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The age of the customer – Interview with Laurence Michael, Global lead for Retail GFK25.09.2014

Laurence Michael from GFK paints a very differentiated picture of the ecommerce landscape in the next years. Customers are getting more savy in using ecommerce and smartphones, but they are also developing a very clear idea of what the value is of shopping in real stores. And retailers will help them.



Laurence, what hides behind this mysterious title „The age of the consumer“?

Laurence Michael: I will talk about how the customer‘s behavior has changed over the last years and how this reflects on different audience segments and product sectors. As a result of this change I will address the potential and opportunities that retailers have to build customer loyalty online and offline.


Is there a thing like loyalty online?

Laurence Michael: Yes, and that‘s the main theme in my talk. People tend to think that online shoppers are very promiscuous and tend to shop where the lowest price is. Price is a major factor but shoppers tend to have a range of three or four websites where they buy 80 percent of their purchases from. So price is important, but also of great importance is to be in mind of the customer when they are in shopping mode. GfK did some research and found that one of the primary reasons to visit an onlineshop was the previous experience with this shop. Shops concentrating on the short term sale by focusing all their efforts into offering the lowest prices miss out the lifetime value of the customer.


Do returning customers doublecheck prices on price comparison websites?

Laurence Michael: We find, that customers have a pretty good idea about what the the price should be. If the price doesn´t insult them, they will go with the retailer. There is a certain range within which customers don´t feel the need for reasurance. But then other factors come into place: is the product in stock, can it be delivered as needed, does one have to put in his credit card details again and so on.


Does this price corridor vary amongst product groups?

Laurence Michael: Yes it does. With commodity products like books, people know the price and will not accept bigger differences. With clothing or electronics it is not that tight.


If you talk about the age of the customer, then persnalization comes into mind. Personalizaton of products or personalization of the shop itself and the marketing around it. How does this contribute to loyalty?

Laurence Michael: From a very general perspective, younger audiences don´t have a problem, if the online shop uses data from their previous visits or even from twitter or facebook. They even expect that, where it´s useful. People over 30 are less comfortable with that approach. They accept it in an email or as an explicit recommendation within the shop.

Concerning products it is similar. Younger customers easily demand, that the product is exactly as they want it. Older customers don´t even know, that this is possible. Think of Apple offering the option of engraving your name on a new ipod or iphone. Still it´s only an option.

But options are important. There is an example from BP. They set up touchscreen ordering points where people could configure sandwiches with extra chease and extra meat and so on. And BP found that people tend to order much more when ordering on the machine, than in the face to face dialogue.


One of the bigger technology trends is SmartTV these days. Will it affect ecommerce landscape?

Laurence Michael: No, not really. That´s not different between the UK and Germany. We have about the half of installed TVs beeing SmartTVs but only a small portion of users use the smart function. In the meantime we see a huge increase in people using smartphones and tablets as second screen. It´s more personal, the interface delivers a better user experience and don´t forget, the tv is often used in a family setting with a couple of people in front of the screen.


These days we discuss a lot about the digitalization of retail. Is that important to the customer?

Laurence Michael: No, unfortunately not. If we ask them about iBeacons and similar wizardary, they hardly know, what it is. It will come and it will develop, but we will see more dynamic areas, where digital just makes the shopping more comfortable. For exampe we will see a lot more click&collect services, not only in the shops but also in train station lockers where customers can pick up their purchases whenever they want.


But if that drives more customers in the cities, how does that go together with the decrease of retail square meters overall?

Laurence Michael: There is a decrease, because retailers want to cut their costs. They have learned, that they can not compete with the huge variety of products online, so in the future it will be a lot more about setting up an emotionalised customer experience in the store. We will see a lot of almost virtual stores in the cities, where products are displayed onscreen.


We see virtual stores popping up even for very analog and physical products like cars. Is that the right way to emotionalize?

Laurence Michael: There is a nice BMWe flagship store in London, where you can interact with a configurator on a huge screen. This will not replace the need to sit in the car physically, but it is an additional touch point.


For Laurence Michael, shopping via QR-Code is more of a marketing gimmick than a sales opportunity

For Laurence Michael, shopping via QR-Code is more of a marketing gimmick than a sales opportunity


Talking of virtual stores, Tesco and their south korea example comes into mind, where people buy via QR-code with their smartphones. How do you see the developement of mobile commerce and technology across the different european countries?

Laurence Michael: It has a lot to do with what tradition a country comes from. In Italy and Spain for example there are so many small retailers that mobile commerce and even ecommerce will only slowly replace that. In Germany and the UK things are different, ecommerce will grow more rapidly but not because of QR-code-shopping in a subway. That‘s a great marketing tool but not a dynamic sales opportunity.


Thanks for the talk Laurence, looking foreward to meeting you in Düsseldorf.

Ioana Sträter
Ioana Sträter
Ioana Sträter

Ioana Sträter verantwortete als ehemalige Geschäftsführerin das Kongress- und Messeprogramm von Management Forum, einem Unternehmen der Verlagsgruppe Handelsblatt. Zum Portfolio gehören neben der NEOCOM auch der Deutsche Handelskongress, der Deutsche Marketingtag, die Content World Konferenz und viele mehr.

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