Friendly staff, effective branding, staying across social media trends and connecting with customers will be essential for a healthy retail business in the coming year analysts say. The strategies are among a number of recommendations identified by national advisory body Retail Doctor Group as key to retail success in the future, based on results from a three-year survey of changes in retailer and consumer sentiment and behaviour.
The Consumer and Retailers Sentiment 2022 survey was undertaken in response to the pandemic’s impact on the retail sector, a tumultuous time for operators that saw some fail while others transformed. Most were stretched to the limit, and the survey found that inflation, faltering supply chains, recruitment and staff retention are still high among retailer’s major concerns.
Retailers could expect to come up against “a whirlwind of unexpected trends” in the next 12 to 18 months, analysts from RDG’s insights team found. Volatile consumer confidence, legacy network issues, fickle buying habits and fast-emerging technologies like AI and the metaverse would continue to pose challenges. Survival, then, would be reliant on being “ready to change and embrace the new 24/7 consumer” and growth would depend effective branding and meeting consumer expectations of physical shopping experiences and staff engagement.
The survey found 30% of 18–24-year-olds were starting to interact with brands on TikTok more frequently than other channels. Use of Tiktok by retailers had doubled since September 2021, and more than 1 in 3 retailers are using Youtube to communicate in 2022, ranking above Linkedin.
“Facebook, Youtube, Instagram and LinkedIn are the top social channels where we see consumers interacting with brands,” researchers said, adding retailers needed to constantly review their online strategies and customers’ behaviour.
One in 4 retailers planned to sell in the metaverse in the next 12 month while 1 in 3 consumers were interested to interact with retailers in the metaverse.
Other key findings
- Friendly staff were the number one priority for customers when they visited a store. One in 3 consumers want staff to genuinely talk to them.
- 88% of consumers pre-research before committing to a purchase.
- 63% of consumers start their buying process with a search engine.
- 2 in 3 interested Gen Z and millennials said they were interested in retail subscriptions.
- 1 in 4 Gen Z and millennials were interested in subscriptions for discounts on food and drinks at a café/takeaway
Where and how consumers are shopping
Shopper behaviour was “changing at the speed of light” researchers said, consumers no longer distinguishing between online and offline but looking for a branded experience instead.
In the last 12 months consumers shopped at: large shopping centre 69%; online marketplaces 52%; stand-alone stores 40%. The high proportion of people using online marketplaces pointed to a “more educated, omnichannel consumer” who was no longer linear in their purchasing behaviour. This type of consumer still wanted social interaction when shopping but their requirements from the physical store had changed. Instead, they were “more targeted in the physical environment, moving from browsing to hunting”.
This meant retailers had to ensure they were capturing the attention of those people who came into their stores by being proactive - introducing new ranges, developing new products, and enhancing visual elements with strong fresh imagery and window displays. (One in four 25–44-year-old customers reported they were looking for inspirational displays).
Optimising store layout would also become increasingly important according to RDG’s insights team which advised retailers update store design, consider less counters and barriers, and increase spaces for staff to interact with customers. These strategies would be among the most important for retailers in the year ahead because “brands that build connection with customers will be the ones that excel in the post-covid retail environment”.
Popularity of retail concepts
In the last 12 months, 48% of consumers used click & collect – including almost three in four 35–44-year-old customers; 23% used online chat; 22% took out subscriptions - the demand led by Gen Z consumers; 11% personalised products; 8% virtual try-on.
These figures, especially the rise in click and collect and subscriptions showed consumers were now shopping 24/7 analysts said. Consumers were “looking for a branded experience, available when they want, where they want”. The takeaway however was that different consumers had different preferences evidenced by the demographics and personality types.
For retailers this data showed that understanding the customers’ purchase journey would give them the ability to build a “brand ecosystem”. Retailers should capitalise on the ability to capture live customer data, create and showcase engaging in-store retail click and collect spaces and consider alternate data-based fulfillment models such as subscription.