Aside from excitement related to the Olympic Games (see previous blog post), the British nation is feeling a bit sorry for itself. At the end of April 2012, it was declared to be in a double-dip recession and the unemployment rate over Q4FY11 was at its highest since 1995. Pretty grim, and this is for a nation which doesn’t always see the glass half full at the best of times.

All this has had a substantial impact on UK retail; a -2.3% slump was reported at the end of Q1FY12. The Technical Consumer Goods (TCG) market in particular was extremely disappointing (according to the latest TEMAX report (1) ). Market volume fell by -7.2% year-on-year which was the lowest Q1 turnover in the past four years. The only growth was in the IT industry, which is largely attributable to innovation.

By Ryan Garner (GfK) and Alex Kozlof (IAB UK)

The irrepressible tide of smart, connected, mobile devices is changing the way we shop at every stage of the purchase process. This poses new opportunities and challenges for product marketers and retailers in both the online and offline world.

The ‘always on’ nature of smartphones – not just in your pocket but also connected to the internet – makes them the perfect companion for shoppers throughout the entire purchase journey, both online and offline.  Recent research by the IAB and GfK shows that while PCs (laptops and/or desktop computers) are still the most used devices throughout the online purchase process, smartphones are an increasingly important complement to existing methods of shopping. The number of shoppers using smartphones will inevitably increase, but this usage will in many cases be in conjunction with the PC or an aid to the consumer while in store. Indeed, the research showed that the most common behaviour was for the smartphone and PC to be used together in the purchase process rather than independently.

In an age when consumers research their purchases thoroughly online, talk to their friends for recommendations, and test out their potential purchases in store, exactly what role do store staff have to play beyond facilitating the experience? Recent research by GfK shows that the suitable mix of in-store recommendations and demonstrations, achieved by store staff training, can be highly effective at increasing sales.

A new GfK research programme has provided some unique insights into the ROI of store initiatives by combining mystery shopping results with individual store-level sales data. The programme reveals how the in-store experience translates into sales and shows the average uplift in sales resulting from different types of in-store activity. This is highly useful for brands that want to understand how to prioritise in-store marketing budgets, benchmark against competitors, negotiate better rates for display space, and calculate the ROI on in-store marketing spend.

So what are some of the key findings of this programme that are useful for marketers?

The pressure on offline retail is growing with online retail’s move onto mobile platforms creating instant price transparency. The GfK finding that customer journey patterns are mixing online and offline in the purchase process means that retailers now need to invest in a truly omnichannel approach where both online and offline retail complement each other. By taking this creative route, bricks and mortar will continue to have a successful role in the market for tech products.

There is little doubt that online now forms an integral part of the retail experience for many consumers, particularly in Western markets.  In 2011, UK online trade accounted for 12% of all retail, the highest in Europe[i], and this trend only looks to increase with the inexorable rise of mobile commerce that recently achieved the milestone of over 5% during Q4 of last year[ii].

Using the internet for retail has become so commonplace that for many, the added benefits of convenience, easy research ability, and price comparison tools outweigh the effort required to physically visit the traditional bricks-and-mortar store.

But is online delivering everything consumers need from a shopping experience?  As we move further into the digital age, consumers expect a personalised, tailored and social shopping experience regardless of the medium through which it is conducted.

(You can read the full version of this article in the latest edition of GfK TechTalk here.)

As consumers, we’re handing over more and more data about ourselves in exchange for products and services we take for granted. It’s this individual-level data that’s likely to provide the next generation of recommendation models, and the user experiences they fortify.

Recently, for the first time in ages, a friend recommended an album to me and I went straight out and bought it. No listening to samples on iTunes, no streaming on Spotify, no whatever it was that we did before these formats existed – just me and my credit card. As it turned out, the album was disappointing. I don’t want to point fingers, and I’m not going to bore you with what it was, but it did spur me on to think about how the role of recommendation is being changed by technology.