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The inconvenient truths (part one). Customers arenʼt cautious, theyʼre bored!

Thereʼs an awfully disturbing rhetoric sneaking into retail thinking at present that seems more like a ʻget out of jail free cardʼ to me than anything vaguely resembling fact. The ʻcautious consumerʼ line has been used by far too many CEOs as an excuse for poor performance and doesnʼt ring true for several reasons.

First and foremost there is the ABS all retail sales data that states unequivocally that Australian households are spending record dollars at retail. Same month this year versus same month last year comparisons are up. But not as much as volumes, which have increased by more than four and a half times the sales dollar increase.

Secondly, we see retailers including Supercheap Group, Coles, Apple, and Louis Vuitton all getting sales and profit traction.

Australia has full employment for the economic model we follow. Household income is at an all time high and thanks to government handouts and tax cuts disposable income is also high. Yes, cost of living is increasing. But at the moment, thanks to insane and unsustainable discounting at retail, households are spending less at retail and have been retiring debt.

Because they can.

Despite what consumer surveys say, customers spend what they perceive they can service.

When excited they will buy – not on discount – but because they are turned on by the product. Apple for one gets this. One million iPhones in the first weekend of release worldwide proves that when a shopper is engaged they will not only pay full price, they will cue up for access to the item.

We live in a world of 24/7 on. Attention spans have diminished and customers have an unquenchable thirst for new and different. Recency matters and pushing the adrenaline button is critical to fuel shoppers addiction. Without stimulation, consumers buy as they always have.

Today shoppers see little real differentiation and a retail world that has become more about shades of grey than bright colors. While retailers claim there is loads of choice, customers see a sea of sameness and relegation of customer experience to a transactional relationship.

In the fashion world we see an endless recycling of trends, sourcing based on price-points and marketing that all looks the same to the customer. And let’s be clear, upping the noise volume is not exciting customers. It is increasingly turning them off.

All the new communication methods we have at our disposal fit entirely with social change and provide a brilliant enabler for retail magnetism and consumer motivation. For the easily bored the media exists to excite.

But if the content isnʼt there, if the product isnʼt new or have a unique story to tell, not only is it missing the point, it will exaggerate the profit decline of the business as customers turn their back on the source.

Retail is at a crossroads. Not because of the internet but because the industry has failed to keep up with its customers and still insists on pursuing business models which magnify the problem.

Itʼs time to blow away customer boredom and make money. By creating exciting shopping experiences every day.

Peter James Ryan is Chief Executive Navigator of Red Communication Australia. Email:

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