PwC warns midmarket firms to focus on customer value
Thu, 05 Nov 2009
Midmarket retailers may need to place a greater focus on providing customer value in the future, based upon current shopping trends, it has been claimed.
According to a new study conducted by PricewaterhouseCoopers (PwC), the downturn has brought about a change in the way consumers perceive 'value' and spend money.
The report claims that over 70 per cent of consumers who have traded down to lower-priced items for some or all of their groceries, and 60 per cent who have done so for clothing, will continue to spend less when growth is restored to the economy.
Indeed, 78 per cent who have bought cheaper grocery brands believe they have received the same or better value from such products.
Mark Hudson, retail and consumer sector leader at PwC, said the last recession sparked "the birth of the value sector", which now makes up around 25 per cent of the total retail market.
"This recession is fortifying the concept of value and firmly establishing it in the consumer's psyche," he added.
"Competitors in the premium and midmarket are banking on consumers trading back up when times improve, but the value sector will continue to thrive, because customers have sampled what it has to offer, and they like what they have seen."
In many consumers' minds, cheap "no longer means nasty", Mr Hudson suggested.
Back in June, budget high-street retailer Poundland reported a 47 per cent rise in annual profits for the 2008-09 financial year.
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