The study of over 200 retailers (who post over £5 million in revenue) follows Divido’s recent research of 2000 UK consumers and highlights a fractured relationship between retailer and consumer, as well as the dangers of a discounting culture.
The research found that consumers are actively looking to retailers for guidance. 68% of those polled 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. This is shown by 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
Dangers of Discounting – The Race to the Bottom
When asked about what influences their decision to buy a high-value item 94% opted for getting a good deal. That’s well above 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,” said Andrew Busby, Founder and CEO of Retail Reflections. “One of the key takeaways in this 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.”
77% of UK retailers Divido surveyed said the Government needs to do more to create a level playing field between high street stores and online retailers. At the same time, 51% of retailers stated they see no difference between their online and/offline strategies, while 68% state that they are already re-evaluating their bricks-and-mortar strategy, in a bid to evolve their proposition.
Alongside this, Brexit remains a concern with 61% of retailers saying that the UK’s departure from the EU will disrupt their business and 65% stating it will lead them to re-evaluate their position in the UK.
“Consumers have had their voices heard when it comes to the changing nature of the UK high street, and choice is what is driving their decision-making – be that where they buy, how they buy, or what they buy,” said Christer Holloman, CEO and Co-founder of Divido. “Only those retailers that fully understand the changing nature of consumer spending around big-ticket purchases will thrive in the future – whether that’s online or on the high street.”