16 Jan 2019
Overreliance on Tech and Discounts are no Substitute for Customer Experience
Looking ahead to some challenging conditions in 2019, retailers will need to address two flawed strategies: discounting and an over-reliance on technology at the expense of customer service.
What used to be one off days like Black Friday and Cyber Monday have become a month-long slog with retailers falling over themselves to better their rivals’ discounting. This approach has been jet fuelled by continuing uncertainty over Brexit, with bigger and earlier discounting, tempting cautious consumers.
However, the race to the bottom leaves no one at the top. Certainly, the simplistic narrative of high street woes versus online success has been exposed recently with the disappointing performance reported by ASOS. The share price tumbling was as a result of being forced to slash prices to mimic its rivals with the obvious implications for profitability.
Meanwhile, store closures have become the norm alongside the replacement of people with technology with 80,000 jobs lost in the first half of 2018. As Mike Ashley puts it in his inimitable style, retailers face being “smashed to pieces”.
So, what can retailers do? The belief that more technology instore is the answer has been exposed by recent consumer research we commissioned. Our study found that 81 percent of UK shoppers claim the personal touch has disappeared from retail customer service in modern Britain, with almost a third (32 percent) blaming an over reliance on technology for this decline.
While the retail media gets very excited about the potential of new technology like smart mirrors, our research showed just 21 percent of consumers want them and only nine percent welcoming robot assistants.
Customers are suspicious about why new technology is constantly being deployed, with 50 percent thinking it is because retailers want to save money and 49 percent to employ less staff. Only 22 percent think they are using technology to create a better Customer Experience.
When asked what makes a great shopping experience, 49 percent of those said it was down to having good staff, staff that know the products (49 percent) and that go the extra mile (47 percent). Despite retailer addiction to discounting, promotional offers were only favoured by 34 percent.
The customer focus and experience is a well-oiled John Lewis strategy, and it is no coincidence that they have been able to keep their head above the water, and in December 2018 reported strong sales amidst a poor picture for other retailers. John Lewis reported a 4.5 percent year-on-year increase in sales in final weeks of 2018.
To read the full article visit Customer Experience Magazine.
For more information on Gekko's recent 'Service not Sci-Fi' study please visit our Research Page.