Customer experience in retail has evolved from a vague subset of customer service to a strategic priority warranting dedicated business units. It is perhaps the largest driver of business for companies both big and small.
Enterprises are spending millions of dollars trying to answer the question of how to improve customer experience in retail stores and through digital channels. It’s time retail-oriented small and midsize businesses (SMBs) develop their own answers as well.
Having proper retail management software is a place to start, but where do you go from there?
In this article, we explore a Gartner report, titled “Implications of Customer Expectations on Retail Business Strategies and Technology Investments for Digital Business and Beyond” (available to Gartner clients), that looks at where retail is heading and what businesses can do to stay ahead of the curve.
Note: Some of these concepts might appear to require more resources than the average retail SMB has access to. But as these trends begin to set customer expectations, it’s important for small businesses to pay attention to them to remain competitive.
Here’s what we’ll cover:
From Shoppers to Loyal Customers to Brand Advocates
Support Behaviors to Resonate With Customer Lifestyles
Engage With Customer On Their Channels And Gather Meaningful Data
Be Aware of Emerging Customer Experience Trends
From Shoppers to Loyal Customers to Brand Advocates
The first area of customer engagement centers around something you should already be doing: social media.
Miriam Burt highlights the overwhelming power of social media in driving purchases and improving customer experience in retail.
“In the consumer survey [from the fourth quarter of 2015],” Burt says, “56% of consumers said they made a purchase because of something they saw on a retailer’s social media page. Retailers have begun to capitalize on this with noticeable increased activity on social media.”
Burt refers mainly to large enterprises with dedicated social media teams. But maintaining an active social presence doesn’t require a dedicated team. We’ve covered how SMB retailers can implement and measure meaningful social media campaigns.
Whether your business is large or small, you can leverage social engagement as a means of achieving customer loyalty and advocacy.
“The real opportunity afforded by the convergence of mobile and social is the ability to convert loyal customers into advocates or brand ambassadors in customer-to-customer networks.”
Miriam Burt, Vice President for Gartner Retail
As Burt describes it, graduating a loyal customer to a brand ambassador with a shared voice in promoting your company “is a very cost-effective form of marketing with a high ROI.” Customers authentically sharing their experience among peers can be very impactful.
Customers sharing positive customer experiences in retail reviews and on social media will influence future consumers’ perceptions of their own experiences.
Creating a team of advocates is an inexpensive, but highly efficient, marketing process. Here are some key steps to achieving a social strategy that drives customers from loyalty to advocacy:
Define success criteria for your social initiatives. Begin with a firm definition of success for this social initiative (i.e., drive $10K in sales from social conversions, achieve 25% increase in social posts referencing company, gain 10% increase in posts from unique social accounts).
Optimize shopping experiences for mobile. Customers increasingly use mobile devices to interact with social media and shop online. To capitalize on these sales, you need to optimize your mobile shopping experience. This includes optimizing your website’s mobile design and adding direct links to products within your social posts.
Leverage your most persuasive advocates. Your most loyal and vocal customers can provide you with high-impact marketing at no cost at all. Identify these users and approach them about formally joining your marketing program as a “brand evangelist”, as Burt puts it. You can incentivize them with special promotions from time to time or provide other benefits.
Support Behaviors That Resonate With Customer Lifestyles
When it comes to customer loyalty and advocacy, Burt points out that much of what generates these sentiments happens outside the shopping experience.
Retailers need to go beyond the “what, where, when and how customers are buying products and services” and consider “why they are doing so.”
By doing this, you can understand how your business supports your customers’ behaviors and lifestyles. She offers an example of how a retail business can support a family’s healthy lifestyle:
“[It’s] far more than just about buying fresh fruits and vegetables to make healthy meals,” Burt says. “It encompasses a lifestyle which will, at the very least, take into account healthy eating, regular exercise, education and clinical advice, and follow-up regarding preventive healthcare services. Further, introducing a major lifestyle change—for example, one brought about by a new baby—into the scenario of nurturing a healthy family will be much more than pushing offers on diapers!”
She explains that this process will require a more holistic engagement with customers, to encompass their lifestyle and goals:
“In this case, understanding what nurturing a healthy family means in the overall context of the lifestyles of a retailer’s customer base is what will enable the retailer to drive new ways to provide value to its customers.”
Customer expectations along these lines are evolving, but in time, they will significantly impact the structure of retail organizations, key performance indicators (KPI’s), processes and roles. Burt says a key component that’ll help businesses adapt to this change is a “rapid build up of high-quality collaborative ecosystems to take in partners that can service customers as they conduct their cross-industry lifestyle processes.”
Following the example above, a health food store might partner with a rock climbing gym. The gym might provide a popup wall for toddlers to play on at the store, while the store has a popup produce and juice stand at the gym. Going further, the two businesses could even partner with a chiropractor or holistic doctor.
Here are ways that you can help customers achieve their ideal lifestyles:
Dedicate time to understanding customer lifestyles. This could mean analyzing customer data from social, from your CRM, or even from surveying customers. Regardless of the source, you want to understand how your products fit into the overall lifestyle of your customers.
Form strategic partnerships with businesses that also support these customer lifestyles. Determine businesses that are adjacent to your offerings and target lifestyles. Setup partnerships and events that make sense for you and your partnering businesses.
Engage With Customers On Their Channels And Gather Meaningful Data
An essential part of understanding customer behaviors and lifestyles is having meaningful data. But this data isn’t just readily available. You have to work for it.
As Burt puts it, “excellent data management will yield competitive advantage. High-quality, well-curated multi-channel data will be the lifeblood of digital business for the optimization of business decisions.”
Collecting this highly valuable data requires retail management technology that can track customer purchase histories as well as meaningful interactions across all channels.
Burt emphasizes the importance of a multichannel approach to customer experience and data gathering. This, in other words, means being where the customer is.
Be Aware of Emerging Customer Experience Trends
As it becomes increasingly common for retailers to adopt a multichannel approach, new customer experience trends are arising, driving new expectations among consumers.
“Investment is slowly building up to incorporate and mine high-volume, high-velocity, and very importantly, highly complex and variable types of data and information for efficient and effective decision making,” Burt says.
“Although traditional data sources such as transaction and data logs still dominate big data processing efforts, technology investment is slowly increasing in a wider range of data types, including audio, video, image, geospatial and even 3D modeling data.”
It’s outside of the budget of your average SMB retailer to perform 3D modeling, but that doesn’t mean they shouldn’t invest in, setup, and monitor geospatial technology. This includes iBeacons and other such technology, which enable you to analyze a customer’s movement throughout your space.
You can tie this system to data channels, and also track and analyze online customer purchase and product viewing histories.
And while there is software out there that can mine social media for images and videos for your products, you can do this yourself by looking at followers’ recent posts. This is a fantastic means of generating new marketing approaches and promotional images, and provides another opportunity to engage with customers actually using your products.
This data can also have major implications outside of simply marketing. As Burt puts it,
“The important insights gained from such [data] investment is also feeding into other key areas of technology investment such as multichannel customer analytics and merchandise planning. The ability to use accurate and timely data to simultaneously plan merchandise assortments, purchases and inventory levels across all the channels.”
In other words, tools that gather and analyze meaningful data on the customer experience in retail stores and through digital channels are driving newer tools that build off this data analysis and provide greater insight into customers’ behaviors and lifestyles.
Nonetheless, there is a base software all SMB retailers need in place before adopting these new technologies and improving their customer service: a retail point of sale system.
- Adopt retail POS software: Most readers will have already adopted POS software for their retail system. This is the first step on your path to creating a better customer experience and meeting evolving customer expectations.
- Leverage social media to gain data: Once you have a POS system in place, you can get active on social media and find a way to make customer data meaningful beyond a single purchase. Social data can inform numerous business decisions that can help improve your retail customer experience.