Opinion: Six things retailers must do in 2016 to win over consumers

Convenience and value

Consumers will continue to vote with their feet and shop with retailers who can offer them real convenience – rapid delivery, multichannel services, curated content tailored to their likes and wants, mission-based solutions and an easy shopping experience.

As lives become ever more frantic and choice proliferates, consumers will tune out retailers who struggle to step up to the plate and meet customers on their terms.

As consumers’ expectations rise, retailers will need to focus on the real drivers of value for their customers.

Data-value exchange

There will be an increasing awareness among customers of the connection between the data retailers hold on them and their behaviour, and the service/experience they receive as a result.

So those looking to use first-party data to deliver meaningful and effective marketing and media campaigns will need to start a transparent conversation with consumers to define the value equation between improving the brand experience and protecting consumers’ privacy.

There will be companies that are set up to deliver on these customer expectations today and those that are still on the journey.

Those caught in the middle ground – who capture data and use it ineffectively (or worse still, lose it) – will struggle and find themselves with under-utilised technology investments, less able to compete in the low price arena of the big data ‘refuseniks’ (those who champion opting out of the data game altogether with a privacy-led or no-gimmick angle).

Diversity and cultural fusion

Rising levels of migration are creating a new set of customer needs and retailers will need to ensure they are best placed to meet these needs.

“With cultural traditions being exported across the world, opportunities are being created for brands and retailers”

With cultural traditions being exported across the world, opportunities are being created for brands and retailers who are willing to adapt their business models to consumers’ changing habits and preferences.

With Diwali, Singles’ Day, Holi and Oktoberfest all becoming significant drivers of revenue far beyond their country of origin, it’s clear that cultural fusion is shaping shopper habits.

Targeting the 55+

Meeting the realities of serving the baby boomers – how to best flex ranges, shopping experiences and formats and channels to better suit this diverse and not well-understood customer group.

“Retailers will need to focus their efforts on targeting the 55+ demographic, which wields a huge spending power”

As people live longer than ever before, retailers will need to focus their efforts on targeting the 55+ demographic, which wields a huge spending power.

Technology

Increased use of technology in store will help retailers enhance the shopping experience for customers (price comparison, product locations, recipes), while enabling them to use that additional data generated to increase relevancy for customers and improve targeting capabilities.

It could well be that in 2016 there will be a breakthrough of a really useful mobile shopping app offered by a top-tier retailer.

Smarter pricing and rewards

The desire to rein in promotions is high but very few retailers are strong in this area so we’ll see a polarisation over the next two to three years of those who make the right choices and those who don’t – with big financial consequences.

More retailers will adopt personalised pricing and promotions and incorporate this into their mainstream promotional plans.

As the ‘race to the bottom’ continues to be the norm, retailers will look for ways to manage their pricing and promotional decisions more in line with their marketing groups, for instance, focusing less on product and more on the customer.

• Nicola Doidge is head of innovation and technology at Dunnhumby