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Why Customer Experience Is the New Retail Battlefield

Lihi Pinto FrymanLihi Pinto Fryman | September 30, 2017

There is an adage that the customer is always right, which was circulated to generations of both consumers and retailers. Yet modern, empowered customers have largely seen it for what it is, recognizing it for a disingenuous phrase often resulting in delivering poor customer service. Now, the consumers are back with vengeance, demanding to be put front and center of the entire retail business, in exchange for driving revenues and allowing retailers to stay afloat. Companies bowed down to these demands and turned the retail industry into a veritable battlefield centered on customer experience (CX) as its fuel. As all battlefields feature both winners and losers, you will do best to learn as much as possible about its nature in order to emerge victorious.

Rise of The Empowered Customer

In any case, you can safely say that going after customer experience in retail, as a primary marketing objective emerged parallel to the rise of so-called empowered consumer. This brand new type of customer represents a blend of an evolution of technology and a major shift in the buyers’ perception of themselves. Now, they basically see themselves as centerpieces of interaction between the retailers’ offer and their wallets. Faced with an abundant selection of products and services of similar quality, these customers now shop for experience instead of going after goods per se. At the same time, being “good” at interacting with them will simply not cut it, as the customers’ expectations have become increasingly sophisticated.  

This sophistication meant that the rise of technology impacted the retail industry the most. As device usage recently lead to the number of gadgets exceeding the number of their human users, a new generation of users now demands the fusion of their digital and physical shopping experiences. The rise of the empowered user meant that shopping online or via apps on mobile devices becomes an increasingly dominant trend, putting visits to traditional brick-and-mortar retail shops into the realm of nostalgia.

Parallel growth of omni-channel shopping prompted retailers to rightfully ask themselves if this means that their entire interaction with the buyer needs to be redesigned from scratch with customer’s journey now going in directions largely missing from traditional marketer’s maps.

Mobile devices per business user[There are more mobile devices than humans in the world Source: Connected.uk]

Have My Data, Personalize My Offer

Emergence of a new generation of consumers who demand putting the customer back in the middle of “customer experience” is hardly a one-way road, as their interaction with leading brands means generating huge amounts of data on their shopping preferences and behavior. And yes, they are currently more than willing to share this information with retailers, which currently accounts for 63 percent of millennials and 58 percent of GenX consumers.

However, this comes with a demand for companies to do something for them in return, and that is to offer them personalized offers based on generated data. More than half of consumers stated that they want companies to give them proactive shopping suggestions by means of predictive intelligence.

In the case of clothing retailers, for example, focusing on user experience in this regard means gathering data that will help customer spend less time browsing online and sending them personalized offers based on data about their measurements, gender or age. This can be expanded by taking note of the customer’s geographical reach, and tailoring shopping suggestions according to the climate, seasons and other related parameters.

Chatbots are an emerging technology based on AI-powered programs simulating conversation with human users which, in case of retail, play the role of virtual sales assistants. Based on the user’s prior purchase history, chatbots provide them with shopping suggestions, instead of relying on offering just generalized best-selling products. In this manner, they boost retail customer experience by giving it more of a hands-on flavor, which can only improve over time as chatbots learn to improve themselves based on earlier interactions.

As the customers want to feel personally engaged, sending them newsletter offers based on prior purchases will hardly take much of your efforts or resources. This is best coupled with engaging them online via social media they already use, such as Facebook, Twitter and other platforms which can be utilized not just to ascertain their needs, but to respond to complaints and deliver announcements as well.

Do You Win a Battle or War?

For all that is said here, it is evident that the customer experience battlefield has created at least one additional conflict for companies, and this one means resolving the opposition between short-term and long-term approach to winning this war. As marketing is at the forefront of customer experience improvement efforts, both marketing and customer managers have to fight to win on a daily basis, as well as invest in a long-term “victory”. This has led to shifting priorities in terms of focusing on either faster access to revenue or having a customer at your side in the long run.

As the customer experience assumes a central role in all interactions both prior to and after sale, its ubiquity means that achieving long-term results means counting on securing customer loyalty and advocacy. This promises a lot in terms of financial benefits, as satisfied customers were found to spend more than double compared to unhappy ones. At the same time, recent research showed that marketers are still willing to focus on short-term efforts in order to earn a quick buck, thus risking to lose the battle for customer experience in the long run. Consequently, careful balancing of these two approaches can make a difference between laying down your weapons and turning a customer into a valuable ally, with 72 percent of them willing to do your marketing job for free.

Conquering All Channels

As the need arose to redesign retail value chain as a whole, products and brand loyalty were relegated to secondary posts, with customer experience emerging as a focal point of all marketing strategies. This led to splitting of commerce efforts into three distinctive branches which still need to deliver synergy and a holistic approach to customer experience. While traditional commerce relied on word-of-mouth recommendations and brand loyalty, e-commerce created a customer who relied on online reviews and social media as well. This finally led to the emergence of digital commerce as a fusion of physical and virtual shopping experience, with its outcome depending on numerous factors which, taken together, constitute customer experience. These factors are (but not limited to) the intuitiveness of the user interface, including the dreaded unresponsive gestures, personalization of content, spam or ad annoyance, or quality of the checkout screen, to name a few.

Just as digital commerce unified traditional and e-commerce, its proper functioning necessitated merging functions of various departments within a retail unit. Store management, marketing, financial and human resources departments now need to operate in unison if they are to deliver on promised customer experience. Therefore, retail organizations need to adopt both a more agile and unified approach to best respond to fast changes in trends, while customizing their offer according to local needs and demand. This can be achieved only if various departments of the retail chain share data on customers they “study” on a daily basis, while effectively blurring or removing the line between physical and digital retail channels.

blurring or removing the line between physical and digital retail channelsSource: Vimeo

Wrap-up

Although you can say that fighting over offering increasingly better customer experience has engulfed all industries, the retail sector seems to be the best one to observe its changing fortunes. Its immediacy in dealing with a new breed of empowered customers has discovered several demands that are served before retailers in exchange for money and loyalty. These include personalized shopping suggestions via newsletter, use of new technologies such as chatbots which can utilize prior purchase history to come up with customer-focused offers, enhanced presence on social media as platforms for engaging customers directly, as well as focus on digital commerce across channels and a holistic approach to working with various retail departments. Now, what stands between securing a total victory and raising the white flag is your diligence in responding to the fast changes on the retail CX battlefield.


Lihi Pinto Fryman

Lihi Pinto Fryman

Lihi is the CRO and one of the co-founders of Syte. She is passionate about inspiring positive experiences through creative ideation.

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