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Retailers ‘missing a trick’ on consumer trust

19th September 2013 • Notebook

New research by The Data Agency indicates that consumer trust in retailers with their sensitive personal data has fallen by 11% in only two years. The research, which looked at the attitudes of over 1,200 consumers, names the retail brands that are winning the race when it comes to trust and overall buying experience.

However, in spite of the decline in trust figures, 62% of consumers are still happy for their favourite retailers to use their data and data insight to personalise the services, offers and the marketing materials they send out. In fact, 21% of this group would be happy to part with more personal information in order to enhance and personalise the service they receive even further.

Well known for offering customers a highly personalised service the online retailer Amazon and John Lewis Partnership retail brands, Waitrose and John Lewis, scored highly for offering their customers the best buying experience in the study. While 78% of consumers, representative of 39,000,000 adults in the UK, said they had bought from Amazon in the last 12-months, an increase of 4% in 2-years.

Conversely, the troubled retailer Tesco has experienced a 2% drop in footfall according to customers who bought from them in the last 12-months. In 2011, 75% of consumers purchased from the retail giant however, in 2013 this reduced to 73%. Although the brand is famed for launching the first ever customer loyalty scheme, only 6% of Tesco’s customers in 2013 said that the quality of the buying experience was ‘the best’, a fall of 3% in 2-years.

Mark Roy, Chair of the Direct Marketing Association’s Data Council and Chief Executive of The Data Agency, said that this decline in Tesco’s customer experience might be down to the fact that “bad data and poorly targeted marketing is more attractive to retailers in a recession because it is cheaper than targeted direct mail or investing in insight driven consumer data to underpin marketing campaigns and drive customer transactions”.

“While driving down margins in a recession is no doubt important, Roy believes that this approach “is the data equivalent of fool’s gold and only retailers that invest in data insight and highly relevant offers by way of loyalty schemes for example can hope to redress the trust balance and increase sales.”

Although the research shows that store purchases have declined in favour of online with 5% more consumers buying online in 2013, bricks and mortar still has a place in the omnivorous retail environment. Once seen as being staunchly offline bricks and mortar retail brands, Morrisons and Primark are now diving into e-commerce thanks to recent partnerships with Ocado and ASOS aimed at increasing and sustaining their market penetration.

The key, finds the report, would seem to be capitalising on the rise of ‘showrooming’ where customers can see products in store before comparing the deals available in the online space using their tablets, computers or mobiles. Surprisingly, the popularity of catalogues within this omni-channel retail environment has noticeably increased at the younger end of the market proving most popular with 6.5% of 18-24 year olds compared to only 1.5% of the over 65s.

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