Latest thinking from Rebecca…
I never have cash on me. I pay for everything with card.
The first time I was able to pay contactless I was astonished. I couldn’t believe that for purchases of less than £30, I could just tap my card and go. It was remarkable. So quick. So efficient. I now always pay this way.
Most people are now paying with card – a total of 13.2 billion debit card payments in the UK were made last year, an increase of 14% on the previous year (according to banking trade body UK Finance). That outdid the 13.1 billion cash payments made, as the use of cash dropped by 15%. Further, the number of contactless payments almost doubled in a year to 5.6 billion.
You can therefore imagine my frustration last week, when going to pay for my coffee, card in hand, hovering strategically over the card machine, only to be told by the server that I couldn’t pay that way – they didn’t accept contactless.
This meant that I had to go through the “effort” of having to actually insert my card into the machine, type in my pin and wait for that to be accepted. Unbelievable!
After I hurriedly inserted my pin and left, I reflected on my behaviour. I was being ridiculous. The extra 3 seconds it would take for me to insert my pin would have no impact on my life whatsoever. It might even be nice to pause and interact with the person that was serving me.
As human beings, we have an innate ability to rapidly adapt to our environments. This is not always a bad thing; it has enabled us to survive in most regions of the world from tropical forests to deserts, freezing wildernesses, and compactly populated and polluted cities. However, it meant that my admiration of contactless payment quickly lead to disappointment when I couldn’t pay this way. It was a reminder to me that once our expectations have been met, they are set high.
Retailers and brands need to respond appropriately and quickly to the high expectations of consumers. Today’s consumers are knowledgeable, technically informed, experienced and continually connected. They have high expectations around service, value, offers and choice. The impact of retailers failing to meet their expectation can be stark.
A number of retail giants are failing. House of Fraser has recently announced that it intends to close 31 shops. Marks and Spencer are planning to shut stores and BHS collapsed in 2016. The power is very much in the hands of consumers and retailers must meet their varied needs. Expectations are higher than ever, and brands need to do more and more to meet them.
1. Holistic service
Consumers want an integrated omni-channel experience across all retail channels – in store, online and mobile. Whilst the in-store experience is still very important; ultimately, it is the omni-channel experience that retailers are being judged on.
The Starbucks rewards app is considered one of the top omni-channel experiences. You receive a free rewards card that you can use whenever you make a purchase. You can review and reload your card via your mobile, online, in-store, or on the app. Any change to the card gets updated across all channels in real time.
It is not enough to be the cheapest, service must be convenient and efficient. Amazon taps into the instant gratification and impulsive purchase behaviour of consumers. It means consumers don’t need to wait. Amazon prime now offers same day delivery. Tesco too – if you order before online by 1pm, you will be able to receive their groceries sometime after 7pm on the same day. Similarly, Argos offer same day delivery in which you can get certain products delivered in as little as 4 hours for just £3.95.
3. Understand your consumer
It’s more important than ever for retailers to truly understand their consumers so as to meet their expectations. By understanding the context of the consumer (their personality, locality, and feelings) brands can reach out in a more relevant way and deliver a more personalised service.
Red Bull does this very well. The brand’s content, marketing and communication is very much about its customers and what’s important to them. Red Bull appreciates that its consumers are young and energetic. Instead of trying to market its product to these customers Red Bull focuses its marketing on the activities they enjoy.
Loyalty programmes are still extremely important. These schemes must be accessible digitally (online or via an app). Amazon nails this – their loyalty scheme allows free 1-day shipping with no minimum purchase. Prime membership gives consumers access to a variety of exclusive deals and discounts. There are certain products which are launched first to Prime members only. Amazon also gives access to the entire content of Amazon Prime videos. This allows Amazon to get insights into consumers’ interests which in turn is used to generate more personalised advertising for them.
5. Social Media
According to a survey, the average person in the UK checks their phone 28 times a day – that’s at least once an hour and more than 10,000 times a year. With approximately 80% of all internet users using at least one social media platform, it is key that retailers keep in touch with their customers this way.
When expectations are not met, consumers are very hasty to tell everyone about it. Consumers frequently engage on social media to direct complaints. According to a survey undertaken by Lithium, 72% of people who complain on Twitter expect a response within an hour. It’s crucial to listen and act on information to provide a superior customer experience.
A number of brands are also focussing less on “selling products” and more on investing in their community. We see this with LuLuLemon. It engages with its customers very well and its sales are growing substantially – in their last quarter ending 31 May 2018, total net revenue increased 25% to $649.7 million. They state on their website ‘we wanted to create a community hub where people could learn and discuss the physical aspects of healthy living, mindfulness and living a life of possibility.” They have 2.4 million followers on Instagram and over 18 million video views on YouTube. They regularly publish content that informs their community on subjects such as travel, yoga, diet, and their products.