A modern day challenge – predicting consumer behaviour

 

Are we better off checking the weather forecast?

As we all know, we are experiencing unseasonably pleasant weather – I shall refrain from making any disparaging remarks associated with the temperatures of late; for all those who do fear not winter will be along all too soon! And with this in mind availability, or rather lack of, has become front of mind once more as grocers in particular grapple with huge spikes in demand.

On our regular shopping trips (for those of us who still prefer to personally choose our meat and fresh) we have grown accustomed to being greeted by fully stocked shelves no matter what the external factors. Currently the weather is driving huge demand for certain products – are there any bbq tongs available in this country? And that once more brings the spotlight onto our favoured brands and our relationship with them. How many of us winced on hearing the news that one particular supermarket has raised the price of bottled water as demand has soared over the last few weeks?

But not only that, as we near the end of the month and July rolls seamlessly into August, perhaps this will not only go down as one of the driest ever July’s but one of the poorest for availability.

Weather has long played such a significant part in governing consumer behaviour and one could argue that it is the single most powerful influence on that behaviour. Also that it is likely to be extremely acute in this country where one extreme – whether it be sun or snow – can trigger their own extremes in buying behaviour whether it be for sun cream, bottled water, gloves, plastic sledges or snow shovels.  I am convinced that much of this is also driven by the fact that the weather in the UK is so unpredictable and that a) we are not geared for extremes as they come along so unpredictably  and b) when they do we try to take maximum advantage knowing that the opportunity will not present itself for many a while to come. Given these conditions, is it any wonder that for many years, predicting consumer buying behaviour has been almost the sole pre-occupation of many retail departments up and down the country.

And the irony is that whilst there is now more data held on sales, footfall, buying trends etc etc than ever before, predicting behaviour and retaining customer loyalty is harder than ever before. It is a modern day Parsifal – the Holy Grail – which remains a constant and shows no signs of abating.  But why?

Customers are extremely fickle and are showing signs of becoming ever more so. The current weather has had a significant impact but it goes much deeper than that. Post austerity (well we did grow by 0.6% last quarter) UK is a very different place to the heady days of 2008 and earlier. More and more we will look after number 1, shop around, visit demographically non-traditional stores, go without but equally make our luxury purchases. “I know this is the new normal but I’m going to still enjoy myself” seems to be the frame of mind. And what type of behaviour and expectation does this generate? Woe betide our favoured brands if they do not predict how we are going to feel at any given time. Woe betide them if they do not keep pace, if not ahead of our expectations. Because if they don’t there is no 2nd chance; we have practically zero loyalty and are becoming fearless in our shopping behaviour. Overlay this promiscuous behaviour with such an unpredictable climate and the challenge for retail today becomes all too clear.

 

What’s happening to my High Street?

Change in the last 25 years will pale into insignificance compared to the next 25 months

Previously I discussed the impact of social media on retail brands and how the power of social media influence is having a greater and greater part to play in how we engage with our favourite brands and in turn they with us.

Much has been written and said about the changing face of our High Streets but it is a fact that currently the pace of change within retail is driving a seismic shift in the look and feel of the High Street like no other we have ever witnessed. Rates & rent and the associate space race, empty units etc . are a significant and perhaps most obvious part of that revolution but it is what’s going on in store that fascinates.

I recently attended the Retail Week 25th anniversary celebrations and apart from being a very convivial evening,  I was struck by the enormity and pace of change we are seeing today. On occasions like this it is inevitable that we take stock and reflect. 25 years means that there is a whole generation (Y) of consumers who have never known the shopping experience without smartphones let alone EPoS or chip and pin. In 1989 the first out of town Next store opened and yet they are now an anchor for most retail parks. Prior to 1994 there was no Sunday trading. How did Tesco keep abreast of consumer habits prior to launching the clubcard in 1995? And 3 years later Amazon launched in the UK, I doubt that even registered with the majority of us but just take a look now.

And amongst all this, the technology within retail has also been rapidly evolving bringing such as QR codes, smart mirrors, augmented reality, contactless payments, click & collect…..the list goes on. But what’s happened in the last 25 years will pale into insignificance compared to the next 25 months. It will truly be mind-boggling.

4G, GPS tracking, cashless, drive thru click & collect, secure fulfilment bins in every household, 3D printing, stores with zero stock, 100% personalisation, Klout score discounting, Google Glass – these are just a few which are with us today and with varying degrees of adoption.  And adoption of these and more technologies will drive a completely new definition of shopping where the complete experience will be the key brand differentiator as opposed to the more traditional retail measures of product, price and availability.

Measuring total brand experience will become a key metric for retailers striving to understand and retain customer loyalty. Perversely this will become harder and harder to do as consumer behaviour becomes ever more polarised and buying behaviour less easy to influence or predict. Beer and nappies is the most well known example perhaps but in the future Mulberry and £ stores will make easy bedfellows where smartshopping will be seen as cool and clever.

Something to make your friends and colleagues envious of?