- More than two-thirds of consumers today are less confident in the economy than a year ago and 76% are spending less.
- Almost 56% of shoppers indicated value for money as as one of the important factors that impact their loyalty to mass market retailers.
Image: Reuters
Retailers are increasingly faced with the challenge of retaining customers due to the high cost of living, according to latest analytics.
According to data by US n=based analytics company, Verint Systems customers have slashed on their consumption rates and are also much conservative on their discretionary funds.
They have also become less confident in the economy thus spending less which automatically trims the purchases from retails.
The firm says retailers must address the challenges maintain customer confidence. It says there is need for enhancing consumer experience.
“Retail customer experience is key to earning shoppers’ extra discretionary shilling in an era of high inflation and creation of exceptional experiences should be at the heart of every retailer’s engagement strategy,” Verint says.
A benchmark survey on retail purchase trends conducted in the US shows that more than two-thirds of consumers today are less confident in the economy than a year ago and 76 Per cent are spending less.
The survey also noted that almost 56 per cent of shoppers indicated value for money as as one of the important factors that impact their loyalty to mass market retailers.
With the cost of living in the country rising to the highest level in 63- months in September to hit 9.2 per cent up from 8.5 per cent in August, consumer reactions on expenditure cuts could be inevitable.
"About 91 per cent of consumers shop at their favourite mass market retailer at least once a month, with 83 per cent spending about Sh6,000 or more on average," Verint says.
Retailers should also target the first time shoppers’ experience. A delight to them would benefit the retail business at large, the report suggests.
It notes that three-quarters of consumers who tried a new mass market retailer for the first time in the past six months, and were impressed, shopped there more than once.
Ninety percent per cent of first-time shoppers make purchases at least once a month thereafter.
After having an good customer experience, 88 per cent are likely to make a repeat purchase and 82 per cent likely to recommend to friends or family.
Also, 68 per cent of them are likely to join a loyalty program and 63 per cent likely to write a positive review.
It motes that many businesses have failed to adequately focus on customer retention, instead choosing to prioritise customer acquisition.
For those that do choose to prioritise customer retention, statistics seem to show highly favourable results.