Customer experience as the true differentiator
With increasing commoditization across industries and easy access to raw materials from any geography, product and pricing have ceased to become differentiators. Consumers are now willing to pay more for a better experience. Their loyalties lie with brands that delight them.
Accordingly, retail players across the world have started moving towards a customer-centric approach. As the focus is now the customer, brands have started upgrading their systems and processes to have a single view of the customer. The increase in sales of customer experience management software (CEM software) shows the gradual shift towards customer-centricity.
The explosion of e-commerce
Since its inception 20 years ago, e-commerce revenue and penetration have been steadily on the rise. Global e-commerce sales are continually on the rise and are expected to reach $4 trillion by 2020. E-commerce is one of the most rapidly-growing sectors worldwide, and has potential to expand into a whole new set of industries. The convenience that online shopping offers has been unmatchable – customers shop from the comfort of their homes, they can instantly compare features and pricing with competitor products. In a lot of cases, it turns out to be cheaper as well. A retail brand too can collect a lot of breadcrumbs of data when their customers shop online.
Online shopping websites have also found to be influencing offline store purchases and visits heavily. There are still certain products where customers prefer to physically touch and feel the product before buying. And this is where e-commerce sites have a huge scope for improvement. Virtual dressing rooms, virtual mirrors are steps to replicate the offline shopping experience online.
The omnichannel approach
The renewed interest in pleasing the customer has forced brands to be present wherever the customer is. Customers engaged on multiple channels have proved to be more valuable than those who engage on a single channel. In addition to a physical store, most brands now sport a website, are active on a social platform and possibly, an app.
Brands do not shy away from reaching out to customers and prospects on social media. As more and more customers use social media to vent their concerns, brands are making use of the space to proactively resolve customers’ issues.
Evolution of customer loyalty
Loyalty programs are designed to encourage customers to move ahead in the customer journey. In their simplest form, they were used to reward customers for spending a certain amount in the store. But today, brands use loyalty program to drive customers to do a variety of actions.
From points for social media shares that extend the marketing scope of a retailer to customer referrals that drive new customers and grow revenue, the options for customer rewards are almost endless.
Digital loyalty programs mark a new era in the field of loyalty programs. Not only are they more convenient – as they eliminate the need for physical cards, but also more personalized. They offer deals and rewards based on the user’s purchase history, browsing habits and preferences.
Technology shaping the retail stores
As e-commerce started taking the lion’s share of the retail market, brands have started looking at alternate ways to make brick-and-mortar stores more engaging. An interesting trend here is the transformation of physical stores into experience zones. After all, the only way to justify a customer traveling all the way to your store is to provide him with a unique in-store experience.
While companies like Rebecca Minkoff do it big, there are a lot of stores that are doing a lot of small things to ease customer’s buying process in physical stores. Google’s Project Tango is doing a pilot with a few retailers to offer a solution where product information and promotions appear to “pop out” of the shelves as customers navigate to their desired product. Companies can also push personalized deals, reviews, recommendations when customers scan specific products with their devices. A lot of physical stores have enabled mobile payments as well.