A critical part of engaging and retaining customers is creating a personalized and unique shopping experience. Additionally, industry trends are showing the increasing value of retailers focusing on an enhanced customer experience through proper data utilization.
During a recent virtual webinar presented by National Retail Federation’s SmartBrief, Brendan Witcher of Forrester Research shared the unfortunate statistic that while most digital professionals claim to invest in personalizing the customer experience, few customers feel that brands provide information that appeals to their tastes and interests.
What can retailers do to build a better customer experience? The first step is having a strong data strategy. In today’s age, customers are leaving a significant digital footprint that extends well beyond basic demographics. It is important that retailers design digital engagement tools that can act as data-capturing machines, and then use these tools to learn more about their customers. Additionally, it is crucial that a retail brand has analytics in place to analyze and extract valuable insights from the data. These insights can help a company curate an individualized customer experience. Consider the following example highlighted by Harvard Business School:
- International Coffee Company Rewards & Mobile App: Considered innovative at the time of release, the company’s app has acted as far more than a payment method and rewards program. It collects purchase data, such as a customer’s preferred drink and the usual time of day they make their purchase. The company then uses this data to curate promotions and suggest new products that appeal to customers’ tastes. Not only is this data-capturing system helpful in improving the customer experience, but analyzing the data collected from the app also helps the company determine future product offerings.
In addition to a strong data strategy, retailers should re-think the design of their physical store environments. Industry data shows that consumers still enjoy shopping in stores. In fact, a study conducted by IBM’s Institute of Business Value reported that 72% of consumers rely on physical stores as part of their shopping experience. However, the study also reported that consumers feel the in-store shopping experience could be improved and expect stores to incorporate digital tools. An example of a way that a store can digitally transform is through product reviews, which are shown to be very important to customers when making a purchase. However, most retailers only have product reviews on their websites. To bridge this gap, one major retailer added QR codes on each product SKU on shelves for customers to scan and read product reviews in the store. Other considerations for physical store transformation include:
- Virtual store associates: Supply store associates with tablets to connect with customers via video chat. Associates can showcase physical products to online customers.
- Interactive displays: Use augmented reality and touchscreen tablets to offer digital try-ons of products in-store, or touchscreen displays that customers can use to browse the store inventory or order items not in stock.
- “Dark stores”: Brick-and-mortar locations used solely for order fulfillment and not in-store shopping. Customers can order online and pick up at the dark store, or the product can be shipped from the dark store directly to the customer’s home.
- Ship-from-store & ship-to-store options: Using ship-from-store, customers place an order online and the order is fulfilled at the closest store, reducing shipping costs and improving shipping time. Using ship-to-store, customers place an order online and pick up their order at the store of their choosing.
- In-store app functions: Mobile check-out, virtual try-ons, and in-store navigation.
Most companies have organizational silos and lack sufficient cross-channel communications between the digital operations and store operations teams. Although we live in a digital world where customers’ browsing habits and purchases are tracked, physical stores still have the advantage of in-person interactions. Store associates greet customers the moment they walk through the door, and immediately engage with them by asking “How can I help you today?” They create an instant connection with the customer that can’t be replicated on the digital side of the business. Further, store associates can gather more feedback from customers who return products in store that they bought online. Therefore, leveraging store environments is critical to individualizing the customer experience. Retailers need to ensure the various channels are having continuous conversations to share what’s working, what’s not working, lessons learned, etc. Improving cross-channel communications is a vital part of providing an omnichannel experience to customers.
Digital e-commerce has exploded in recent years due to the COVID-19 pandemic, but many customers still enjoy shopping in stores. Both digital and in-store experiences have strong advantages and the capabilities to collect meaningful insights about customers. Unfortunately, many organizations are not building the right data strategy and, as a result, are delivering the wrong experiences.
So, How Can Brands Move Forward?
One way retailers can move forward is by creating a strong data strategy and implementing advanced analytics to better understand customers. Retailers should learn what customers love about their brand but also where their brand is not meeting the customers’ needs and interests. Doing so can help retailers identify and fix pain points, while also investing in the areas customers already love.
In addition, retailers should break down organization silos by identifying process improvements and implementing stronger cross-channel communications between the digital and store teams. This will help each team learn more about the customer as well as the effectiveness of promotions and marketing campaigns—which will then lead to learning how to better engage the customer.
Finally, retailers should leverage data gathered to invest in innovation and personalize the customer shopping experience. Having a quality shopping experience may help with customer loyalty to keep people shopping in-store and online.
Personalizing the customer experience will help increase customer engagement, decrease churn rate, improve conversion rate, and improve the overall effectiveness of marketing campaigns.
How FORVIS Can Help
FORVIS offers services designed to meet your needs. Our experienced retail team collaborates with other industry and service line professionals to increase the resources available to you and help identify solutions.
Our team is ready to offer:
- Performance & Process Improvement: FORVIS’ advisors can help your organization reach its business goals. Our process-first approach aligns people, processes, and technology to your business strategies and vision. We bring together industry best practices around process improvement, robust data-driven insights, and industry-leading technology. From enhancing cross-channel communications to removing organization silos, FORVIS can assist in improving business processes, outcomes, and customer experiences.
- Data & Analytics: Data is a valuable business asset that often goes untapped. At FORVIS, our advisors use the latest digital technologies and industry best practices to help realize the full potential of our clients’ data, affording them the opportunity to make smarter business decisions. From creating a data program and strategy to implementing business analytics, FORVIS can assist retailers in improving their data potential.
Reach out to a professional at FORVIS or submit the Contact Us form below if you have questions.