Retailers lag in offering customer enhancements
Retail businesses are lagging behind other sectors in offering enhancements or add-ons to core products, according to new research.
The research carried out by incremental revenue specialists Collinson Latitude found that the retail industry is failing to recognise the potential for these products to increase their customer base and business revenues.
Only 40% of retail businesses currently offer customers enhancements or add-ons to their core business, such as insurance or complementary lifestyle products – significantly less than any other sector. Of the other sectors surveyed, airlines were found to be the most likely to provide customers with complementary products or services (85.7%), followed closely by travel (83.3%) and financial services (69.2%).
Overall, of the retail businesses that do offer add-ons or enhancements to their core products or services, all believe that these products ‘very much’ differentiate their business from the competition.
The study also revealed that 66.7% of respondents regard acquisition of new customers as ‘very important’, while 57.1% view retention of existing customers as ‘very important’. Brand differentiation and extending brand partnerships are the lowest priorities for retail businesses, with only 16.7% of people respectively considering these ‘very important’.
Janet Titterton, business development director, Collinson Latitude commented: “In what is an extremely competitive retail environment it is surprising that retail businesses appear to be relatively unconcerned with developing products that will add value to their customer proposition. Trusted retailers such as Tesco have proven the success that can be achieved by diversifying a brand’s core offering to include a range of products that are closely linked to many aspects of people’s lives.”
She added that the fact that less than half of businesses in the sector offer currently do this demonstrates that there is a huge opportunity for retail businesses to develop unique incremental revenue programmes. These will enable them to add value to the customer proposition in order to drive both loyalty and revenues.
Over 180 marketing and brand professionals from a range of industries, including airlines, financial services, hotels, publishing, retail, telco and utilities, took part in the survey, which sought to identify what value-add processes brands have in place and whether brands believe that these are beneficial to their customers.