As the UK retail market continues to grow, retailers need to determine how best to win a share of that growth.  

In a major new study, dunnhumby reveals a direct relationship between customer-centricity – changing an organisation to place customers’ needs at the heart of that business – and accelerated sales growth.

Part of a global study of 38,000 consumers, the Customer Centricity Index (CCI) was conducted over the past six months with 4,500 UK customers, analysing more than 50 leading retailers. Customers were asked for their opinion on more than 40 shopping experience elements – including in-store experience, price perceptions and customer service to help us understand the most important factors that drive their retailer loyalty and emotional connections. 

Their responses formed the seven pillars of customer centricity – the levers most critical to driving loyalty and therefore a retailer’s financial performance.

Improvement is achieved either by increasing a shopper’s likelihood to repurchase, or their likelihood to recommend a retailer to others.

Each retailer was given a CCI score out of 100 based on these two measures.

The study revealed that retailers with a high CCI score (>85 out of 100) were achieving a sales growth rate six percentage points higher than their lower-performing competitors.

High-scoring retailers also saw market share growth rates of over 6%, while their lower-scoring counterparts experienced a 2% decline.

For a lower-performing retailer with £1bn in annual sales, improving their CCI score to over 85 could achieve an additional £88m in sales over two years.

However, more than two-thirds of UK retailers are failing to reach a CCI score of 85, meaning many are missing out on the opportunity. 

CCI leaders and laggards

The three top-performing retailers on the index are Aldi, Lidl and John Lewis.

The CCI leaders are a mixture of value retailers – Lidl, Aldi, Home Bargains – and up-market retailers: Waitrose, John Lewis and Marks & Spencer.

In all cases, a common driver of their high CCI ranking is their leadership on the pillar of ’affinity’clearly standing for something which resonates with their customers and consistently delivering an experience to reinforce this value every time.

Affinity is the single most important driver of consumers’ perception of customer-centricity, accounting for a third of the CCI score, and is far more important than other factors, such as price, in creating positive word of mouth and repeat visits.

How retailers can improve their CCI score

Retailers that achieve a high affinity score typically excel in one or two areas, rather than focusing on secondary pillars that do not contribute to what makes them great in the eyes of their customers.

In the case of the value retailers, they perform exceptionally well on the price pillar, whereas upmarket retailers such as John Lewis do brilliantly on range and in-store experience.

Achieving a great CCI score is therefore a reflection of how you best invest in the areas that support the brand and deliver against customer needs.

The CCI enables retailers to identify their opportunities and put a tangible value on customer centricity.

  • Naomi Kasolowsky, global MD for customer strategy at dunnhumby