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As digital-first shopping is here to stay, retailers must invest in connected experiences — and success hinges on frictionless operations. Let’s look at five ways retailers are building a better customer journey to grow in the new normal:
- Cohesive customer experiences
- Artificial intelligence-powered personalisation
- Revolutionised loyalty programs
- Real-time omnichannel engagement
- Unified customer data
Creating cohesive customer experiences
Today’s consumers expect more than just personalised experiences. More than 67 per cent attribute a contextualised, connected customer journey as being a key to winning their business.
This is particularly relevant in the retail world, where technology is blurring the physical-digital divide and disrupting how consumers shop from pick-up-in-store programs to cashier-less stores, mobile payments and digital wallet services.
The result is mounting pressure for retailers to deliver hyper-personalised, concierge-like shopping experiences with efficient handoffs between departments and channels before, during, and after a purchase.
While 88 per cent of retail marketers share integrated tech stacks with advertising teams, this alignment alone is not enough. A unified front has to span the entire customer journey. However, collaboration between retail marketers and their commerce and service counterparts is less common, with only about half saying their goals are aligned.
And consumers can feel it. Only 13 per cent believe that companies excel at delivering connected experiences.
To close this gap, 44 per cent of retail and consumer goods marketers say they are now leading customer experience initiatives across their organisations (versus just 24 per cent in 2017), and metrics are being shared. Sales effectiveness and customer retention rates — historically considered success indicators for sales and services teams — have reached the top tier of marketing KPIs, underscoring the evolution of cross-department collaboration to enhance the customer journey.
Building trust in AI-powered personalisation
In an era when opaque data-use policies have jeopardised customer trust, retailers are increasingly cognisant of balancing AI-powered personalisation with privacy.
In retail, AI use cases range from personalised product recommendations to chatbots that automate answers to questions such as “Where’s my order?”
This is generally well-received by younger consumers, including millennials and gen Z-ers, 68 per cent of whom say they prefer personalised shopping experiences that are based on their purchase history. In addition to driving engagement for retailers, AI-powered personalisation is also a revenue generator, since online shoppers who act on product recommendations yield 14 per cent higher average order values.
However, as data protection laws like GDPR expand universally, retailers are understandably concerned with how to move forward. Many have invested time and money into curating consumer data and building systems to offer personalised experiences. On top of that, another rising privacy concern revolves around how retailers are obtaining and using location data from customer’s smartphones to direct advertising strategies.
Retailers must delicately navigate the flow of personal information, with 89 per cent of consumers valuing transparency in how their data is used as a trust factor.
Revolutionising loyalty programs
In the past year, existing loyalty programs were put to the test by novel customer behaviours and expectations brought by the pandemic. While online shopping skyrocketed global digital revenues — by 71 per cent in Q2 2020 compared to the previous year — consumers are now more willing to change brands based on value, availability and convenience.
Loyalty programs have traditionally been transaction-focused and impersonal; customers earn points, redeem rewards, and the cycle repeats. Customer loyalty today, however, is extremely granular across all touchpoints. Generally, customers and brands engage in a value exchange, whereby the former agrees to share their information for personalised incentives catered to their preferences.
In this regard, retailers are re-evaluating and revolutionising their value propositions for higher customer retention. Loyalty initiatives are being embedded across the entire supply chain, from the frontline staff who bring loyalty programs forward to the merchandising teams that select products as part of a promotion.
In this digital age, customised experiences — from free shipping and sneak-peek product previews to personalised promotions and individualised incentives — all boost customer loyalty.
Driving real-time omnichannel engagement
To win sales and increase loyalty, retail and consumer goods marketers are engaging consumers in the real-time, omnichannel manner that they expect.
The gold standard is dynamic, two-way conversations between customers and brands, where messages evolve across channels based on the customer’s actions. This gives consumers a consistent experience regardless of their point of communication when interacting with a brand. Successful omnichannel engagement is easier said than done, however, as average consumers use 10 different channels to communicate with brands.
To this end, retail marketers are turning to established channels, such as websites, email and social media, and dynamically coordinating them with emerging channels, such as virtual assistants, augmented reality, and connected devices.
With 68 per cent of consumers saying cross-channel consistency is vital to win their business, the ability to engage shoppers where they are — no matter the channel — is increasingly critical.
Unifying customer data
Today, retailers have more data at their disposal than ever before. However, they are challenged with unifying that data from an average of 16 sources, a 60 per cent increase in just two years.
Data management platforms (DMPs) are gaining traction, however, broadening the use of this technology beyond its traditional use case of media buying and optimisation. Fifty-five per cent of marketers currently use DMPs with an additional 35 per cent planning to use them within the next two years.
This is unsurprising given the number of high-traffic systems that retail companies must manage, such as loyalty, point-of-sale, and commerce infrastructure.
To understand who customers are and what actions to take based on their unique needs, retailers are increasingly using second-party data — that which is shared between consenting parties like brands and publishers — to extend audiences and refine growth targeting.
As we enter the post-Covid world, retailers are responding with agility and resilience to navigate dramatic shifts in consumer preferences, channels and behaviours. By adapting to these predominant trends with customer- and digital-first strategies, retailers can overcome challenges and build trust in the new normal of retail.
This was originally published in the Asian Retail Outlook report. You can download it here.