The Future of Post Covid Retail: A Retailer’s Customer Toolkit
Customer experience has become a cornerstone of retail; it’s something that brands are measured on and that customers demand. Whether on or offline, it can be the difference between a high-value shopping bag and a lost customer, not to mention the reputational impact across platforms like social media.
Just ‘good enough’ customer service isn’t good enough anymore; retailers must work even harder to understand what’s important to their target customers and then deliver this across all of their channels.
Interestingly, for now at least, this must be delivered against a backdrop of getting a customer in and out of a store as safely as possible to ensure Covid-19 compliance. Whilst it is likely these measures will be relaxed and possibly even removed completely as the presence of the virus recedes, new buyer habits will have formed and expectations once again shifted with regard to physical shopping, especially in light of the improved online experience now offered by many brands.
Every interaction a customer has with a retailer must be carefully designed to deepen the relationship with the brand, with a permanent eye on customer loyalty and retention. Continued investment in technology, people and processes to drive change and adapt to the fluidity of buyer behaviours is key to transform transactional customers into brand advocates.
Truly understanding customers is going to be critical going forward. Big data, an aggregation of the digital footprint of individuals, will be a key source of understanding about customers. Detailed analysis of this level of data can provide crucial understanding, including demographics, geographic location and how individual customers are interacting with a brand. This can help retailers develop deeper and richer profiles of their customers to help define the most appropriate, and effective, engagement activity.
In addition to enhancing the relationship with existing customers, a better understanding of big data can help profile future customers. Using data to identify characteristics of current valuable customers and then applying predictive marketing as well as using data from sources such as website analytics and social media metrics, among others, will produce further data that lends to developing new target customers.
An insights-based understanding of both current and future customers will support the development of more personalised engagement and marketing campaigns. More focused, relative and purposeful messaging can be developed on an individual customer basis, leading to improved brand equity and more importantly, conversions to sales.
It’s a difficult time to rely on face-to-face conversations driven through engagement with store personnel, so more focus needs to be placed on how to create long-lasting interactions in the digital space.
During their prolonged time at home, consumers have become more willing and able to use digital methods of engagement. Those who are already familiar and comfortable with online are increasing their use whilst those who once resisted the likes of retail apps, mobile finance and video calls are emerging as digitally-engaged customers.
This change in consumer behaviour is evident across the entire retail landscape, from groceries to beauty, fashion to furniture. This is fundamentally changing the rules of engagement; customers are willingly sharing their personal details, likes and preferences, as well as voluntarily giving you permission to contact them, across websites, apps and ecommerce platforms. The emergence of these richly-populated datasets means conversations are increasingly becoming two-way and interactional, with the primary objective to build a relationship. A sale, for the first time, is not the only goal.
An interesting consequence of this approach is the role of the workforce in facilitating relationships; there are different skills involved in, for example, curating a sale from a contact centre versus the same activity on a video call or through an interaction on social media. This must be supported by a shift away from pure sales to the value of customer interactions. Technology solutions must be advanced to help free sales agents to focus more on developing relationships and delivering outcomes to their customers; less focus on the process enables greater focus on the customer, positioning retailers for success.
The loyal base
Building customer loyalty and engaging with those who remain advocates of a brand is nothing new; it’s a mechanism used across many different parts of retail to drive both engagement and reward. However, in an unexpected behavioural shift during the year, many customers have turned their back on favoured brands and instead have used the lockdown periods to explore alternative retailers and to experience a different way of interacting with brands.
The drivers for this are varied, but research suggests it could relate to issues of supply chain and product availability, unstable ecommerce platforms and poor customer service. Each of these pressures has caused pain points for the retailers and their ability to deliver for customers, whether loyal or otherwise, has suffered. Should retailers wish to retain a loyal base, they must concentrate on re-engaging them and re-prioritising them as an important customer segment.
Key to this repositioning the loyal base is understanding the drivers that are now important. Given the shift in buyer behaviour that this year has brought, it’s not going to be enough to simply rely on points per pound spend or ad hoc discount vouchers. A focus on health and safety in store, a belief that the welfare of employees is paramount and visible investment in customer experience are all going to be important as customers decide who their favoured retailers will be.
Back to basics – understanding what’s important
The customer is key; 2021 will be driven by what the customer wants, needs and expects. Retailers need to get ahead of this to make sure they are around to be part of the conversation
- Reconnecting with brand purpose: every interaction with customers and partners is a chance for retailers to demonstrate what is important to them and how their purpose aligns with that of their customer base. It matters how businesses are responding to the health crisis – how they are treating their employees and supply chain – and purpose-based retailers that are showing empathy and a human touch will likely emerge as the leaders.
- It’s good to talk: whether it’s reaching out to customers, attracting new ones or keeping employees up to date, retailers must make the effort to keep communicating. Retailers have an opportunity to create a new narrative for the future, learning from the past twelve months but putting this into context of how it is helping them grow and evolve as a responsible brand.
- Concentrate on new ways of working: customers are willing to change how they interact – they’ve demonstrated this over recent months. They will embrace a different way of doing things, from virtual changing rooms to video customer service calls. And customers are accepting of the challenges working from home and regional restrictions are bringing, but only when they can see brands making an effort to continue to be responsible, engaging and fair. Retailers who look to more agile and technology-based ways of continuing to interact with their customers will do well, but they must ensure it’s working for their customer base as well.
- Revisit inventory: customers expect that if an item is available to put in their basket, that it’s there for them to purchase. It’s critical that retailers assess their orders, inventory and service levels to meet this customer expectation and that automation is in place to communicate the purchasing journey at all points. Supply chain has been equally impacted by a tumultuous year and so it’s important that retailers are having the right conversations to ensure a return to more normalised operations.
- Keep the cash flowing: In uncertain times, companies often think about how they can best keep the books balanced with deferred and delayed payments often on the table. It’s likely that customers will be thinking about doing the same as they worry about balancing their personal finances whilst still needing to continue making a degree of purchases. Credit options can seem overly attractive, especially when offered with relatively low-cost items over a small number of payments, but this carrot must be tempered with belief that payment will ultimately be received. Collection processes, if relevant, should be reviewed in light of the current economic climate to ensure they are robust but fair and importantly should focus on individual circumstances.
As a new year approaches, retailers have the dual challenge of dealing with holiday peak and planning for a new, hopefully less disruptive year ahead. This year has highlighted that flexibility and agility are key and whilst hopefully buyer behaviours will settle down to something more predictable in the coming months, it’s likely that retailers will need to dig deep into their toolkits to ensure they are keeping up with what’s important and delivering this a way that goes beyond a simple transaction.
It’s a complex operating environment, further exacerbated by ongoing retail transformation and the pressure to embrace digital technologies as the new normal. The customer, whilst important, is only one element of success – supply chain, store portfolio, investment strategies, marketing reach – the list goes on. But get these elements right, and 2021 could be the year of opportunity.
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