Bill MacLeod, PwC Newcastle office senior partner, looks at the challenges and opportunities facing retailers in the North East.
In PwC’s most recent ‘Total Retail’ consumer research, which looks at what shoppers want from retailers drawing out key shopping behaviours and trends, it was interesting to see how uncertain political times have led to UK consumers becoming more reliant on the retailers they know. Trust is now, for the first time ever, the second most important reason (after price) for choosing to shop with a retailer.
There’s also further concern shown on how Brexit could impact consumer spending habits with over 20% of consumers in the North East worried about the impact of Brexit on their spending plans over the next 12 months, whilst 56% also worry about their lack of disposable income.
Our survey looked at the views of more than 1,000 UK shoppers and interestingly revealed that brand loyalty across the North East region remains a priority with almost two-thirds stating that they remain loyal shoppers who know which brands and products they buy most often.
So whilst there will certainly be a number of ongoing challenges for retailers over the next year there will also be opportunities too providing they maximise brand loyalty whilst at the same time remaining competitive.
Price still remains the most important factor for determining customer loyalty with 61% of shoppers in the North East stating that they return to a retailer because the prices are competitive. That said other important reasons are that consumers trust in the brand itself with six in ten North East consumers confirming they only shop with companies they trust, particularly when shopping online to reduce any online security risk.
There’s no doubt that 2018 will be a crucial year for retailers, with the North East no exception, with the combination of price inflation on goods and groceries will mean that brand loyalty will play a more significant role than ever. However, with prices on the up and less disposable income available to the average UK consumer as a result, retailers will need to be versatile in order to keep their customers from looking for cheaper options elsewhere - customer experience and loyalty will be the key.
One thing that has changed and will continue to do so is the fact that consumers now have more choice than ever before, both in terms of the goods and products available as well as how they purchase those goods. Retailers too are constantly evolving with a bigger focus on online platforms and making products more accessible to the customers including choice of how, where and when goods are delivered.
Clearly the rise of digital, the ease at which consumers can purchase goods online, via an app, tablet or smartphone or wearable device as well as our increasing reliance on Amazon (87% of North East shoppers use the site) is changing the way we shop. However, something that still remains equally important to consumers is the value that shoppers in the North East continue to place on in-store experience, with the number one in-store attribute being shop staff with a deep knowledge of their product range.
Consequently as we look forward retailers need to create a retail experience that is both simple, streamlined yet maintains a human touch, blending the best of technological advances with helpful and expert staff both in-store and online. Creating the right balance and building on the loyalty of their existing customers will help to ensure that retailers across the region are best placed to take advantage of future opportunities.