The Retailer Winter_2017/18

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Retail insight shows consumers favour a multi-channel approach to shopping

Frank Woods Retail Sector Specialist NFU Mutual

“Women were more likely than men to plan a multi-channel shopping approach for Christmas 2017 (53% vs. 39%).”

AN NFU MUTUAL STUDY SHOWS BRITS STILL FAVOUR A MULTI-CHANNEL APPROACH TO SHOPPING, AND EXPLORES HOW SMEs CAN BENEFIT. E-commerce continues to grow and feature more heavily in the everyday lives of retailers and consumers alike. In 2016, £133 billion was spent online with UK retailers – equating to year-on- year growth of 16%. As a result, it is much easier for consumers to purchase products in a manner convenient to them. Our latest survey conducted with over 2,000 consumers as part of our Online Retail Guide showed how online shoppers most enjoy the convenience and accessibility (60%), and cheaper product cost (56%) that they associated with making purchases over the internet. However, specific insight on likely 2017 Christmas shopping behaviours also showed us that almost half (46%) of consumers planned to use a mixture of browsing and buying both online and in physical shops - highlighting the importance of both the high street and e-commerce. Popularity for buying from physical shops was primarily driven by the ability to ‘try before you buy’ (63%), and the convenience of purchasing on the spot (52%). Interestingly, women were generally more likely than men to plan a multi-channel shopping approach, (53% vs. 39% respectively), with men 20% more likely than women to shop online. It’s fantastic to see consumers still love the high street, and this is also reflected in store trends; online retailers, keen to take advantage of both retail worlds, are beginning to consider having physical stores to boost their brands. However, there are also barriers to overcome, with consumers most put off by overcrowded shops (44%), the cost of parking (31%) and lengthy queues (31%). It is important that bricks-and- mortar retailers address these concerns and also consider whether a multi-channel or omni-channel retail strategy would help them to appeal to more customers during busy shopping periods such as Christmas this year. For SMEs who may lack the resources of large competitors, technology is a true leveller. They can gain key insight into their established and potential buyers with minimal effort or expense. Dedicated hosts, such as Shopify and WooCommerce, have made it easier to get started online for the less tech-savvy. There are a range of user-friendly services available that could have retailers set up and trading in a matter of hours. However, it can be daunting for some businesses. Despite advancements in capability, the idea of building and operating a

they will need to consider how far they’re prepared to go, taking some time to do the research around how it will affect their business and by looking into the different options available. Our free guide may be a useful resource as a first port of call to get the information they need. ICM Unlimited interviewed a representative sample of 2,031 adults aged 18+ online on 22nd-24th September 2017 on behalf of NFU Mutual. Interviews were conducted across Great Britain and the results have been weighted to the profile of all adults. The research was conducted for NFU Mutual’s Online Retail Guide, a free PDF which gives practical advice on how SME’s can combine online and offline offerings to enhance customer experience and expand in the long term. Download it here .

website that processes payments can still seem expensive and complex. Trading online also brings fresh challenges such as tackling delivery expectations and online security. Our research showed that consumers’ main barriers to shopping online included worry about deliveries arriving on time (24%), concerns around payment security (19%), and damages during delivery (17%). Knowing the best way to go for a start-up or growing business can be tricky and it’s vital to remember that selling online isn’t for everyone. Before jumping in, retailers should think about whether it’s right for them at the moment, or at all. If not, it isn’t the end of the world. Property consultancy Colliers says that a growing number of online retailers are opening physical stores to attract customers and by 2021, they expect the rate of growth in online sales to actually slow down. And while research from the UK Cards Association shows that British shoppers spend more online per household than consumers in any other country, online still only accounts for 17% of the UK’s retail sales. While making a brand visible in this medium is becoming much more worthwhile, developing the skills and having the resources needed to engage with any customer is just as important – whether selling online or in-store. There’s no single approach and owners should aim to discover the relevance of the web for their business before deciding what’s right for them. Retailers are among the most digitally active UK SME sectors, however the Federation of Small Businesses says SMEs remain largely ill-equipped to deal with 21st-century consumer habits. In a recent report, they said that only 50% of SMEs are on the first page of search results featuring their brand name, 87% never respond to online customer feedback and 89% don’t engage on social media. In the digital age, achieving sales is not just about driving traffic to a website or premises, but also building a lasting relationship between customers and a brand. In online retail, anyone can achieve this by directly (and publicly) engaging with customers, for example answering feedback. Our own research also showed that online reviews are key for many consumers, including 32% of 18-24 year olds and 21% of 45-54 year olds. Positive reviews will give online browsers confidence to buy from a retailer, but the obvious risk is opening themselves up to potentially negative, public reviews. Retailers could start online by getting set up on social media, beginning to post and assess the landscape, and try to gauge if selling online is the right ‘next step’ for their business. If so, then

FRANK WOODS // 07967 578779 // Frank_Woods@nfumutual.co.uk // nfumutual.co.uk/business/specialist-sectors/ // @nfum

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