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Cost of shopper defections in UK retail could add up to 147 billion pounds

By Huw Hughes

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Retail

If all dissatisfied customers in the UK were to turn their backs on their current retailer of choice, the total annual defection cost would be 147.2 billion pounds, according to a survey conducted by Webloyalty and GlobalData Retail. Staff rudeness, price rises, and poor product quality came out top of the list of reasons for customers to defect. The rising disloyalty is up from 120.6 billion pounds two years ago.

The Unfaithful Consumer State of the Nation report also revealed that 19 percent of shoppers deemed it important that their retailer was a “good corporate citizen” when it comes to environmental issues, tax avoidance, and staff welfare, and would stop shopping at them if they weren’t. “The rise of online shopping, along with Amazon’s online empire, has contributed to increasingly fragile customer loyalties,” said Neil Saunders, Managing Director of GlobalData Retail.

147 billion pounds would be lost if UK customers defected

Price tags take the top spot in reasons why shoppers choose a certain retailer, up two places from the 2016 study, and ranking higher than product quality. The study suggests that the rise in disloyalty is linked to customers becoming less tolerant of retailers who they deem to be inadequate in areas such as pricing and customer service. Staff rudeness (58.5 percent), significant price rises (50.6 percent), and poor-quality items (45.0 percent) are among the top reasons cited for customers to defect.

Commenting on the survey results in a statement, Ben Stirling, MD, Webloyalty Northern Europe, said: “It’s perhaps unsurprising that [shoppers] are motivated by price and quality but it’s interesting to see ethical considerations entering the fold too. Over the last year in particular, there’s been increased scrutiny on environmental issues, especially with the recent plastics debate, while issues with employee welfare and zero hours contracts have also been highly criticised.”

UK shoppers becoming more concerned about ethics in the retail industry

The study also revealed a correlation between the decrease of customer loyalty and the increase of customers ‘shopping around,’ with a 60.1 percent increase in the number of stores or retailers a customer uses to shop for fashion. “Amidst the current challenging retail climate, retaining customer loyalty has never been more important. This research shows that shoppers have more choice and price transparency. As a result of this, they are increasingly fluid in their loyalty and they have little tolerance for poor service,” Stirling added.

The research was conducted on 2,000 UK consumers by GlobalData in September 2018.

Photo credit: Pixabay, chafleks

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