June 09, 2017 Industry news
Fashion magazine, Drapers and GS1 UK partnered together to create a report on what shoppers want online. We surveyed 2,000 UK shoppers who told us what they look for on their favourite retailer or brands’ websites
In today’s world, online shoppers are fickle and more demanding than ever thanks to technology. It’s an exciting time for customers, who are offered more convenience from online deliveries and product choice. But retailers are battling for their attention as they search through sites to find the best deals and services.
Gary Lynch, CEO of GS1 UK goes on to explain the issues online retail is facing. “Sales growth in retail is increasingly being driven by online shopping as retailers expand the number of channels to better serve the modern shoppers. But, while sales are increasing, margins are being negatively affected by the higher operational cost of a more varied distribution network, more fulfilment options and a more demanding customer.”
Customer satisfaction has always been important to retailers – they depend on customer loyalty and long-lasting relationships to maintain growth. But, with more technologies and channels being introduced, it’s easy to get caught up in the many new ways retailers can draw in and convert customers, without taking full consideration of the cost.
Their needs to be a clear balance between relationships and spend. Retailers want their customers to value their services and they want to create an online presence that’s customer centric. However, if we look back at the GS1 UK report on managing the omnichannel cost-to-serve, it was highlighted that while omnichannel customers can have a lifetime value three times higher than those who shop via a single channel, they also have a higher cost-to-serve.
So, where are these hidden costs coming from? Retailers have always had a good grasp of their costs at an intake margin level, but the costs for delivery, returns and support at a product and channel level are frequently not being measured. This is why it comes as such a shock to retailers when their sales are up, but their net margins are down.
Retailers will continue to invest in new technologies which will bring customers to a more personalised world. But, before doing so, there needs to be a clear understanding of the cost and the value of the investment. Before investing we also need to ask the question, will our customers really value this?
What customers want will vary from retailer to retailer, but investments need to be motivated by a true understanding of a customer’s needs and priorities without being overly clouded by competitive behaviour.
Read the full report hereRelated
Cost-to-serve: Knowing where costs build in the supply chain is key for ensuring profitability