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Managing your customers’ expectations after Brexit

Managing customer expectations after Brexit

Brand loyalty is all about careful expectations management. That could be crucial after Brexit, says Paul Martin, UK Head of Retail

Paul Martin

UK Head of Retail

KPMG in the UK


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Managing your customers' expectations after Brexit - illustration of a smartphone

Brand loyalty is all about careful expectations management, says Paul Martin UK Head of Retail

As customers, we’ve never had it so good. Fresh, perfectly ripe, peaches in December? A jacket chosen online today to wear tomorrow – even, in some cases, later today? We’re spoilt for choice. From the ‘changing room at home’ and click and collect, to season-agnostic product ranges, extended Black Friday discounts and free returns – the customer’s wish is now the retailer’s command.

All that could change overnight if the UK and the EU don’t agree a trade deal. WTO tariffs would spell higher prices for consumers, while the end of friction-free borders could disrupt the well-oiled supply chains that now enable rapid product fulfilment from all over Europe.

Savvy customers now take for granted quality, choice, price and speedy, reliable delivery. Fail on any of those counts due to a lack of Brexit planning and many are likely not only to vote with their feet but also to voice their frustration on social media platforms as they go.

Meeting customer expectations has never been a higher priority for retailers, according to a new report from KPMG Nunwood. Ranking the UK’s top 100 brands according to customer experience excellence, the research showed that only 8% saw an increase in their score in 2017, largely due to soaring customer expectations. And consumers won’t just be rating you alongside your competition, but also against, say, their favourite airline or energy provider.

Then there’s the mounting pressure on UK consumers’ wallet due to price inflation and wage stagnation. Research by KPMG Global Customer Insights indicates UK shoppers are now spending as much as 76% of their disposable income on necessities, with retail sales of non-food items in the year up to October 2017 declining a record 2.1 %.

So where does all this leave retailers, already buffeted by low margins, increased costs and intense competition on all sides?

Six steps to keeping happy customers

1. Shine a light on your supply chain

Scrutinise the entire journey of your products from source to customer, identifying where the challenges to your business model lie and how these could affect your customers. Assess which of your products are particularly at risk in terms of price and availability, due to import duties or ruptured supply chains.

2. Know your customers

A myriad of influences shape customers’ behaviour and purchasing decisions – when, where, why and how they like to shop – what we’ve termed the the Five Mys. Analyse the drivers behind those decisions so that you can harness that information in any future re-moulding of expectations.

3. Clearly set out your stall

Be honest about what you calculate you’ll be able to deliver after Brexit. State the direct correlation between Brexit and longer delivery times, rising prices or a slimmer product range so that your customers understand the background to any changes. If you’ll no longer be able to deliver fresh peaches in December, say so.

4. Keep the conversation flowing

Devise a structured communication strategy that traces the customer journey right back to the initial purchasing decision. If you’re offering a choice between charging more for next day delivery versus less (or no) cost for availability in three days’ time, that needs to be spelt out not just at the point of payment, but across your advertising, advertorials, press campaign, mailers, email, social media channels and so on.

5. Tell it straight, if things go wrong

The customer is always right – and that’ll still apply after Brexit. If changed circumstances mean that you fail to deliver on your promise, respond immediately and in full. Consumers understand that some things are beyond your control – but they expect to be kept informed and to hear how you’ll put things right. What is your Plan B if things go off course? And if you need to reset expectations, do so with every intention of being able to exceed them.

6. Follow an ‘If you liked that, you’ll like this’ strategy

In some cases, you may end up offering alternative British products instead of the EU version – British rapeseed oil, for example, in place of Spanish or Italian olive oil with its 40% WTO tariff. Inevitably, that will require some customer re-education, with the encouragement to switch reflected positively everywhere from your product packaging and store and website layout to the photos on your search engines.

The clock is ticking

There are now just fifteen months left until Brexit. Not much time, when you consider that changing your consumer messaging – and vital contingency planning, such has setting up potential shadow supply chains – all has to be done alongside the day job. And that’s without adding in the new regulatory and compliance-related measures such as GDPR and IRFS 16 retailers also have to deal with, plus a range of structural issues within the
sector. Today is the time to start planning not only how to manage customer expectations – but how to outstrip them.

© 2020 KPMG LLP a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

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