By Richard Piper, Director at Webloyalty.
Over the past few years we have seen the rise of the savvy shopper. Two years ago, the number one driver of retailer choice was quality, followed by the range of products on offer.
Today, as our Unfaithful Consumer; State of the Nation Report 2018 reveals the biggest driver in consumer preference is price.
On average, retailers in the UK have profit margins of 7%, which means that the shift in customer behaviour to choose retailers due to price is putting brands under significant financial pressure. Therefore, the question for retailers is how they can implement tactics to improve margins and tackle consumer drivers. With year-round mass discounting becoming the norm, multi-seasonal sales are having a detrimental impact on retailer brands.
Retailers must find alternative routes to drive loyal behaviours without squeezing margins, and subscription services are one tool to consider. As our research shows, almost half of UK consumers are members of at least one subscription service and those that do have subscriptions are members of an average 2.7 schemes. This example highlights the need for retailers to look beyond their traditional sales model and take advantage of the technology available.