Why shoppers are demanding fresh thinking from retailers

Click here!First published in Retail Week 12th May 2016
Chewing the fat with retail leaders is usually a fascinating experience, but a chat with the people who shop in their stores can prove equally illuminating.

That’s why Cheil spoke to 150 leaders in the top global retailers and also to a representative group of shoppers. The aim? To test our belief that retail success is increasingly linked to a strong internal culture and a focus on innovation.

And by innovation I don’t just mean the bells and whistles, the phones and the drones, that are coming to play a key role in the business, but also in terms of adopting a progressive approach to all elements of the business, especially the customer.

What’s startling is that the results, especially from the consumer angle, suggest innovation is not only essential for retail success but also for survival. But first, a bit more about the findings. While the retail leaders identify Apple as the most innovative retailer in the world, consumers don’t agree. They select Amazon, for very clear reasons to do with innovation around providing shopper benefit.

In the eyes of retailers, Apple leads the way in terms of consumer and shopper innovation. Amazon is placed second, with Google third, followed by Walmart. The other companies, completing a top 10 dominated by tech brands, are Dell, HP, IBM, Microsoft, Samsung and eBay.

Regional variations

Some striking regional variations emerge from the research. While Apple’s reputation for consumer and shopper innovation is consistently high across the world, there is some good news for those at the more established end of retail, because US retailers consider Walmart to be the gold standard. This most likely reflects a rounded view of innovation that considers Walmart’s attempts to try new things in areas such as community engagement.

But what do shoppers think? Well, they agree with retailers that the more traditional store-owners are lagging behind tech-driven companies in providing innovation. With shoppers, though, it’s Amazon, not Apple, which wins the plaudits. Globally, 23% of shoppers identify Amazon as providing the best retail experience, followed by eBay on 5%.

Several traditional retailers, offering a combination of online and offline experience, have made the top 10 from a shoppers’ perspective. These include Target, John Lewis and Walmart. Overall, though, they lag far behind retail brands that have evolved out of the online space in terms of providing the best experiences for shoppers.This is supported by the UK-specific findings, which show Amazon is identified by 29% of shoppers as offering the best retail experience, well ahead of John Lewis on 14% and our biggest grocer, which is at the bottom of the list, just below some well known high-street names.

Generally, these findings support the idea that customer expectations of retail experience are being reset by digital-first retailers (such as Amazon and eBay) and the legacy retailers, particularly the grocers, have much work to do to bring innovation to their stores.

Shoppers identified Amazon as providing the best retail experience

When it comes to providing an innovative shopper experience, it’s clear that consumers crave, above all, technological innovation that delivers convenience, personalisation and simplicity of service. This supports my own belief that where retail innovation does involve technology it must be driven by customer need above all else.

Brands, such as the aforementioned Amazon and eBay, are seen to understand this, while others have much to learn at the same time as falling down on basic hygiene factors, such as providing a human service and being helpful. What’s emerged from our conversations with retailers and shoppers is that delivering innovation that truly benefits the consumer provides a clearer path to retail success than any other.

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