By Joe Rohrlich, General Manager, EMEA, Bazaarvoice
According to a Deloitte study, discount and premium retailers are opening nearly three stores for every one their “balanced” rivals are closing. In tandem with this, premium retailers have seen revenue grow a staggering 40 times quicker than that of their mid-market competitors.
Exploring this trend around seasonal gift shopping, ‘The Edges of Experience’ report finds that 76% of mid-market consumers are indeed opting for luxury brands including Selfridges, Burberry, Mulberry and Omega at Christmas. What’s more, the majority of these consumers are looking to bag a luxury brand bargain by planning to purchase for a fraction of the price on Black Friday.
Consumers are planning ahead and thinking carefully about how they can buy big brands for less. While this may raise concerns for the mid-market, the report also finds a huge opportunity for brands in the run-up to Christmas so long as they capitalize on reputational advantages.
Using the Customer Voice
The study of 4,000 consumers finds that the most popular brands are now budget brands such as Argos, TK Maxx, H&M and Tiger. However, while discount shoppers remain steadfast in their choice of the best prices, the UK, French and German mid-market shoppers still prioritize the quality of products.
Budget brands have worked hard to serve this preference, but true mid-market brands can harness their hard-earned reputations to redress shopper confidence and loyalty. In particular, ratings and reviews reflect the customer’s voice and help fellow consumers make informed purchase decisions. They also assist in product discoverability and give brands and retailers valuable product insights.
The mid-market has enormous opportunity to use the voice of the customer to create more meaningful shopper experiences which will ultimately result in increased basket value and customer loyalty.
Supply Chain and Delivery
Paired with the rise of ‘value’ brands, the mid-market is being squeezed by the online marketplace. Amazon has a monopoly when it comes to consumer perceptions of where the best product deals are over the winter sales period, with 60% of all shoppers placing it at the top.
Despite this apparent dominance, contributing factors for consumers not choosing global marketplaces for Black Friday deals are the delays in delivery (42%) and articles selling out (28%). This has been caused by so many shoppers flooding the site and completing purchases simultaneously.
Many mid-market brands are institutions of the high street and compete for much smaller proportions of the market. They must stick to what they know, delivering consistent online and offline experiences, planning the supply chain expertly to ensure they meet demand with exemplary service that cuts above pureplay online rivals.
In the run-up to Christmas, shoppers value the in-store experience for the gift ideas they get while visiting. In fact, nearly three-fifths of consumers across Europe are planning gifts they don’t believe Amazon can help them with.
This is predominantly associated with travel orientated gifts and experience-based gifts such as track and spa days. But opportunities are there for any brand with a high street presence to reach out and engage shoppers with free tasters and samples — over a third of UK consumers associate a great brand experience with what they can physically try first.
Effective product sampling is one of the best ways retailers and brands can get to grips with what will successfully inspire shoppers browsing the aisles. Sampling not only provides a significant opportunity for brands to get their products into shoppers’ hands but also to collect feedback and content to use as advocacy ahead of a wider product launch.
Interestingly, UK shoppers are actually more likely than their US counterparts to be using the in-store experience for the sights, sounds and ambiance of Christmas. In the US, 42% of holiday shoppers said they brave the crowds and shop in-store because they enjoy the festive ambiance, placing them 13% behind the UK.
One watch-out is special holiday activities, such as visiting Santa or ice skating being offered at a store. These are perhaps a cultural step too far for the Brits, with just a quarter taking part as opposed to nearly one-third of Americans.
Ultimately, the more insight the brand can encourage customers to share with them, the more closely it can craft experiences to cater to key market segments and other prospective customers. This year, the mid-market has enormous opportunity to use the voice of the customer to create more meaningful shopper experiences which will ultimately result in increased basket value and customer loyalty.