We’re all familiar with the saying “there’s no such thing as bad publicity”. While the idea that, whether positive or negative, no publicity can do harm might ring true in certain industries or with certain brands, when it comes to the retail channel, having consumers on-side is essential.
However, in this day and age, it is becoming increasingly difficult to stand out amongst the crowded marketplace in the first place, let alone offer up services impactful enough to convince shoppers to spread positive messages about your brand.
A recent Cybera survey conducted by RetailEXPO 2019 found that offering a differentiated customer experience (31%) and increasing footfall (28%) are the biggest challenges for retailers.
Cybera spoke to 150 retail professionals for the survey, finding that retailers are well aware of the need to positively differentiate themselves, with 83% of respondents citing that delivering an enhanced in-store customer experience is very important.
Cybera says the key to addressing all these new challenges is additional applications and services, the majority of which will rely on secure, stable, and scalable network technology. However, nearly one quarter (23%) of the respondents have not introduced additional services to their stores in the past 12 months.
The primary inhibitors included cost – 25% said they thought it would be too expensive – followed by IT security concerns (19%) and a belief that their network would not support additional applications (14%). Moreover, many retailers noted the ever-evolving regulatory landscape – including GDPR, PCI, and the upcoming PSD2 – as an added distraction. Nearly half (47%) said they were concerned about new regulatory demands, admitting it was time to review their technology and processes.
“Retail technology and customer demands are constantly changing, but one thing that will always be critical is customer experience. The growth of IoT in retail is staggering and it threatens the ability to deliver a consistent, high-quality customer experience. All of these network-enabled devices are disparate, which means separate management and requirements,” explains Cybera SVP and GM EMEA Hubert da Costa.
“This IoT growth is challenging for retailers – many of whom operate remote, smaller-footprint sites managed by a staff with limited IT expertise. The solution is to leverage a network platform that enables them to deliver these new breakthrough apps and services quickly, easily, and without compromising their security.”
So what are the repercussions of failing to get ahead of the game? Quite a lot, if you take into account a recent report from Adyen, which showed that poor customer experiences cost British retailers up to £102 billion in lost sales each year.
Nation of moaners
Retailers certainly don’t have an easy ride when it comes to getting UK consumers on-side, as a new report from retail operations platform Brightpearl shows. It suggests that Brits are becoming a “nation of complainers”, particularly when they have bad online shopping experiences.
The survey of 2,000 Brits found that almost a third of shoppers have left a negative review online, with nearly seven in 10 having done so in the last year. With the digital age enabling consumers to quickly take to social media or online review sites to share their anger or dissatisfaction, worryingly, Brightpearl found that 76% of those surveyed will also share a negative retail experience with someone else they know to warn them off a particular brand.
55% of Brits are yet to leave a negative review of a company online, but the same percentage regret missing out on the opportunity to air their grievances with the brand or retailer when they’ve had a poor shopping experience.
Derek O’Carroll, CEO of Brightpearl, commented: “Brits are famously awkward and averse to confrontation and complaining, but, with the rise of so many avenues for customer feedback, from online forms to social media, those habits appear to be changing.
“Consumers have started exercising their right to have a moan when they receive sub-par service – and brands need to start paying closer attention.”
“Retail technology and consumer demands are constantly changing, but one thing that will always be critical is customer experience” Hubert da Costa, Cybera
Brightpearl’s research reveals that online consumers are becoming more reliant on the feedback of other shoppers to support their decision making.
It shows that 46% of respondents regularly checking star ratings for online retailers before buying from them, and two in five consumers have been put off a brand or a retailer they might have shopped with by a single unfavourable review.
Retailers will be pleased to hear that there are some positive steps outlined in Brightpearl’s research too. It might be tempting to ignore negative reviews or not draw attention to them, but 30% of shoppers look more favourably on retailers who actively respond to negative reviews posted about their services online.
55% of shoppers say they would also be likely to spend more money with an online outlet which had ‘excellent’ reviews or star ratings. And Brits are willing to spend as much as 22% more with a brand or retailer which has received ‘mostly excellent’ reviews than one which has been reviewed less favourably.
On average, Brits want a brand or retailer to have a whopping 30 positive online reviews before they’d trust it enough to part with their cash. And anything rated below four out of five stars is generally considered negative by discerning consumers – with shoppers becoming highly dubious about handing over cash to any brand that has more than five negative reviews.
“From our research, it is clear that a positive review – or 30 – can make a huge difference in the choices consumers make when it comes to selecting a brand or retailer,” says O’Carroll.
“It is also important for retailers to be aware of the wide-ranging impact a negative review can have on their business, as well as understanding where those problems are coming from – whether it’s items not arriving on time or at all, to lack of delivery updates or cancelled purchases.
“Customers pay attention to middling and lower reviews, resulting in lost sales opportunities and potentially damaged reputation. The best approach to negative reviews is to identify and fix the issues that can lead to unhappy shopping experiences.”
“Consumers are promiscuous and unpredictable creatures, and demand brands to constantly be updating and changing to reflect current taste” Andrew Busby, Retail Reflections
However, Brightpearl’s survey found that just 19% of retailers have invested in technology or solutions to help them address the issues that most commonly cause poor feedback and ratings, such as problems with receiving items on time or overly complicated returns.
“To help get the most out of online reviews, businesses need to consider solutions which allow them to fulfil the modern expectations of customers – from same-next day delivery options to real-time shipping, hassle-free returns and incredible response times,” explains O’Carroll.
“With a great strategy – and the right technology – in place, firms can focus on generating the positive reviews and ratings which are more likely to capture the attention of today’s online shopper and lead to increased spend and better business.”
The good news is that despite this minefield, consumers are still actively looking towards retailers for guidance on affordability, giving companies another opportunity to impress with their customer service skills, which could in turn lead to more positive online reviews.
A study from Divido found that 68% of UK consumers want retailers to advise them on affordability. However, three out of five retailers (61%) do not believe it is their responsibility to police consumer spending. In addition, 30% of UK retailers do not consider it within their remit to provide advice to consumers on the affordability of a purchase.
While it is highly unlikely that retailers are actively choosing to ignore this consumer demand, it is probable that the industry is moving too slowly to address this issue, suggest Divido, which points to the fact that 26% of retailers have neither the expertise nor resources to advise on purchase affordability.
The other area of a clear disconnect between retailers and consumers comes with social media marketing. 89% of retailers believe that social media is an influential platform for its audiences when it comes to making high-value (£250+) purchasing decisions. The reality is, only 6% of Brits surveyed said social media influences them, admitting they are swayed more by advice from family and friends (69%), their loyalty to a brand (67%) and payment options available (60%) over marketing on social channels.
When asked about what influences their decision to buy a high-value item, 94% opted for getting a good deal. That’s well above the other influencing factors outlined above. Relentless discounting is not sustainable for retailers. Rather than getting in price wars with other businesses, retailers need to compete on other criteria such as brand loyalty and providing the best customer experience to drive footfall and increase sales.
“Consumers are promiscuous and unpredictable creatures, and demand brands to constantly be updating and changing to reflect current taste,” says Andrew Busby, founder and CEO of Retail Reflections. “One of the key takeaways in Divido’s report is the danger of discounting. In my view, staying close to your customers outweighs price and produce because in an Instagrammable, selfie-strewn world, relevance trumps discounting every time.”