Summary Lecture 12 Notes

Lecture Overview

Learning Objectives

  • Examine the retail customer shopping journey

  • Understand underlying shopping motives

  • Assess the concept of store image

  • Examine the framework for retail positioning

The UK Retail Sector

  • Main Sectors:

    • Food

    • Non-food stores (department stores, clothing stores)

    • Non-store retailing (e.g., online retailers)

    • Fuel

  • Economic Output: £110.3 billion in 2022, accounting for 5% of the UK’s total economic output.

  • Employment: 2.7 million jobs in the retail sector (2022).

  • Online Retailing: 27% of sales made online in 2022.

  • Market Trends: Sales volumes fell by 2.8% in 2023, the lowest since 2018.

Leading UK Retailers (2022/2023)

  • Notable retailers include Tesco, Sainsbury's, Amazon, Asda, Morrisons, Aldi, John Lewis, Marks and Spencer, and Lidl.

VUCA World

  • The business environment is characterized by Volatility, Uncertainty, Complexity, and Ambiguity. Rapid changes, such as those seen during the COVID-19 pandemic, highlight this reality.

  • Example: UNIQLO temporarily closed stores but continued online servicing during COVID-19.

Key Trends in Retailing

  • Multichannel and Omnichannel Experiences: The importance of integrating multiple sales channels.

  • Personalization and Customer Retention: Focus on customer experience to enhance loyalty and satisfaction.

  • Digital Disruption: Impact of e-commerce on traditional retail.

Retailer-Shopper Relationship

  • Shift from a traditional model (push dynamics) to a modern interactive (engaged shopper) model.

Understanding Customer Experience

  • Definition: The holistic nature of customer interactions, incorporating cognitive, emotional, and physical responses to retail.

  • Firms like KPMG and Google emphasize customer experience management roles.

Customer Experience Components

  • Influenced by social environments, service interfaces, retail atmosphere, assortment, and situational factors.

Consumer Decision Journey

    1. Initial consideration

    1. Active evaluation

    1. Purchase moment

    1. Loyalty loop (repurchase or restart the journey)

Touchpoints

  • Brand-Owned: Under the firm’s control (advertising, website).

  • Partner-Owned: Jointly managed with partners (marketing agencies).

  • Customer-Owned: Interactions post-purchase (customer reviews).

  • Social/External: Influences from others (word of mouth).

Impulse Buying Types

  • Planned Impulse Buying: Planned but unanticipated purchases.

  • Reminder Impulse Buying: Unplanned purchase based on needs (e.g., running out of a staple).

  • Pure Impulse Buying: Spontaneous decisions driven by immediate attraction.

Motivations for Shopping

  • Personal Motivations: Diversion, learning about trends, sensory stimulation, self-gratification, physical activity.

  • Social Motivations: Human interaction, communication, peer influence, haggling pleasure.

Types of Shoppers

  • Apathetic Shoppers: Reluctant and dissatisfied.

  • Shopping Enthusiasts: Enjoy shopping and are likely to recommend stores.

  • Basic Shoppers: Task-oriented, prioritizing convenience.

  • Destination Shoppers: Trend-focused and enjoy the shopping experience.

  • Bargain Seekers: Price-oriented and proactive in discovering deals.

Store Image

  • Defined as the perception created in shoppers' minds based on functional attributes and psychological factors.

Retail Value Proposition

  • Must be clearly identified, relevant, credible, different from competitors, and sustainable over time.

  • Dimensions include economic, functional, emotional, and symbolic value.

Example Case Studies

  • Tesco and The Body Shop: Examining how brand values influence consumer perceptions and loyalty.