This year sees us celebrate 40 years of market research and customer insight. Last week, we saw how the competition and the rise of marketing in the 1970s resulted in a healthy 1980s. Today, we look back at how the sector helped lift the UK out of recession in the 1990s and the dawn of online shopping.
Early 1990s: Back into brief recession
The new decade brought with it more economic hardship as the UK was plunged into recession again. Faced with high interest rates and falling house prices, consumers tightened their belts and retailers did the same. In a bid to cut costs, and pass savings on to customers, retailers looked at the supply chain, making changes in operations and management as well as developing new strategies such as category management.
In addition, the rise of shopping centres and out-of-town retail parks gave retailers greater economies of scale. These developments, facilitated by the commercial property sector and supported by local and central government, led to a more car-dependent society.
Data marketing, which was in its infancy in the last decade, became more sophisticated as retailers analysed transactions and used focus groups to find out about customers’ attitudes and motivation.
There was also a proliferation of loyalty cards, which not only offered rewards for spending but also gave retailers an insight into customers’ behaviour.
Mid 1990s – 2008: The halcyon years
Retail was credited with dragging the UK out of recession. The sector became a national success story as consumer spending fuelled the economy. Thanks to the availability of credit, people could now enjoy a higher standard of living and this was reflected in the number of ‘mass luxury’ goods available.
The process of market consolidation continued at this time, with some retailers taking a dominant position, for example, by the year 2000 seventy per cent of UK sales were generated by the top 100 retailers compared to 29,000 retailers in 1971. Many retailers also moved from national into international markets.
This period also heralded the start of online shopping. In 2006, it accounted for three per cent of retail sales and the industry developed strategies to integrate information and communication technologies. Online shopping also meant power shifted further from the retailer to customers, offering them more choice and better value.
Next week, we’ll take a closer look at the credit crunch and the way in which retailers focused on creating a more personalised service for shoppers.
