Shoppers seem determined to spend at any price. They put £20 million a day on credit cards. We’ve seen the fastest rate of increase in borrowing for 11 years, at 9.3%.
Brexiteers point to a bounce back in (ONS) sales figures: after poor results in December and January, UK spending in the high street was up by 1.4% on January and 3.7% higher than in February 2016. But what does the future hold?
The reality is – whether you are a retailer or entertainment venue manager – you can’t control general economic conditions.
But you can directly influence whether and how your business will prosper – if you plan a strategy that influences the profile and spending intentions of the customers you attract; what they spend and how often.
There are likely to be strong recessionary pressures over the next few years. That much we know – perhaps.
So, what can we learn from the last recession, in the years following the ‘Great Recession’ of 2008?
1. Consumers defer big purchases. That affected furniture and homewares in 2008, with The Pier, Ilva, MFI and Land of Leather among chains that perished. By comparison, supermarkets and value chains such as Primark gathered pace as consumers traded down.
2. Fun and escapism are on the menu. Cinema visits, eating out, days out all help to ease the economic gloom for consumers. Even champagne sales boomed after an initial sharp decline in 2008 and 2009; the number of bottles shipped to the UK rose by 16.3% in 2010.
Conversely, perversely, many businesses do less well when the economy picks up. More restaurants closed in 2015 than at any time during the recession The Telegraph reported. Over 1,200 restaurants went bust that year, 50 per cent more than during the recession.
Here is the key point: it was the innovators that did well, and continue to do so, putting more established eating houses that failed to adapt and change out of business. This has meant we’ve seen the steady rise of fashionable “concept” restaurants, such as those that serve only cereal or have cats roaming around – Cereal Killer and Lady Dinah’s Cat Emporium.
But you don’t have to appeal just to hipsters.
Restaurants that offer more traditional fare and ambiance but with a distinctive offering, focused on a profitable niche sector have also thrived. Visitors to a Cote Brasserie or to Byron Burghers know exactly what they’ll get. And they like it.
Yet many other eatery owners have attempted to offer similar food and formats, and then failed.
It is all down to customer expectation, based on their last experience.
Success demands that you have a very clear focus. That you understand exactly what customers want, expect and what they are actually getting from you (and from your competitors).
It’s about achieving that very delicate balance – between your margins and the quality of the offering, the service, pricing, waiting times, ease of use, access and ambience.
And how do you know if you are getting it right – whether customers will come back, tell their friends about the great experience? Through mystery shopping. It’s now the research tool of choice for canny marketing, sales, business and customer experience managers. But only if you know the questions to ask, when and how. And with a well-managed, and committed team of shoppers, based on a proven MS CX process.
You’re welcome to message me for more details – how to structure an MS CX programme, results you can expect and what to do next, whether you’re considering mystery shopping for the first time or changing suppliers.