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U.K. retailers looking to increase loyalty with better service, products

January 27, 2012

As U.K. retailers battle to grab market share from competitors, consumers should benefit from improved customer service and more innovative products that more appropriately match their personal preferences and shopping channel, according to the Retail 2012 report, produced by Retail Week.

"With the reality of increased unemployment and another recession dampening consumer demand, the prospect for growth is limited so this year retailers will be looking to take a larger share of the GBP 300bn annual UK sales pot," Helen Mountney, managing partner, Kurt Salmon UK & Ireland, said in a press release. "However, this can only be achieved by completely focusing on satisfying the needs of today's flighty, multichannel, professional shopper and delivering a great customer experience."

While much of this will be seen in store, where more than 90 percent of all shopping transactions still take place, the winning retailers will be those that make it easy for customers to shop across all their different channels and synchronise their product, pricing and service.

Almost half the retail bosses interviewed for the report placed investment in their U.K. stores and range expansion as their top priorities for 2012.

"Ever mindful of profit as well as turnover, retailers will also be looking to move the battle away from promotions and making price the determining purchase reason. They will be adding value in other ways: store environment, new products and new services," Mountney said. "Innovation need not be expensive; by developing a better understanding of how all the components fit together to bring a new product to market, retailers could actually reduce the cost price by up to 12 percent — and either pass on the saving directly to the consumer or invest it back into the business."

To survive in 2012 and beyond, retailers are going to have to deliver a pitch-perfect performance in all areas of their business, Joanna Perry, special projects editor of Retail Week, said in the release.

"No company is secure in these uncertain times," she said. "It is not just independent retailers based in poor performing high streets that are among the retail failures. There have already been more than 1,100 shops affected by five retail casualties in the first weeks of 2012. Last year, 31 failures accounted for 2,469 outlets. Larger businesses are just as vulnerable as smaller ones."

Read more about customer experience.