October 26, 2016
Many words are used to describe the modern retailing environment – multi-channel, omni-channel, e-tail, total retail, e-commerce etc.
What they all have in common is, in theory, having the consumer at the centre with access to multiple transaction and delivery methods.
That said, half term provides an opportunity to catch up practically with some shopping which is exactly what I did last week with one of my teenage sons in London. Every day, especially if one has signed up to any form of newsletter/loyalty programme, you get emails tempting you to buy more by the clever use of timed offers. For the shopper it is an increasingly complex world of offers where you are directed to websites where some items are on sale, others not, some sizes available, others not, online only, in-store only or both, delivery charges, free delivery, free returns versus paid returns, blanket percentage discounts but where pricing might have changed from what you saw before reducing the real discount and minimum spend levels.
So establishing the real discount value of a purchase can be a minefield when you take all of these into account.
Many retailers suggest that the customer is at the heart of all that they do. As the Ford advert goes ‘Everything we do is driven by you’ but is this true when there are so many options, qualifiers and rules? The severe challenge that retailers face is how do you maintain profitability, attract existing and new customers and keep selling your stock? If you are not careful then you condition your consumer to only sale shop. There are many retailers who have fallen into this category and the same is increasingly true of the food and beverage sector, such as the non-stop Pizza Express offers or third party offers, for example O2 Priority Moments and others. Then there are of course many voucher/discount websites such as Voucher Codes, Hot Deals, Wowcher, Groupon, My Voucher Codes and Voucher Cloud to name but a few. The final confusion exists between normal stores and outlet stores as they are often treated very differently and have very different products that may look the same!
Gap is the retailer I am going to use as an example today for three reasons – one, they are a well-established UK retailer with over 160 stores across all Gap Inc fascia, two, they have been growing, and three they recently announced that they were going to close all of their Banana Republic stores (their upmarket brand). Finally, over many years I have bought clothes from their fascia as a bachelor, a father, an uncle, a godfather and occasionally bearer of gifts. Latterly I have closely followed Banana Republic and also encouraged Gap for my children as they endeavour to stray to more expensive brands such as Superdry, Abercrombie, Jack Wills, Supreme and others.
Gap is a strong brand but one that has put itself well and truly in the never ending sale category which I think is a dangerous position for future profitability.
I also think it does not put the customer at the centre of it all as it used to. But why am I saying this and what evidence do I have to make such a judgement?
My views result from having made a purchase at a Gap Outlet, a Gap store and at Gap.co.uk. The first challenge resulted from buying some clothes at a Gap Outlet and then trying to return them to a Gap store only to be told that Gap Outlet was not the same as Gap and I had to return to a Gap Outlet store or spend time and money posting them back to the Gap head office in the UK. The catch is that there are not many Gap Outlet stores so I had to embark on the cost and hassle of packing, posting, confirming receipt and awaiting a refund which was a three week process for £28 of purchase!
The second example was last week when my son persuaded me that he need some more jeans so we went to Gap, found the right type, colour and size and presented ourselves to the checkout. As a customer I had recently received a 35% offer which caught my attention and so I showed the email on my phone and was correctly told that that was online only and could not be redeemed in store and that I would have to order online. So that is what I did and chose Click & Collect which was free delivery and would be in-store within three days. I then received a number of acknowledgements about my order being placed, order being processed, order dispatched and order arriving in-store. On picking up the order, there was clear signage to the Click & Collect area which was part of the main men's floor checkout. However no one appeared for nearly 5 minutes (see pic below) to deal with the order and when they did, they arrived with the plastic package and a separate bag, handed it to me and that was that. There was no opening the package so I could check it was the right order and then presenting it back to me in a Gap bag as if I had bought in-store. So all in all it was an odd and very un-total retail/omnichannel experience. Such experiences are a lost opportunity as John Lewis will tell you, their Click & Collect customers often spend more in store when they are there.
Retail sales require customer service and a positive in-store experience if physical premises are to remain relevant and be a valuable channel for a retailer.
The saving to me by having the discount was £8.03 which I consider as material when shopping. However, when I looked at this with my LDC hat on I thought that the process for Gap must have wiped any profitability out once the discount had been applied and the fulfilment costs taken into account. In my view, if they were a true 'total retail' retailer then each and every promotion would be in-store and online so that the customer would not have to waste time and Gap could have made an in-store sale there and then with no fulfilment costs.
I am sure there must be a reason but to me it strikes me as madness!
Two days later I received another offer which was 25% off and, as I had had my online only experience, I read the small print carefully to check that this was valid both in-store and online – hooray! (but 10% less discount).
So is the customer really at the heart of every retailer's sales and marketing strategy or has the complexity of channels, costs and customers resulted in a retail jungle where only a few customers can ascertain what the real deal is versus promotion?
It would be great to hear your views and experiences as this is not just about Gap and my experience, but a wider issue that I have watched develop between retailers and leisure operators and their customers. The latest development is that retailers are promising customers that they won’t lower prices before Christmas and others saying they won’t increase them.
What with post Brexit vote currency changes, uncertainty, and Black Friday and Cyber Monday next month, do any of us really know what is good value and when is the best time to buy?
This post originally appeared on Matthew Hopkinson's blog here.