Clear positioning and a true understanding of customer needs is the key to retail success, according to a top Aston Business School academic.
Figures, released by the British Retail Consortium (BRC), have revealed that total sales fell by 0.1% last year, marking the first annual sales decline since 1995.
Heiner Evanschitzky, Professor of Marketing at Aston Business School, believes that it's not enough for a company to offer good value, convenience and a seamless online/offline experience.
He said: “From the perspective of retailers, 2019 may well be remembered as the year when environmental concerns championed by the likes of Greta Thunberg finally put a brake on consumerism. Evidence from surveys suggests people are buying fewer physical things and instead are more interested in ‘experiences’.
“In the face of stiff competition and fairly subdued consumer sentiment, retailers have to adapt their business models. It seems that two strategies currently work well: a value-based strategy – as championed by the discount retailers Aldi and Lidl in particular – or an inspiration-based strategy – as the big destination shopping centres such as London’s Westfield and Birmingham’s Bullring offer. A retailer like Primark shows that you can even combine a value-based strategy with offering inspirational experiences, as one can see in their new flagship Birmingham store. While their results are not stellar, they’re clearly ahead of the market.
“Ultimately, though, the key to a successful strategy is to know your customers. Offering good value, convenience, or seamless online/offline experiences are no guarantee for success. The factor that differentiates is truly understanding customer needs and being clearly positioned - not being everything to everyone. Next, for instance, has historically done quite well in understanding their customers and – again – their Christmas numbers are looking quite healthy.
“In the new decade, knowing your customers may well mean paying more than lip-service to ethical and environmental concerns. If retailers want sales and profits to rise again, listening to customer concerns around sustainability, over-packaging and carbon footprints could well be the place to start.”
Professor Heiner Evanschitzky is available for media interviews on request. Please contact James Tout (details below) to arrange.
About Aston University
Founded in 1895 and a University since 1966, Aston is a long established university led by its three main beneficiaries – students, business and the professions, and our region and society. Aston University is located in Birmingham and at the heart of a vibrant city and the campus houses all the university’s academic, social and accommodation facilities for our students. Professor Alec Cameron is the Vice Chancellor & Chief Executive.
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