Attracting and retaining customers is the leading challenge that Australian retailers face today, according to a recent survey of Australian Retailers Association (ARA) members.
Sponsored by cloud-based software company NetSuite and conducted by consulting firm, Frost & Sullivan, the survey found 42 per cent of retailers don’t have a customer experience management strategy to remedy this obstacle. The number is even higher for small retailers at 51 per cent.
The study, carried out in June 2015, indicates that the proliferation of retail channels has exacerbated this issue, with retailers now required to deliver a consistently high and increasingly personalised customer experience across multiple channels, including brick-and-mortar stores, online, mobile, call centres and social media.
“The changing retail environment and the emergence of the multi-channel retail model are driving a profound change in the way that retailers manage their business,” said Mark Dougan, MD, Frost & Sullivan.
“Retailers are moving away from the traditional aspirations of increasing store sales year on year and are putting more effort into measuring and monitoring customer satisfaction and lifetime value. Yet, with customers now using multiple channels to interact and transact, this has become infinitely more challenging.”
In order to rectify this Dougan cites a holistic approach to managing customer experience, combining all customer touchpoints within a single organisational structure and business system.
“The key to managing the customer experience is to have one database with a single and unique record for every customer, which can be accessed in real-time at all points of interaction,” said Dougan.
“The richer the data the better, as this enables tailored and relevant interactions with customers. This personalisation is increasingly critical to customer experience management, as consumers are responsive to offers and communications that are highly relevant to them, and very unresponsive to those that are not.”
The study has also revealed that volatile market conditions continue to drive caution within the Australian retailing sector, with 39 per cent of respondents believing conditions are worse than a year ago.
On the positive side, the majority of Australian retailers are adapting to changing market conditions by becoming multi-channel businesses, with almost 90 per cent now operating a website (up from just over 50 per cent in 2013); over 80 per cent having a social media presence (up from 32 per cent in 2013); 61 per cent offering transactional capabilities on their website (up from 38 per cent in 2013); and 43 per cent having a mobile website or application (up from 28 per cent in 2013).
“With growing knowledge, power and expectations, consumers increasingly dictate and control the terms of their engagement with retailers,” said Lee Thompson, senior vice president and GM of Asia Pacific & Japan for NetSuite.
“Customer-centric commerce means reorienting a business from its traditional focus on sales channels to designing a business around customers. To remain viable and relevant, retailers must redefine their approach to effectively and seamlessly engage consumers across multiple channels. Done right, it drives sales and customer loyalty, while also maximising the lifetime value of customer relationships.”
A more detailed analysis of the research can be found in the Frost and Sullivan white paper: “The Customer Experience Challenge for Australian Retailers.”
