Today’s consumer dictates

A new kind of consumer has been born and the UK high street needs to be ready for the transition with a vigorous plan B. Over the next five years retailers are going to have to completely overhaul their philosophy or risk alienating their consumer

base or, at worst, face financial ruin.

Don Williams, Head of Retail at BDO LLP, explains it this way: “One size no longer fits all. Businesses will not survive and thrive if they do not take steps to understand the psychology of the new consumer. The recession has been a catalyst for change and people are becoming much more demanding – they want a personalised experience without paying a premium for it. That means consumers want to buy from retailers who target and treat them as individuals.”

The report, Transitions to the New Consumer, published by accountants and business advisors BDO LLP reveals that this new age consumer is threatening the UK high street and leaving retailers vulnerable to catastrophic failure.

The study warns that more than 26,500 retailers will dissolve by 2015, which include around 15,400 fashion retail shops, and urges retailers to act now and adapt to the new consumer psychology. This will mean adopting a new approach to build brand loyalty in the fight for survival on the UK high street.

The post-credit crunch consumer is, in fact, the new “retail dictatorship”. The study highlights that demand for individualised service now dictates consumer spending, with shoppers less influenced by size, volume or product range, and instead make their purchasing decisions based on individualised service and personal shopping experiences.

Williams says: “The high street needs to redefine the concept of the personal shopper - only the personal touch will allow retailers to profit from this new breed of consumer. There are several ways to do this, but just through effective data capture businesses can start the journey to truly tailoring their approach to customers to activate purchasing.”

The report gives guidance to businesses on consumer engagement, examples include:

• Re-think who your customers are and who you want them to be
• Re-visit what great service looks, feels and sounds like
• Continuously review customer spending data and use it to provide a bespoke personal experience
• Consider the international dimension
• Develop and invest in multi-channel
• Focus on what customers want and need rather than product range variety

This is the second in a series of “Transition” reports published by BDO LLP. The UK-registered advisory firm, which boasts a global network of 1,138 offices in 115 countries, is expected to release further reports over the coming months on trends that will shape the business world for the next decade.

Picture: what consumer