Xavier Quenaudon, Vice President, CFI Group, discusses how to maximise scarce resources during the economic downturn
The economic downturn has significantly changed consumers’ perceived needs and spending behaviours. Seeking more value for their hard-earned money consumers are pursuing creative ways to stretch their dwindling budgets. In turn, under the pressure of unprecedented revenue losses, many retailers are attempting to cut operating costs and remain competitive by slashing prices, reducing staff levels and trimming inventories.
But is this the right way to ensure long-term success? Is it right to assume that all shoppers are making purchase decisions based solely on lower prices, regardless of service levels or merchandise assortment? If not, what is the right balance in today’s environment?
If retailers want to prevent further defections and retain their customer base at a time when they are competing for an ever-shrinking household budget, being deeply attuned to the needs and satisfaction of their customers is an integral part of strategic operatives. Customer satisfaction plays a pivotal role in decisions about where to spend the next pound.
Retail customer satisfaction
Retailers are not underestimating the importance of customer satisfaction in a difficult economy. The National Customer Satisfaction Index (NCSI-UK) for the retail sector saw an overall score of 74.8 on a 0-100 point index scale, close to the US retail average of 75.2 reported for the same period by the American Customer Satisfaction Index (ACSI) and shows there’s plenty of room for improvement.
Beyond assessing how well shops are doing financially, retailers need to ask shoppers what’s “most important” to them and to link data to financial outcomes. By calculating the Return on Investment each improvement would generate, retailers have a scientific way to prioritise efforts and resources for maximum results and can invest budget with certainty.
The value of a seamless customer experience
Shopping experiences involve a series of fundamental employee-to-customer interactions from the initial welcome, to browsing assistance and the checkout process. Understanding how customers score a shop’s performance on the key touch points is essential from a strategic perspective.
Often underestimated, these personal interactions represent prime opportunities for retailers to build loyal relationships with shoppers and reinforce a customer-centric brand identity.
Providing a seamless customer experience that builds and reinforces the brand identity, and assures customers that retailers want to take care of them, which is critical to strengthening customer relationships for long-term profitability.
