Better customer service and more innovative products are on the way as store bosses look to increase customer loyalty


As UK retailers battle to grab market share from competitors and fill the void created by expected further business failures, consumers should benefit from improved customer service and more innovative products that more appropriately match their personal preferences and shopping channel. This was the view presented by specialist retail and consumer goods consultancy Kurt Salmon at the launch of the Retail 2012* report, produced by the leading retail trade journal 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  £300bn annual UK sales pot,” claimed Helen Mountney, managing partner, Kurt Salmon UK & Ireland.  “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% of all shopping transactions still take place, the winning retailers will be those that make it easy – and exciting - 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 UK 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,” added Mountney. “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% - and either pass on the saving directly to the consumer or invest it back into the business.”

According to Joanna Perry, special projects editor of Retail Week, who edited the Retail 2012 report, if consumer confidence and particularly consumers’ fear of unemployment are at the heart of the spending squeeze that retailers anticipate in 2012, then these challenges are at the “very heart of how retailers intend to tackle the situation”.

“Terms such as customer-centric or customer-focused can be platitudes or they can indicate a serious intent to align a business in a manner that allows it to anticipate and respond to changes in consumer behaviour and desires,” said Perry.

“To survive in 2012 and beyond retailers are going to have to deliver a pitch perfect performance in all areas of their business,” contended Mountney. “No company is secure in these uncertain times. It is not just independent retailers based in poor performing high streets that are among the retail failures. There have already been more than 1100 shops affected by five retail casualties in the first weeks of 2012. Last year, 31 failures accounted for 2469 outlets**. Larger businesses are just as vulnerable as smaller ones.”


*Retail 2012, a report on the state of the retail industry, from the leaders in UK retail, produced by Retail Week, in association with Kurt Salmon.

** Centre for Retail Research