By Alex Baldock, CEO
Article based on a keynote speech by Alex Baldock at the World Retail Congress in April 2022
May 27, 2022
We all know retail will change more in the next five years than it has in the last 50. The question is: who are going to be the winners and who are going be the next blockbusters?
Some might think it’s going to be the big pure play gorillas, but the evidence is pointing towards omnichannel retailers who give customers the best of both the store and online worlds.
However, when it comes to retail post pandemic, particularly if you’re an omnichannel retailer, it’s windy out there. Store based retail is facing into demand, cost and competition headwinds as consumers fundamentally change the way they shop. Retail is getting less of the consumer’s disposable pound, and softening demand, means there is also less to go around with many more mouths to feed. There’s still over capacity in retail – too much store space and online has added to that capacity without adding to overall demand – it hasn’t been incremental. The pandemic has accelerated this already stark change.
Consumer demand is also changing fast and today’s retailers must make shopping easy for them. New players in the delivery sector, have changed consumer expectations of convenience and immediate gratification: I want it, I want it now, I want it without any of the friction of delay.
The customer is delighted – all this is great for them. Loads more choice, convenience and value for money, with retailers kept on their toes and having to pull out their A-game. So, what’s an omnichannel retailer got to offer? It risks being an intermediary between supplier and consumer, a bland box shifter: that’s neither a secure nor a lucrative existence today. So, do we have to content ourselves with this diminished margin and precarious role? No.
I am bullish on large omnichannel retail if done right. Big tech retailers like Best Buy, FNAC Darty and Currys have faced into the big question ‘What are we for?’. The answer starts with the customer, as it must, and what do they value and what are they willing to pay for. If you overlay this with your strengths as a large omnichannel retailer, where these two things overlap, that’s where omnichannel can play and win.
All the big global tech retail players have boiled this down to one central consumer insight - customers find tech exciting…but they also find it confusing, as well as expensive.
Today, technology is a sustainably larger market than pre-pandemic. People’s attitude towards tech have changed as it’s become more central to their lives, keeping them connected, fed, clean, entertained and allowing them to work flexibly. However, tech customers still need help: to choose the right tech, afford it, and get the most out of it.
“At Currys we are building on this through our omnichannel model, making it easier for customers to shop and giving every customer, whether they’re shopping online or in-store, the benefits of both channels.”
Alex Baldock CEO
At Currys we are building on this through our omnichannel model, making it easier for customers to shop and giving every customer, whether they’re shopping online or in-store, the benefits of both channels.
We’re never out of stock for the customer. We will have the right product for the right customer somewhere in our network. We offer 24/7 help. Eight out of 10 of our customers cite colleagues as the reason for a great experience – making them our greatest advantage. And we don’t just offer this great colleague experience instore. Customers love our ShopLive video calling solution, with 34,000 of them using it each week to speak to an instore colleague - accessing our expert help and advice from the comfort of their own sofa. Through stores and online working together, customers can also get their hands on products faster.
Omnichannel allows us to build stickier and more valuable customer relationships, creating “customers for life”, changing us from a business that just “sells boxes” to anonymous customers, to one that has valuable customer relationships across multiple categories, over multiple years.
We’re about helping customers choose the right tech, of course. But we’re also about helping them afford it, and enjoy it for life, which is where credit and other services come in, as a foundation of knowing our customers ever better. Over 80% of UK households are already our customers and so the opportunity lies in growing the share of their wallet. Knowing customers better and talking to them more often, so that we better help them, is of more value to them and to us.
Omnichannel shopping and frequency are also key loyalty drivers, with customers who shop across both stores and online 27% more likely to return. However, services, and credit especially, are the strongest loyalty and frequency drivers of all. Repeat credit customers are 70% more likely to return than non-credit customers and credit helps customers afford the technology they want. This makes them more valuable as they spend more and are 20% pts more likely to buy other services. And Services build customers for life.
Our services help customers to get their tech started through deliveries, installations and product set ups. We also give tech a longer life with 11m Care and Repair plans in place across the Group and we own Europe’s largest electrical repair centre, which undertakes 1.9m repairs a year.
On top of this we plan to provide even more Services that will help customers to afford and enjoy their technology for life and as the market leader, and the only remaining omnichannel specialist, we are uniquely positioned to do this. With over 9.5m Services customers in the UK, we have a huge opportunity to build even stickier omnichannel propositions that build greater loyalty, and the possibilities seem endless.
So it’s fair to say, for all the headwinds out there, we love omnichannel. When you look at tech retail in every market, omni wins. At Currys, our omnichannel strategy to date has led to happier colleagues, happier customers (who are more likely to return) and a financially stronger business. And we’ve only just begun. There’s so much more yet to come.