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01 October 2018 Laissez-faire in British retail – Let the consumers choose…

It is quoted that Napoleon described England as a nation of shopkeepers, but whilst there is some ambiguity as to if he did say this, the statement was first used by economist, Adam Smith in his study of the ‘The Wealth of Nations” in 1776.

It is a piece I recall from my student days and the recent release of ‘The Local Shop Report 2018’ by the Association of Convenience Stores last week on the current state of independent retailing in the UK and Northern Ireland, has brought some of the theories made 242 years ago into sharp focus. 

Smith’s reference was at a period of European upheaval when the vision of Europe was driven by French omnipotence and concern at Britain’s costs from the American Wars. 

Now, I’m not making any comparisons to current affairs, but as the ACS survey is released just six months ahead of ‘Brexit Day’, today as in 1776, there is fierce debate about bureaucratic intervention on free-trade, open commerce, taxation and social and economic impacts of government policies upon the retail trade and independent retail in general.

This explains why the overarching direction of the ACS report is on the sector as an employer and its contribution to the economy. This is borne out in the web content that supports the release of the report (see https://www.acs.org.uk/research/local-shop-report).

Critique of any study that relies upon market research, is usually related to sample size, duplications of respondents and volumes of where respondents are based.

It is standard methodology that ‘profile’ answers are multiplied to reflect the density of shop types to provide an aggregate view to the survey reports.

The convenience sector, which includes forecourt retailing, is currently undergoing a rapid evolution where the challenges of supermarkets and discounters have to be overcome, response to consumer needs and behaviours met, and intense consolidation (think Tesco/Booker, Co-Op/Nisa, Bestway/Conviviality, and Today’s/Landmark). Look at the ACS website and you’ll find examples of innovation and customer-centric services that grow and sustain independent retail in the UK and Northern Ireland, and progressive award-winning retailers. You can check one such example HERE.

Therefore, given that most retailers are operating under a recognised ‘fascia’ or ‘symbol’ group, it is surprising that there is a relatively low number of stores (29%) reporting that they offer a loyalty programme. (See page 12 of the ACS report.)

The convenience sector, due to its independent retail make up, interprets loyalty around rewards for purchases, usually restricted to the EPOS capability or signed over to a third-party mobile payment apps to fulfil the ‘function’.

Whilst this appeases the need to ‘do something’, when compared to the shopper’s requirement for a unified experience the solution cannot be managed from a limited app user base or EPOS centred loyalty, which is why the figures are lower than they should be.

Not once throughout the ACS report is the word ‘engagement’ mentioned. Community activity, yes; community engagement, no.

Local retailers do amazing things for schools, charities, community projects in terms of fund-raising or awareness, but fail to harness the support to maintain/develop broader shopper relationships beyond the campaign.

Retailers are either put off by the GDPR requirements, or don’t have time to understand them, and so, do not risk operating a shopper database to support their business objectives.  While there is a misconception that social media is free and can do the job, personalisation is not a word used often in the sector.  An illustration of this is the surprising observation that in the ACS report, no retailers are reported to be using email as a marketing tool.

Looking at the findings of the report, the biggest opportunity for retailers lies in engaging the youngest age groups (16-24 and 25-34 year-olds). The good news is that, as many bricks and mortar retailers Velocity Worldwide supports with our data, personalisation and insights platform, Darius® for Retail understand, these are the very cohorts that are most receptive to relevant retail tech. (See page 21 of the report.)

Establishing the means with which to identify how and when these important audiences wish to interact is key, and that requires engagement and a process to manage not just this group, but every other customer profile. This calls for a data platform approach.

Cost and time are often cited by independent retailers as the barriers to accessing quality tech-support, and they wait for their brand marketing to come to their assistance. Establishing a central process and platform will come about, but retailers shouldn’t hold their business back and lose customers to competitors. 

As to how the UK fared after 1776: well, once Napoleon was out of the way, we got on with the job and became a powerful global trading nation respected for innovation and technical advancements. 

Hopefully, history can repeat itself where the shopkeepers of Britain thrive by embracing the opportunities that lie before them.

If you would like to find out more about how you can drive engagement, loyalty and footfall we’d love to hear from you.

Andy Batt, VP Market Development (GB), Velocity Worldwide

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