How to Compete on more than just Price

Brits are feeling the pinch. Inflation has hit a 40-year high, as the costs of food, fuel and energy skyrocket. And this mounting financial pressure is changing the way that most consumers make their purchasing decisions.

Do I need this? Is this the best price? What alternatives are there? These are all questions that consumers will increasingly be asking themselves.

This puts many retailers in a precarious situation. How amid the greatest squeeze on the nation’s purses in decades can they avoid a race to the bottom? 

Waging a losing war

E-commerce providers are likely to rise triumphant in this environment. A survey of UK consumers in 2021 revealed that nearly three-quarters of Brits (72%) look up prices on the internet before deciding whether to shop in store or online. The higher overheads of physical stores, not to mention the additional charges of public transport or parking to get there, make it difficult for them to drop their prices as low as many of their e-commerce counterparts.

But that’s not to say that online sellers can rest on their laurels. The sheer competition from not only domestic e-commerce vendors but international suppliers, like Alibaba who can significantly undercut the prices of many items for consumers that are willing to wait, could lead to a squeeze on prices that is unsustainable in an environment where supply chain and operational costs are rising. 

Retailers need to establish a new battleground

To avoid a war on price, retailers need to find other ways to attract new and retain customers. And this can only be achieved by delivering what their customers actually want and need. 

Retailers need to get under the skin of their customers to do this. They need to listen to them to understand how best to serve them. And these insights will give them an opportunity to differentiate themselves on something other than price.

A children’s apparel store might partner with Wacky Warehouse to offer free entry when parents spend over a certain amount, for example. So, parents can treat and entertain their kids at no extra cost. Or a grocery store might offer vouchers that can be redeemed in December, when many people will be expecting to spend more on their Christmas celebrations.

But such initiatives must be embedded in real customers’ insights. Guesses, gimmicks and stunts won’t be enough to influence Brits who are feeling the pinch. However, an innovative new offering that serves an actual need will not only attract their custom, but show them that the retailer listens, understands and wants to do right by them. 

Tap into always-on customer insights

The immediate ROI of understanding your customers is unquestionable in a period where many households themselves don’t yet know the full extent of how they will be impacted by the cost of living crisis or how their purchasing decisions will change. 

That is why self-serve ResTech platforms, which offer always-on access to insights at a much lower overhead than traditional market research consultancies, will be the right investment for many retailers as they look to get – and stay – under the skin of their customers without breaking the bank. 

For a demo of the only platform you need to connect with your customers and uncover compelling insights, sign up here.