Slowing sales, is this the time to think about customer experience?

Slowing sales, is this the time to think about customer experience?
5 minutes read

We wait with baited breath for the Office of National Statistics’ (ONS) GDP figures for the end of 2023. The British Retail Consortium (BRC) has already suggested that sales growth in December was well below the previous year and that underlying volumes may have declined. The ONS confirmed this on 19th January, estimating that retail sales (volumes) perhaps fell by -3.2% in December. Whether your festive period was a flurry of credit card action or not, you may have noticed something. Since many out there downed some turkey, have you noticed a high volume of ‘How did we do?’ or ‘We value your feedback’ emails come through? Whilst slightly subjective, it was noticeable to us just how many requests arrived. We could just chalk it up to coincidence and move on but it may also be symptomatic of concerns in retail. So, if you have slowing sales, is this the time to think about customer experience?


Slowing sales

According to the Confederation of British Industry’s (CBI) trade survey, UK retail sales fell faster in the year to December 2023. This supports the findings of the BRC. Also, the ONS estimates that annual retail sales volumes were -2.8% below 2022, the lowest since 2018. Online shopping didn’t escape either, with volumes estimated to have finished -2.1% down. Either people have less money, prices were too high or many feared the bills come January. Other theories imply that more was spent on going out in December. As a retailer, what do you do about slowing sales? Do you discount further? Do you search for ways to cut costs? Or, perhaps you wait and hope for the best. For many retailers (excluding food), stock was planned and ordered way before December. The lead times for some products, especially those being shipped from China, can be in the order of months. In fact, some retailers are ordering next season before they know how well the current season will pan out.

The result is that stock purchased at potentially inflated prices needs to be sold. The trouble is that if a retailer has overpriced stocks, it really can’t afford to make a loss on that stock through heavy discounts. One answer is to try and understand the mindset of their customers. Are you doing something wrong that means that customers are not buying your wares? Have they forgotten about you with so many competitors vying for their attention? Was your customer service experience below par which ‘turned off’ some customers? Ultimately, the retailer does not want to ask you if higher prices put you off. That would be showing your cards in a game of poker. January is often a game of chicken between consumers with less money to spare and retailers with stock to clear. Who will blink first?


Are you thinking customer experience?

Okay, so we may have hinted this in the last paragraph. A few retailers appear keener than usual to obtain your feedback. Call us cynical but we suspect this ‘faux care’ is a ploy to remind customers that you care about the customer experience you offer. It is also a good way to communicate without further ‘spamming’ customers with reminders that the sale is now on. Not all people will complete such requests for feedback, nor will all understand the rationale. Some may wonder why you are choosing the last 2-3 weeks to ask if you have not asked them all year long.

The definition of customer experience varies. A simple definition is the general impression that your customers have of you from pre-purchase through purchase to post-purchase stages of the buying journey. We prefer to think of it as the emotional and physiological response to every touchpoint with an organisation. It starts at the first awareness of your brand and ends once all post-purchase (including all after sales) obligations expire. If, for example, such surveys are sent asking about customer services, it may be intended to find ways to lower the cost-to-serve. If the survey asks about the purchase stage, the retailer is obviously trying to find ways to remove barriers to purchase. The trouble is, there is an implicit trust in any brand and you don’t want your customers questioning your motives. In summary, if you don’t normally live and breathe CX, don’t pretend to do so just for January.


Transforming customer experience increases sales

Delivering a superior customer experience is difficult. Furthermore, if your employees are not happy and motivated at work, it is an uphill struggle. There are of course many things that you can do around the edges to help, such as digitising elements of your experience. However, at some point in most retail experiences, customers engage with your employees. From checkout operatives to customer service agents and delivery couriers to café baristas. There are many modern examples of retailers removing elements of customer interaction in response. Digitised order kiosks, automated checkouts and online chat functions all remove human interaction. In many cases, the retailer has little or no idea of how this change is going to be perceived over the medium to long-term.

What we do know is that some brands, most notably Apple, lead with a superior customer experience. The result is that customers buy increasingly expensive handsets with the non-conscious association of a brand that offers superior CX. Similarly, market-leading organisations tend to invest heavily in customer experience. However, we believe that brands should be completely clear on where their brand perception is today before transforming customer experience. A Ryanair, Lidl or Poundland may relentlessly target price and a ‘no frills’ proposition. The result? Customers may perceive automation and digitisation as necessary to keep prices low, thus accepting a worsening CX. In contrast, a Etihad, Booths or John Lewis may need to consider the experience proposition to justify their pricing. The result? Customers may resent the removal of facilities, services, interaction and other quality-of-life factors, thus lamenting changes as worsening CX.


Slowing sales and gradual customer experience change

To counteract damage to brand perception, an increase in complaints and an exodus of customers, all CX actions should be core to the brand and to strategy. Similarly, if employees are not mentioned in your strategic objectives, good luck delivering superior CX. Your employees are also a great source of CX insight. Most customers will likely appreciate an effort to improve, especially if they perceive that CX has worsened. If there are other reasons for the sudden interest, cynicism may replace appreciation. In conclusion, transformational customer experience is a strategic choice and a long-term objective. A tactical email pretending to care isn’t going to transform your fortunes or get buy-in from your employees. Sometimes, it pays to treat your customers as adults and to deepen brand association to rewarding experiences.

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Finally, why not read a related article about the dark art of measuring experience.