Friday 7 November 2014

How Can Traders Compete?

A simple email from our local supermarket has caused quite a consternation in our household. The email contained a list of products on special and looked like any generic catalogue you might receive in the mail. It seemed innocent enough until my wife realised that she had actually purchased each of those products over recent weeks. She uses a dedicated membership card at this supermarket and the retailer was using data collected at the checkout to tempt us with specials that we would most likely be interested in because we had purchased them before.

We are all familiar with retailers promoting to us through print, tv, email, and now social media. The methods have evolved over recent years to take on new digital avenues for communication but there is another element to the process and it is a bit scary. It is called Big Data and it relates to the huge amount of information that is being collected by retailers to boost their connection with customers.

Before traders start stressing over the difficulties of competing with every new innovation in retailing we should point out that the experience of one of the big boys in global retailing questions the value of Big Data. Tesco, the UK's largest supermarket, was acknowledged as the leader in customer research, analytics and loyalty programs. Tesco was the king of digital and yet its fall from grace following a long list of disastrous, highly publicised gaffs has severely tarnished its reputation and resulted in the recent resignation of its Chairman. One analyst has commented that Tesco may have collected a lot of data about its customers, but its competitor's slightly lower prices and simple uncomplicated retailing appear to be winning the day.

This is a technological age. Not even QVM traders can avoid the need to engage with customers in new ways, perhaps with something as simple as having a page on the QVM website, or your own web site, or engaging in social media. But if Tesco's competitors are a guide, we don’t have to get too sophisticated. Being price competitive, keeping it simple, and offering great service appear to be the three critical ingredients for success.