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GUEST COMMENT Customer experience – where do we go from here?

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Much is spoken about placing customers at the centre of a retail operation. There’s plenty of evidence that businesses are making smarter decisions by moving away from price wars – many across the industry are investing in and changing the in-store and online experience as they get to know who buys from them. So what’s next – what are today’s challenges when it comes to retaining shoppers?

The modern consumer has extremely high expectations of the brands and retailers they shop with. They expect a seamless experience across multiple channels and for brands to engage with them on a personal level, tailoring the shopping experience to their personal needs.

Retailers that offer the best shopping experience will ultimately gain loyal customers with a higher lifetime value and market share from competitors.

A loyal brand customer is far less likely to be driven by price, but more by the emotional value of the purchase – how it makes them feel and the positive impact of their purchase on their lifestyle.

As the economy recovers, the increase in disposable income expenditure won’t see a return to pre-recession habits where purchases were of brief disposable value. Instead, consumers are prepared to use the channels available to them to consider their purchases in far more depth. They are prepared to pay more for the right product that will give them longer term value.

For this reason, it’s become important for retailers to understand the experience their customers want – both during and after purchase – to ensure consumers buy from them time and again.

Changing consumer habits are giving retailers no choice but to improve the shopping experience across all channels. Larger retailers are creating customer experience roles and teams within their organisations and tasking them with leading change.

The first step for many retailers has been getting customer service and logistical elements in shape. Better stock management and access, fast and low-cost delivery, click and collect services and efficient and caring customer service are all good housekeeping measures that help retailers increase conversion and retention.

Once stock, delivery and support ducks are in a row, what’s the next level of customer experience retailers should aspire to?

Effective insight and personalisation

Retailers now need to start taking the time to really dig into who their customers are, why they make purchases, what they care about and how they want to engage with brands they shop with.

No longer is it enough to provide the same store or online experience to all customers. People are starting to expect a personalised shopping experience based on how they want to shop.

It’s widely acknowledged there’s a huge amount of data and insight now available to retailers: transactional data will tell you what your customers have bought and when they made a purchase, website analytics will tell you how customers are behaving on your site, instore data collection will help you understand which of your online customers shop in-store, while email data will tell you which of your customers continue to engage with you online.

Using this data to split customers into segments allows retailers to start defining different types of people that shop with them and tailor each experience. For example, defining who your most profitable customers are allows you to offer them a VIP loyalty programme, and defining inactive shoppers allows you to re-engage appropriately.

Splitting your customer base into segments using data is no new discipline. Many direct retailers have been doing this for years to enable them to send the right catalogues to the right people, but it’s only in the last few years that online retailers have begun to follow suit by segmenting email programmes.

However, customer segmentation is only the first rung on a truly tailored experience ladder. Once retailers have split their customer base into useful segments, the next step should be to find out more. Retailers know how people shop with them, but they should also aim to find out deeper information including demographic, personal values, wider online and offline shopping habits and media consumption.

This information can lead to marginal gains across the shopping journey. The broader picture you have of the lives of your customers, the easier it is for you to start tweaking your customer experience across all digital touch-points. Producing editorial emails that resonate with individuals’ lifestyles and hobbies, creating engaging content about the brands they buy from in relevant publications or printing catalogues that focus on the types of products they frequently buy are a few examples.

Using both quantitative and qualitative data to personalise each digital channel so they meet the needs of customers is now the holy grail for retailers.

As a result, a number of data driven personalisation products and services have begun to appear on the market. Recommendation engines on websites have been around for a while, but now retailers can start to change the look and feel of a site according to their customers’ previous shopping habits, or remarket to them around the web based on the activity they carried out on site and the products they are most likely to buy.

Instore beacons allow retailers to track if a customer has entered a store, which can be used to send bespoke offers according to previous shopping habits.

Email programmes are now clever enough to show different content according to the time of day the email is opened, such as current stock availability or even the weather.

It’s a brave new world for retailers and the pace of change driven by the needs of consumers is huge. Retailers should focus on the best ways to start personalising the experience they give their customers: the first step is to take a step backwards and begin to understand them more.

Personalisation on a one-to-one basis can only ever be data driven, but there are plenty of things you can find out about a particular type of customer that will allow an element of broader personalisation, leading to increased acquisition and retention.

Don’t be afraid to ask. Use the data you have available to split your customer base into useful segments and create surveys to ask them who they are and what experience they want from you. Start to make changes segment by segment, channel by channel and test, refine, implement, then move on.

Shoppers’ interests will still be at the heart of 2016’s customer experience challenges, but this time it’s personal.

Rosie Freshwater is MD of retail marketing agency Leapfrogg

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