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What can the Financial Services sector learn from the high street?

by Anthony Norman , 24.06.2013

The way we shop has changed forever.  While some might view the decline of retail outlets on our high streets as a current blip caused by the economy, we believe that the high street will never be what it once was. Technology has been the key enabler here, offering the increasingly time-pressed shopper both efficiency and simplicity as they purchase. As consumers we can now ’one-click purchase’ across many websites and in some instances have our products delivered within one hour. In fact the only point that we need to get out of our chair is to sign for delivery. John Lewis and Amazon are shining examples of retailers who have focused on making the purchase journey easier for the customer, whether this is ordering, collection/delivery or the return of unwanted products.

In some cases the reason for the vacant shops that are all too familiar on the high street is that retailers have either resisted change, or failed to adapt fast enough to changing consumer behaviour. Comet suffered from a lack of differentiation combined with the growth of online offerings, and its high rents and decreasing margins made it impossible to compete - and there are other examples of failed high street retailers in recent times. Although shopping online still represents only a fifth of all expenditure for retail, this can vary dramatically depending on the sector. Books, DVDs and peripheral electrical items have a much higher internet penetration rate and therefore retailers of these items need to ensure their product mix is represented clearly both offline and online.

A number of years ago the term ‘multi-channel’ was the buzzword for retailers. This was replaced 18 months ago with ‘omnichannel’ which simply means that retailers - or any business operating a mix of sales channels - need to ensure a consistent message to their customer base, or put another way – alignment of their offering. Prior to this retailers had used differing pricing policies online from in-store, shop staff had felt they were competing with their own website for sales and the end result was a confused customer. As retailers have embraced omnichannel, the successful ones are starting to reap the rewards of happy customers with improved service and that all-important retention rate.

So if it works on the high street, what lessons can the Financial Services sector learn from the experience of the retail sector? One of the key lessons is ensuring a consistent message across all your communication channels.  Whether shopping for the best mortgage or for the latest tablet computer, people want the process to be simple, consistent and transparent.

In today’s omnichannel world customers have more control, and it is harder than ever to capture a sale or win a new customer. Financial services brands – like any business in this environment – must be innovative, need to respond to market and consumer trends rapidly, and crucially have to be consistent in their brand and communications. So why, as a customer at my bank, I should have to wait in a call centre queue three times to change my address with the mortgage team, the current account team and the insurance team is beyond me.  Make it simple or else the customer retention numbers will start to fall and suddenly your competitors will be gaining on you.

At the Destination Omnichannel event on 4th July I’ll be sharing the good and the bad of omnichannel on the high street and using those real-life examples to show why getting this right can deliver a huge competitive advantage for financial services providers – and getting it wrong, well that’s another story. Register here