September 23, 2019 / Director's View

Do Retailers Understand Their Consumers?

painted people

We were recently asked if retailers understand their customers. Considering consumer attitudes is essential to success when developing initiatives to help build direct and lasting consumer-brand relationships.

The customer is and should be at the centre of everything.

The best results in retail occur when experience and product selection are perfectly aligned with customer wants and needs. Of everything we have learned in retail in the last 35 years, insights about the customer are by far the most valuable.

When considering core demographics, listening is a key element; building strategies around what is heard has measurable success.

The most important questions are: ‘What does our customer want or need us to be?’ and then, ‘How do we deliver that in a way that cannot be challenged – by our direct competition or another channel?’ If you can answer these questions, you are giving people a reason to come into your store.

In London, Selfridges understand their customer intimately and build strategies around how often they come into the store and what brands they want to interact with, ensuring their expectations are met or exceeded on every visit. They are also not afraid to bet big on initiatives and their customer is happy to show them their appreciation when they do. Their recent Pat McGrath launch was a great example of this.

Boots’ mixed results from their new store format demonstrates that understanding your customers want and needs is only half of the challenge. Execution of a new store also has to be immaculate to draw new customers who are excited about the brand and products.

In Europe, Douglas has been brave enough to dramatically change their in-store model to react to customers wanting to discover new products and brands. The strategy was to take the traditional model of 80% well known established brands and 20% new and upcoming and flip to on its head so the focus was truly on discovery. This is paying off.

In the US, the best retailers are already thinking about what their customers will want tomorrow, even if they are satisfying their needs today.

Personalisation can play a role in customer relationship. It is just one part of understanding that the customer wants to be treated as an individual. On its own, it is not enough, but when an addition to strategically placed touch-points, it is a great way to create long-term engagement.

Loyalty schemes are a good opportunity to collect data to understand your customer. More often than not, the data is built on successful interactions. On their own, they leave big gaps, failing to answer crucial questions like ‘What do we know about the people who are not currently shopping with us?’ or, ‘What potential did we miss in this interaction?’.

Understanding consumer attitudes towards sustainability is shifting. Consumers are intrinsically looking for brands to do more than just tick boxes, choosing those that incorporate sustainable methods genuinely into their ethos and core values.

The customer’s ability to seek out and recognise integrity is constantly fine-tuning. Only retailers genuinely and authentically advocating sustainable means will reap the rewards offered by conscious generations.

Understanding customers is the best starting point to keep up with today and continue to engage with them tomorrow.

Successfully building initiatives around these understandings requires an ever-evolving methodology that combines constant research with experience, thoughtfulness and an ability to see and act upon what makes an offering both compelling and unique.

No matter the stage your business is in, we would love to talk about how we can support during the current and future stages of growth. Please contact team@sheridanandco.com to continue the conversation.

All the best,

Freddie.