liz claydon quote web

Traditionally, the Christmas period has seen discount grocers lose market share as many customers seek to push the boat out to impress family and friends. Recent IGD figures estimate only £1.7bn of the total £20.3bn spend on groceries in the weeks leading up to Christmas will be banked by the discounters.

For the big four, Christmas offers the opportunity to remind shoppers of what they have missed. Having focused largely on cutting costs and prices as a means of stemming the rate of defection, at Christmas they would do well to focus on customer experience.

Research by KPMG Nunwood’s Customer Experience Excellence Centre points to Six Pillars of Customer Excellence as a means of driving success: (1) Personalisation - using individualised attention to drive an emotional connection; (2) Integrity - being trustworthy and engendering trust; (3) Expectations - managing, meeting and exceeding customer expectations; (4) Resolution - turning a poor experience into a great one; (5) Time and effort - minimising customer effort and creating frictionless processes; (6) Empathy - understanding of customers’ circumstances to drive rapport.

These can manifest themselves in many ways: wider aisles; improved product choice; helpful staff; well-maintained facilities; coffee shops; and ample parking.

The discounters, on the other hand, will be hoping they don’t become victims of their own success. With phenomenal growth already putting a certain amount of strain on their infrastructures, the fear is the extra business volumes could test their resources to the limit, leading to overflowing car parks, clogged up aisles and disgruntled customers. The 10 days leading up to 25 December could be some of the most testing in their short UK history.

There is little doubt the discounters will continue to take share. However, there continue to be differing views as to where this share will plateau - anywhere between 14% and 20%.

If the big four can get the experience right in December and connect with shoppers beyond just price, customers who have refamiliarised themselves with such benefits may well return for good.

Liz Claydon is KPMG’s UK head of consumer markets