The creativity and innovation that independents bring to the high street and the industry offer valuable lessons to all retailers, believes PwC’s Lisa Hooker
Is it time for retailers to start thinking a little more positively? While the last few years have felt like a permanent crisis, PwC’s latest consumer sentiment survey showed increasingly positive intentions and we’d expect that to continue as inflation falls and real incomes start to rise later in the year.
It was great to speak at the Association of Convenience Stores in Birmingham earlier this month. Not only was it lovely to meet everyone in person for the first time in ages, but we also got the chance to discuss the challenges and opportunities for the sector, including product predictions. Did you know that rum may finally have its moment and be the next gin? Rum infused with Seville oranges or hibiscus sounds very tempting.
More seriously, independents have long been the lifeblood of high streets with their importance to the community highlighted over the last few years, though recent data from the Local Data Company shows their success is starting to slow. Contrastingly, PwC’s store openings and closures survey showed chains resurgent again with some of the best results in years.
“Cutting costs across the board has long been an ineffective strategy that undermines future success”
On the face of it, this might suggest fortunes are changing for independents. But what I took away from the conference was the creativity and innovation that independent retailers bring to the high street and the retail industry more broadly. Many I met with are flourishing despite challenging conditions, the squeeze of inflation and cost pressures.
There are lessons here for all retailers, whatever their size.
Successful retailers have focused on brilliant basics. Even with the seemingly continual change, they have concentrated on delivering on the most important factors: price; service; value; and quality.
Crucially, they have been strategic in dealing with cost pressures. Cutting costs across the board has long been an ineffective strategy that undermines future success. Successful retailers have focused on the ‘good costs’ that boost capabilities and drive value while eliminating the ‘bad costs’ – such as those that add no value to customer experience − and thinking about future costs, such as sustainability.
Those triumphing against the odds are also brilliant innovators. With customer experience now the new currency, some of the best tailoring is happening in the independent sector. Because they truly understand their local community they’re able to hyper-personalise their offerings, bringing nascent brands to life that are appropriate to their local customers and meeting conflicting needs and demands while offering convenience.
“Customers are looking for a brand that can deliver convenience and speed, alongside community and companionship”
They’re also exploring the use of technology to create more sophisticated interactions with customers. But they aren’t using tech for tech’s sake – think seamless, not soulless. It must be led by people, so data, technology and creativity can come together to give customers what they want – convenience vs experience, for example – rather than having technology forced on them. Smart tills, for instance, are intended to remove friction and address shoppers’ number-one pain point: queuing. But retailers must ensure they’re not introducing friction into the experience by being difficult to use, unreliable or that the store loses the community feel.
What can larger organisations learn from independents? And how do they put it into practice? How do they deliver a feeling of community while remaining part of a large brand?
It begins with thinking like an independent, looking to combine convenience and community alongside the broad range of offerings already available. Above all, it means focusing on the customer and what they really want and need. Can you give greater autonomy to individual store managers, allowing them to act more like an independent and giving them free reign to delight customers?
Whatever the size of your business, customers are looking for a brand that can deliver convenience and speed, alongside community and companionship. Retailers able to balance these sometimes conflicting requirements will meet customer wants, occasions and opportunities to win a share of wallet and improve customer loyalty.
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