Retail Stars Blog Series - Quality & Trust

Every aspect of retail from stores to marketing campaigns to the product itself, shapes the customer experience. In a competitive and globalised market, quality and trust are integral components in creating long standing relationships between retailers and customers but they are also key differentiators. Consumers are increasingly thoughtful in where to spend their money and for retailers to gain their loyalty, they should consider three key themes:

1. Don’t be all things to all people and understand what matters to your customer 
2. Strive for visibility and transparency of your supply chain
3. Deliver the quality promise that you market

Don’t be all things to all people and understand what matters to your customer 

Retailers need to understand what customers want and how they can deliver it. With greater information shared between shoppers (from product review websites to Twitter feeds), retailers should be proactive in how to drive engagement and harness insight to improve their strategy and operations - ASOS would be my #retailstar in this area. Not only does ASOS use Instagram as a platform to share lifestyle events and their sustainability agenda, but customers can purchase directly from an image or leave a comment asking about styling advice or missing shipments (and as they use a shipment partner to fulfill orders, this in itself presents a high level of reputational risk). 

Retailers are investing in CSR teams to set quality and trust strategies which should be carefully integrated into category strategies and aligned to commercial teams as a business partner rather than a routine compliance function. These functions do require investment, however, and taking one example, there is room on the high street for a ￡25 M&S cashmere jumper and a ￡600 Harrods high-end comparable. The challenge for retailers is how to align commercial strategies with responsibilities to society and sustainable farming. 

Strive for visibility and transparency of your supply chain

It is paramount for retailers to have visibility over their supply chain as customers look to know where products are coming from and that they are sustainably and ethically produced (pioneered by the likes of Stella McCartney, H&M and Vivienne Westwood and hashtags such as #WhoMadeMyClothes). There is mounting pressure on retailers to reconsider the information shared with consumers through their channels, campaigns and product labelling to make the experience as transparent as possible. Sharing data with customers is no longer considered a competitive disadvantage and certain brands have already been doing it for years - H&M, Nike, Levi’s, Patagonia to name a few. However, others remain highly protective with the view that “we don’t want our competitors getting our data”. Being transparent about the provenance of products is a core internal retail process and I think that retailers should be putting pressure on each other to open themselves up.

Supply chain visibility supports brand protection as much as delivering quality and trust with shoppers as counterfeit products now represent a $397bn global industry. Moving away from unique identifiers, brands and retailers from Johnny Walker to Macy’s to Lululemon are investing in sophisticated anti-counterfeit technology. In the luxury industry, authenticity goes beyond the initial transaction demonstrated in the growth of the second hand market and websites such as Vestiaire Collective (for some, Chanel handbags are considered a ‘nest egg’ for retirement). 

Technology can be successfully employed to track products as they move from raw material to the factory to the customer which supports anti-counterfeit practices but also inventory management and omni-channel fulfilment. Technology can range from the Internet of Things (IoT), Artificial Intelligence (AI), QR codes, Radio Frequency Identification (RFID) to Blockchain. While still in its infancy, Blockchain is being experimented with by Nestle and Walmart to track the origin and movement of stock at a transaction level, and in doing so, allows for greater control over safety, quality, authenticity, and supplier management. Ralph Lauren is pioneering Digital Product Identities (IDs) which will provide customers with reassurance over authenticity but also provide a means to enhance the brand experience through product information and styling tips that customers can reach by connecting through their smartphone. By ‘leading with digital’, Ralph Lauren can optimise operations and deepen brand engagement.

Deliver the quality promise that you market

Retailers need to have control over their supply chain and rigorous QA processes to develop each product to the intended standard, minimising the risk of faults or defects in production. Once basic safety and legal standards are met, the retailer has the option to position their products in such a way as to engage effectively with audiences. This is particularly important if used as a go-to-market strategy. Waitrose is a food retailer synonymous with quality and have positioned themselves as ‘custodians’ in sustainability. 

Stella McCartney is a #retailstar for championing a defined approach to sustainable fashion, investing in R&D to drive this forward (see our upcoming #retailstars Innovation blog to read more on this topic). Customers care less about a ‘Made in…’ label, and more about the social and environmental impact of production. Burberry, Kering and Inditex are a few of the major fashion brands that have signed up to industry-wide commitments to mitigate against climate change. However, these companies must be confident that their operations are aligned with their intended strategy to enable them to make the product in the way the customer is happy with or their reputation is at risk. 

What can other retailers learn from this?

Retailers need to understand how and when to differentiate themselves. It is important to regularly review strategy and operations to determine where on the ‘roadmap to success’ they are. How far off the mark are they from delivering their customer promise and where do they want to be in terms of CSR? With the rise of smaller, more sustainable brands (e.g. Veja and People Tree) the pressure is on for household names to adopt more agile approaches to sustainability or potentially face a loss in market share. 

How can retailers put this into practice?

If retailers want to be known for quality, value and trust, and build loyalty with their customers, they need to build a brand on the foundations of transparency and integrity (a concept that Jo Malone has championed for years). Control over operations is crucial in delivering a seamless omni-channel experience and to make sure that they can meet and exceed expectations.

I’d be interested in knowing who your Retail Stars are - join the conversation with #whoareyourretailstars and #retailstars