Posted by Editor on 27th October 2010 at 11:05 PM
Canny consumers command UK high street
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Businesses disregard new consumer psychology at their peril
A report published today by accountants and business advisors BDO LLP unveils a new breed of consumer which is threatening the UK high street, rendering retailers vulnerable should they fail to evolve with the post-credit crunch consumer mindset.
As the UK emerges from the depths of the economic downturn, the report - Transitions to the New Consumer - comes amid predictions that more than 26,500 retailers will fail by 2015, which include around 6,300 bars and restaurants and 1,500 homeware retailers. It urges retailers not to join the future ranks of failed high street businesses, but to act now and adapt to the changing mindset of their customer base. This will mean taking new steps to build brand loyalty in the fight for survival on the UK high street.
Crucially, the study pinpoints the post-crunch consumer as having shifted to a more reasoned and thoughtful form of consumption. Demand for individualised service now dictates consumer spending, with shoppers less impressed by size, volume or even variety of product, and instead make their purchasing decisions based on individualised service and personal shopping experiences.
Overall, BDO forecasts that consumer spending is expected to recover and continue to grow, with growth in retail spend forecast to edge up from 2.6% to 2.8% next year. Yet only those businesses that heed the habits of the increasingly canny consumer will safeguard their success in the years ahead.
The report provides guidance to businesses on engaging with the new consumer mindset, examples include:
Re-think who your customers are and who you want them to be
Re-visit what great service looks, feels and sounds like
Continuously review customer spending data and use it to provide a bespoke personal experience
Consider the international dimension
Develop and invest in multi-channel
Focus on what customers want and need rather than product range variety
Kim Hayward, Lead Partner of BDO LLP in Southampton, commented: One size no longer fits all. Businesses will not survive and thrive if they do not take steps to understand the psychology of the new consumer. The recession has been a catalyst for change and people are becoming much more demanding they want a personalised experience without paying a premium for it. That means consumers want to buy from retailers who target and treat them as individuals.
The high street needs to redefine the concept of the personal shopper - only the personal touch will allow retailers to profit from this new breed of consumer. There are several ways to do this, but just through effective data capture businesses can start the journey to truly tailoring their approach to customers to activate purchasing.
The study by BDO is the second in a series of reports, called Transitions, which set out a definitive view of the trends that will shape the business world for the next decade.
The first report released entitled Transitions The New Economic World Order, outlined the opportunities open in the new economic world order. The paper urged both government and businesses to focus on exports if the UK is to forge a prominent role in the new global landscape.
Future reports are to be released over the coming months and will cover:
Transition to new forms of capitalism
Transition to a new regulatory environment
Transition to sustainable development
Transition to a new corporate culture
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