RetailTechNews’ weekly roundup brings you up-to-date research findings from around the world. In this week’s edition: Always-On Sales Are Damaging Profits; Rift Between Brand Offerings & Consumer Desires; and Adopt AI or Die.
Always-On Sales Are Damaging Profits
Retailers should consider ditching discounting as 53% admit ‘always-on’ sales are damaging profits in a new study by Klarna.
The research shows that discounting is no longer confined to the traditional winter and summer sales. The new rules of retail mean discounting has become a fluid and unpredictable phenomenon – with over half (57%) of consumers expecting regular sales.
Over one-in-10 (11%) say discounting cost them over £25,000 throughout 2017. This isn’t felt just by smaller retailers, but merchants of all sizes – in fact, it’s those with 100-239 employees that feel the burden most, with 66% saying constant discounts are impacting profits. The e-commerce channel is particularly vulnerable, with 56% of retailers saying the majority of their discounted transactions come from online trade.
To better understand this sales spiral, Klarna also surveyed consumers to discover the psychology behind customer attitudes towards discounting and how it influences buyer behaviour. The results showed that 18% of respondents only shop when there is a sale on – with millennials (23% of 25-34 year olds) and gen Z (22% of 16-24 year olds) most likely to wait for sales to shop, compared to 11% of over 55s.
Rift Between Brand Offerings & Consumer Desires
Marketers still aren’t getting personalisation right. There is a disconnect between marketers and consumers, with brands failing to understand what their customers want from personalisation, new research from Epsilon has revealed.
The personalised experiences most wanted by consumers are customisation and service, with a third of consumers (32%) wanting brands to suit something exactly to them and their needs, and another third (32%) considering service, a company knowing their likes and dislikes, as the most important aspect of personalisation.
However, this does not correlate with the personalised experiences most commonly offered by brands. Brands aren’t focusing on customisation and service, but are instead providing consumers with discounts and rewards programmes (31%) or simple recommendations based on previous purchases (22%). In fact, both of these factors are considered far less important by consumers (16% and 8%, respectively).
Furthermore, beyond brands getting personalised experiences wrong, the report also reveals that almost a third (27%) of consumers feel that brands aren’t improving their personalisation and almost one-in-10 (7%) believe brands are actually getting worse at personalisation.
Adopt AI or Die
Two-thirds (66%) of senior IT decision-makers believe failure to adopt artificial intelligence (AI) will lead to a loss of competitiveness, research by Feefo finds.
Almost all (96%) also say that AI will have a positive effect on customer engagement in their organisation, while 45% believe that personalisation is where the biggest gains will be made. Six-in-ten (61%) respondents say they are using, or will use, AI for customer service analysis and intervention.
Almost half (46%) said their organisation is using, or plans to use, AI to provide personalised summaries of online reviews, with 100% in the accommodation and food sectors saying they will use AI in this way.
The survey found that, while 42% of IT chiefs selected chatbots as the AI technology they are using or will use, 53% want to use AI’s predictive capabilities to engage with customers by anticipating their requirements.