Retailers always have to make bets on the future, but without a crystal ball what are they predicting in terms of future consumer behaviour?
The first morning of The Cloud Retail Week Conference highlighted how quickly consumer behaviour is changing, and the short timespans retailers have to respond to these changes.
Ocado’s chief executive Tim Steiner explained why he chose to launch an iPhone app before other retailers, and why he chose that over building a mobile website. Basically he didn’t think the user experience would be good enough on a mobile site to convert his customers from ordering using their desktop computers.
And his bet paid off – 12% of his customers now transact solely via the mobile channel and he still hasn’t launched a mobile website. Ocado is now committed to delivering new functionality to its mobile channel first.
Meanwhile, John Lewis chairman Charlie Mayfield, said that increasingly fickle customers mean that retailers may have to accept that 80% of their business comes from 20% of their customers or even less. More to the point, these few loyal customers will almost certainly be the ones that shop across multiple channels. He advised that retailers focus on maximising the profitability of customers, rather than maximising the profitability of individual channels.
And Peter Marks, chief executive of The Co-operative Group, mentioned the major consumer insight project that his business had recently undertaken to help it understand what customers want. He acknowledged that the business hadn’t put the customer at the front of everything it did, and this is something that has to change.
Retailers will never be able to predict the future with 100% accuracy, but by thinking about how they might meet their customers’ future needs they have a chance to increase the odds in their favour.