That was the theme of a discussion hosted by MT and sponsored by Accenture at Cass business school on Tuesday. ‘In a multiplatform world, firms need to be tightly integrated. If prices in the store don’t match its price online, then customers aren’t going to be happy’, said Visa Europe’s managing director for growth and emerging markets, Mark Antipof.
As the last year has shown, the high street is taking a battering. Game Group is the latest retailer to announce it’s on the brink of administration, as it juggles sliding sales across its 600 UK stores and higher rents. If Game does go into administration, it’ll follow in the footsteps of high street brands Peacocks, La Senza and Past Times, to name a few.
Customers shunning high street goods for cheaper alternatives online is a problem many retailers are citing as reasons for their downfall. So how do you encourage customers to spend? Alan Giles, chairman of lifestyle retailer Fat Face and former CEO of HMV, agreed that retailers need to be wary about charging more in-store: ‘Smart phones are giving consumers the most informed shopping experience they’ve ever had. They offer complete price transparency’.
It’s an experience many consumers are becoming familiar with now – they’ll find an item in the store, but check whether they can find it cheaper online before buying. Figures from the Office for National Statistics show non-store retailing, primarily made up of internet sales, grew 13.3% in January compared to a year ago. That’s a much sharper growth than UK retail sales overall, which grew by 2% year on year.
Dan Wagner, the internet entrepreneur who founded M.A.I.D in 1984 which he sold for £330m to Thomson Reuters almost 20 years later, warned it’s not always the price of goods that’s putting people off: ‘Many won’t go to their local store because of the price of parking, or the inconvenience of yellow lines’, he said. ‘So there are some wider problems that need to change’.
The greater choice for customers has led to a change in retailers’ behaviour. ‘Customers are becoming less loyal, so retailers have to work harder to keep them’, said Les Bayne, a senior executive at Accenture. ‘If a customer has a complaint handled well, they’re likely to go back’, agreed Vince Mitchell, professor of marketing at Cass Business School. And retailers are realising they need to tread carefully around customers. ‘Smart phones are becoming the remote control to people’s lives. If a customer isn’t happy, they’ll quickly let others know through social networks’, Mitchell added.
But if you’re on to a good product, Giles believes a high price won’t always put people off. ‘Great products will always trump value for money’, he said. ‘If it’s a really seductive product, then people will pay for it’.
Maybe retailers can learn something from Apple. The technology giant said today that pre-orders for the iPad 3 had already sold out, ahead of its release on 16 March. Clearly some consumers are happy to burn up to $829 (£659) on a gadget…
- MT hosted the discussion Customers in Control at Cass Business School. On the panel were:
Alan Giles, chairman, FatFace.
Dan Wagner, chief executive, Brightstation Ventures
Mark Antipof, managing director growth & emerging markets, Visa Europe
Vince Mitchell, professor of marketing, Cass Business School
Les Bayne, partner, Accenture UK & Ireland
Andrew Saunders, deputy editor, Management Today