow, asking consumers around the world what compels and connects them. It found that customer loyalty is shifting away from brand to service as demand for digital services grows. It seems that the desire to embrace technology in general is matched by a desire to utilise the power of tech for shopping.

For this year’s report, Future Shopper: 2018 and Beyond, Salmon spoke to 3,516 UK and US consumers who had shopped online at least once in the last month to understand how people shop online today – and what this means for shopping tomorrow.

They wanted to find out the answer to the billion dollar question all retailers and brands must face: what matters most to consumers?

In recent years there’s been a particular shift in what buyers demand from a shopping experience and Salmon believe it is now significant that, online, nearly two-thirds of respondents (64%) rate price as very important, with over half (54%) citing free delivery, which puts both ahead of brand (39%). It says that the traditional idea of brand and product above everything else is being eroded, and these findings would have been unheard of only five years ago.

People’s desire for a bargain sees them religiously research prices before they buy: 80% of Salmon respondents said they check Amazon reviews and pricing even when they are shopping on other sites, or physically standing on a shop floor. It seems that Amazon has become the benchmark for competitive pricing that all other retailers have to match.

And when it comes to what features make for an ‘excellent online shopping experience’, shoppers selected free shipping (55%) and fast delivery (50%) as the two most important features.

But while delivery has always been important to online shoppers, it has never been expected to be so fast. ‘This is what is known as the Amazon Prime Effect,’ says Salmon. ‘In offering super-fast delivery as standard, Amazon has shaped consumer expectations so that long delivery times are no longer normal or even acceptable.’

Its research clearly highlighted this: 22% expect same-day delivery (within 12 hours); 43% expect delivery within 24 hours, and only 13% of people find a delivery promise of three days acceptable.

‘The impact of Amazon-style marketplaces is evident, particularly as it is conditioning consumers to find and buy all their products from one source. Three-quarters of respondents told us they are excited about being able to order all their goods through one online retailer – a possibility only brought into the mainstream by Amazon.’

Amazon is increasingly the shoppers’ site of choice. It accounts for 52% of total online spend in the US, and 35% in the UK.

But, as Salmon says, it’s valuable to understand what it is that Amazon doesn’t do so well, namely traditional loyalty programmes and an exciting brand experience and service, as this is the space where other retailers and brands can thrive. More and more retailers are talking about WACD – or What Amazon Can’t Do.

According to David Dalziel, creative director of Dalziel & Pow, an independent agency which creates brands, the product is no longer the centre of the store proposition. He says that smart retailers are slowing and humanising the store experience by creating ‘homes for home’ – sanctuaries and clubs with diverse services, where customers wish to belong.

Those of you with smaller shops would find it difficult to adapt to that extent, but you will know that finding that sweet spot to maximise sales and differentiate yourself has never been so important if you are to survive and thrive.