Comparing US and UK retail markets for 2018
2017 brought one of the most competitive retail environments to the UK than the country has seen in decades. With it, a growing preference for online and mobile shopping.
In the US, a different period of transition is stirring.
But the two vastly different markets share more than a common language.
Here are five retail expectations and forecasts for the coming year.
Brand loyalty will be challenged
Competition in today's market is intense. In turn, acquiring new customers is increasingly complicated and expensive. As such, business strategies are no longer focused on customer satisfaction but rather on customer loyalty.
Both US and UK consumers like to shop based on brand loyalty rather than trying something new.
In fact, 71% of Americans consider themselves brand-loyal whist 65% of UK shoppers say the same.
But Millennials across the globe are challenging this tradition by becoming less and less loyal to brands.
In general, they care more about the product and not about the brand itself.
Product quality, a unique customer experience and convenience are key
Consumer needs are more diverse than ever before. Consumer needs are becoming increasingly diverse driven by wider social and cultural shifts, such as urbanisation and an aging population.
Within this competitive environment, brands must work harder to focus their efforts on the high potential innovation spaces, and this starts with understanding consumer needs.
But whilst delivery service as a convenience is common in both markets, the value is perceived differently.
In the UK, 29% of shoppers say that fast and reliable delivery (same day, collect from store or designated place) are reasons for shopping with their favourite retailer.
Across the pond, however, Americans value free over fast, with 88% of respondents saying “free shipping” was more important than faster delivery methods.
Pricing will remain a key factor
Low price continues to dominate shopping decisions across the globe as retailers work to refine their pricing strategies.
In the UK, 59% of shopper acknowledged this as the core factor. In America, 87% value price above all other elements.
As such, promotions and price comparisons play key roles.
Physical stores remain highly relevant
2017 caused a new digital tipping point for US retailer as e-commerce continued on its relentless growth trajectory with 8,600 stores estimated to close this year whilst e-commerce in America is growing 23% year-over-year.
But physical stores remain highly relevant – we’re tactile creatures after all.
So what are the top factors for in-store shopping? Profoundly knowledgeable sales associates and the ability to check stock both online and off.
Unfortunately, this doesn’t seem to be a priority for UK retailers as only 23 percent of consumers there said they enjoy the shopping experience in stores.
Brands will continue investing in omnichannel
Customers are firmly in the driving seat and will continue to embrace omnichannel retailing as the tipping point between in-store and online is reached.
Interactions that are complex and attract more multichannel behaviour, have the biggest potential to delight customers. But retailers aren’t yet offering a seamless experience to customers across channels
In the UK, only 50% of UK online shoppers felt they get a consistent and superior multi-channel experience and 22.3% argue retailers’ mobile websites are not easy to use.
However, almost half of British respondents are willing to use mobiles to pay.
The US isn’t far behind with almost one-third of US respondents saying they use their mobile devices for purchasing.
In today’s rapidly evolving marketplace, uncertainty in individual markets has a transverse effect on the economy. What are the key trends, challenges, and opportunities that may affect your business and influence your strategy?