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DES GB2013 E

Price was by no means the sole determining factor in consumers’ selection of online retailers. Rather, retailers can escape price com- petition and set themselves apart from their competitors by offering a broader, more diverse range of products than consumers can find elsewhere. One aspect that is nearly as important to them is that the products can be delivered at any time or are in stock at the physical stores. In addition, since confidence in retailers also plays a key role in customer loyalty, investments made by those retailers in brand strengthening and differentiation pay off every bit as much as they do for brand manufacturers. Bricks and mortar stores remain a key factor in customer retention. If a favourite retailer were to close its nearest store, around half of German consumers would decide to shop in another of the retailer’s stores: 58% would shop at their favourite retailer’s next-nearest phys- ical store and 46% would find an alternative retailer selling similar products. Only just over a third of consumers (37%) would shift their shopping activity to their favourite retailer’s online store. An international comparison reveals that German online shoppers are less loyal to their favourite retailers across different shopping chan- nels. Average global consumers are more likely to switch to their fa- vourite retailer’s online store (44%) than to another retailer’s physical store (42%). While shopping with their favourite retailer is a key factor for international consumers, German consumers place greater value on shopping in a physical store. This can certainly be attributed in part to the dense store network in Germany, which generally makes it easy to find another location, but the finding also reveals that the online stores of German consumers’ favourite retailers are currently less attractive than their physical counterparts. This means that German retailers need to keep working on develop- ing both their brands and their products and services across all sales channels and to make these attractive to customers. The future belongs to multi-channel retailing, and almost all retailers need to operate both offline and online, and to do so actively. An individual on- line shop is not necessarily a must for smaller retailers if marketing and distribution can take place just as successfully through a coop- eration partner or marketplaces like Amazon or eBay. If retailers close a bricks and mortar store and can succeed in motivating fickle cus- tomers to shop at their online shop, they need not fear customers shifting to their rivals. An integrated, customer-centric business model (“total retail”) is es- sential for successfully generating customer loyalty in the retail busi- ness. This calls not only for an integrated sales structure and culture, but also for technological agility and a customer-oriented supply chain, to give consumers compelling access to the retailer’s shopping expe- rience across all contact points and end-devices. What would you do if your favourite retailer closed its nearest physical store? (in %) I would find my favourite retailer’s next-nearest physical store and go there I would find an alternative retailer’s local store selling similar products I would order (more) from my favourite retailer’s website I would find an alternative online retailer’s website selling similar products I would generally spend less on this type of product I would go onto social media and join the discussion about the store closure n=977 0 10 20 30 40 50 60 58 46 37 18 9 4 By Gerd Bovensiepen, Head of the Competence Center Retail & Consumer, Germany and Europe at PricewaterhouseCoopers AG, and Dr Stephanie Rumpff, Senior Manager, Retail & Consumer at PricewaterhouseCoopers Dr. Stephanie Rumpff Tel.: +49 (0)211981-2118 Gerd Bovensiepen Tel.: +49 (0)211981-2939 ABOUT THE AUTHORS DEUTSCHEEUROSHOPANNUALREPORT2013/SHOPPING 040

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