Christopher Adams

The Business Herald’s markets and banking reporter.

How to charm customers in year of snake

Bricks-and-mortar stores still have a role to play despite the growth of online shopping. Photo / Natalie Slade
Bricks-and-mortar stores still have a role to play despite the growth of online shopping. Photo / Natalie Slade

We're about to enter the Chinese year of the snake, and retail commentator Jon Bird says shop operators can expect consumers to be pretty serpent-like in 2013.

"When you look at the characteristics of the snake - it's pretty close to the customer-type that retailers are facing now and in the near future," says Bird, chairman of retail marketing specialists IdeaWorks. "They're shrewd, scheming and intelligent and they want to be recognised and rewarded."

Retail spending slowed between the June and September quarters of 2012, according to Statistics NZ figures, although data from Eftpos processor Paymark suggested Christmas spending was up on last year.

But with cautious consumers unlikely to ramp up their spending significantly in 2013, Bird said the most important thing retailers could do was personalise their offerings.

Shoppers, he said, needed to be recognised as individuals and stores that ran loyalty programmes could gather valuable data on their customers' shopping habits.

"Retailers need to offer [consumers] tailored product and service solutions and reward them personally," Bird said.

Online's share of shoppers' dollars would continue to grow next year, but bricks-and-mortar stores still had a role to play.

The successful traditional retailers would be those that were "obsessed about customers", Bird said.

"In physical stores you've got to concentrate on delivering a better experience ... they've got to be places where customers want to hang out."

New Zealand Retailers Association chief executive John Albertson said stores could expect another "reasonably tough" year in 2013.

Despite the challenges, he said retailers needed to focus more on improving margins than sales.

"Consumers have been having a wonderful time," Albertson said, and the amount of discounting was having a detrimental impact on firms.

Bricks-and-mortar stores needed to think carefully about how they would attract customers, he said, such as through offering the best possible service.

Bird said traditional retailers could no longer think they were only competing against the shop around the corner.

Thanks to the growth of online, the world had become "one shop" with consumers' expectations, especially around pricing, being increasingly shaped by the internet.

Online shopping in New Zealand was tipped to reach $3.19 billion by the end of 2012 and $5.37 billion by 2016, according to a report by PwC and Frost & Sullivan.

- NZ Herald

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