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

• 2. Active evaluation

• 3. Purchase moment

• 4. 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.