3 steps strategy & insight teams should take now to help their businesses address Brexit
1. Ensure the business is positioned to benefit from significant changes in customer behaviour.
We expect rising prices will cause a shift in consumer behaviour, the same way we experienced following the 2008 downturn. Customers will once again re-evaluate where they shop, how they shop, what they buy and who they buy it from. In the short-term, most retailers expect to see inflation rise thanks to the lower value of the pound and the increased cost of importing goods. HSBC predicts the pound will drop to $1.20 USD by the end of the year. The government has also indicated it may raise VAT. Consumer confidence is likely to drop. Customers are likely to feel a squeeze on their household budgets once again. Retailers and brands are likely to face price pressure. In the longer term, if the UK loses access to the European single market (a question unlikely to be resolved in the next few months) retailers and brands could be forced to make structural changes to their pricing to take into account tariffs and higher costs of doing business. To address these concerns, we believe insight and strategy teams should be asking:
How might our customers change their behaviour? What are the alternatives already in the market and what innovation is happening that might pose a competitive risk?
How might we need to reposition our offer or marketing to address competitors offers as household budgets come under pressure? What are the opportunities to win new customers?
What happens if there is a significant drop in European customers and how can we position the business to make up for this in other areas?
2. Prioritise using customer and sales data to track changes in behaviour so commercial and marketing teams can respond quickly.
Uncertainty often creates confusion. Customer and EPOS data will become more important than ever, but using it in the right way is critical. We believe insight and strategy teams will need to re-evaluate many of their KPIs and prioritise tracking changes in customer behaviour to enable a quick response by the business. As we are unlikely to have answers to many of the structural questions about how the UK economy will look in 2 years’ time, uncertainty is likely to beget more uncertainty in the minds of consumers. Customer and EPOS data provides one of the best tools to understand immediately how customers are changing their behaviour. Because Brexit represents such a fundamental change almost immediately, one of the most critical tasks now is setting the right KPIs and tracking. We don’t know if behaviour will change suddenly, or slowly over the longer term. It’s important to put metrics in place now. To address these concerns, we believe insight and strategy teams should be asking:
Given the uncertainty caused nearly overnight, are we still using the right KPIs and tracking customer behaviour in the right way? How can we identify changes and flag these to the rest of the business?
Are we getting the most out of our data? Do we have data resources that are underutilised or not being used in the most effective way?
Are we tracking the right customers? Do we have certain demographics that are more likely to leave, or switch to us during a downturn? Which of our customer groups is most likely to be impacted?
Can we do things more cost effectively? If our budget comes under pressure can we get more from our resources and agencies?
3. Evaluate whether growth, marketing and sales strategies still make sense.
Brexit represents a massive change to the way the UK operates. It will likely be months or years before it is clear what relationship the UK will have with other European economies. Senior leaders will need to evaluate whether the strategies in place before Thursday still make sense. With questions about the UKs access to Europe unlikely to be resolved in the short term, most businesses will need to review the plans they have in place. To address these concerns, we believe insight and strategy teams should be asking:
Do we have short, medium and long terms plans in place for the various scenarios around a Brexit negotiation outcome?
How can we help the business deal with pressure on margins as costs rise
The Summerhill Group is a market intelligence and strategy agency for brands, retailers and start-ups.
The Summerhill Group was founded to help brands, retailers and start-ups grow their businesses through leading market intelligence and strategy advice. The company was created by a group of consultants who had worked on strategy projects with FTSE-100 leaders; delivered market intelligence for some of the UKs best brands; and either run or advised some of the UKs most exciting start-ups. This unique combination of market intelligence, strategy and start-up experience means our clients benefit from a unique perspective, and can be confident in our consultants, knowledge and expertise alongside our proven track record working with many of the UKs top brands and retailers. Affordable advice in uncertain times. The Summerhill Group is uniquely positioned to help the UKs top brands work through the implications of Brexit. We keep our overheads low which ensures we can keep our project rates in an industry leading position, particularly in a time of increased budget scrutiny. We are here to help. We’d love to have a chat if you feel we can help answer any of the questions we’ve raised or if there are other strategy or market intelligence projects your team is working on.
We'd love to chat about how we might be able to help: Phone: 020 3355 2060 Email: info@thesummerhillgroup.com Web: www.thesummerhillgroup.com