The COVID-19 pandemic has flipped on the stadium lights in retail and the glare is harsh. Still reeling from recent waves of disruptive change, cross-sections of retail are now facing bankruptcy. Meanwhile, store closures, decreased consumer demand and shifts in buying behaviour have accelerated the rise of ecommerce, forcing store-first retailers to hard pivot to develop a more comprehensive omnichannel environment.
More than anything, the pandemic has highlighted the importance of customer experience. Long lines, social distancing and more in-store staff, who conversely feel distant, has resulted in tensions that have made food shopping feel like a dystopian scene from the movie The Hunger Games, not the literal hunger games that hitting the aisles with an empty stomach should be. The prohibition on certain activities, paired with an uptick in quality family time and increased online social activity has meant experiences have taken on new meaning.
CX+ Retail 2020 can help businesses navigate this change, by combining an understanding of pre-pandemic retail customer sentiment, with emerging trends and evolving consumer needs. Our study also provides cross-category comparisons and perspective that is difficult to gain elsewhere. For example, CX+ analysis found that fashion, grocery and general retail were amongst the least customer-centric categories studied. We will share three key learnings with you here.
Revisit your brand promise
Start by re-examining your brand promise. CX+ Retail 2020 analysis found pre-pandemic that just 39% of customers on average felt that retail brands have a clear brand promise. Our research suggests that this may be a particular problem for fashion, where it seems customers are struggling to identify the meaningful difference between retailers. This reality is underlined by recent Kantar research for a major global fashion brand, which aimed to help the retailer better differentiate the in-store experience by infusing fitting rooms with unmistakable brand cues.
CX+ 2020 analysis also signals the rising importance of sustainability in fashion, which we discovered is the number one driver of brand preference, yet just 30% of people said that brands were doing an excellent job in this area.
When combined with an understanding of evolving ‘pandemic’ customer attitudes around consumption and how brands serve society, the importance of sustainability and how it relates to brand promise are likely to increase in the near future. The lack of differentiated brand promise based on deeper meaningful difference may increase as a risk factor for fashion brands. CX+ 2020 calculates that customers would spend an estimated 37% more at a truly-customer centric fashion retailer compared to an average one.
Radically rethink the in-store experience
Wave 6 of the Kantar COVID-19 Barometer data found 80% of people said they expect to return to stores within 6 months’ time. But there is no guarantee is that customer expectations will remain the same as before. While some retailers have used store closures as an opportunity to do interior refurbishments or merchandising facelifts, brands that understand the importance of CX will radically rethink the role of in-store.
Retailers will need to begin with assuaging customers’ safety concerns. They will also need to give people a reason to overcome the inertia of new lockdown habits. Smart retailers will re-examine the benefit that in-store experience can provide — especially when social distancing limits the social engagement and hygiene fears limit sensorial and product interaction — the very things that shoppers often want most from the physical outlet.
In-store technology has been limited to the occasional smart mirror or the odd augmented reality app. But leveraging innovative in-store technology in an integrated way may provide solutions to better balance the human touch and hygiene issues. If used well, technology may ironically turn out to be the very thing that enables safe social and sensorial interaction in-store. With AR and VR, it is possible to interact physically and sensorially with products and people and but at a safe distance.
At the same time, retailers will need to re-examine the role of in-store employees. CX+ 2020 discovered that general retail customers are frustrated by the lack of prompt in-store help. Just 36% of people rated general retailers excellent for helpfulness of employees. The current safety limitations of personalised help will alter in-store relationship dynamics. And shifting consumer habits may force retailers in some sectors to increase the number of smaller format / low inventory shops and dark stores. This may further propel a change to the role of in-store employees, who may be freed from inventory management tasks and may have more time to devote to customers. Alternatively, omnichannel pressures in mixed format stores could force employee roles to change in the opposite direction. Regardless, current forces may be the catalyst for in-store transformation that the industry has always needed.
Re-invent the omnichannel experience
The pandemic has coached many new shoppers into the omnichannel ecosystem. Pre-pandemic, the top three CX drivers of brand preference in grocery were the experience in a brand’s online shop, the ease of combining online and offline shopping and the quality of its innovative digital services. Yet people ranked grocery retailers’ performance in these three areas lowest amongst all attributes studied. Just 23% of people globally rated their most recent online grocery experience as excellent.
Experts predict that approximately half of pandemic-driven ecommerce growth will remain afterwards. While many retailers are still challenged to make the economics of omnichannel profitable, this may prove an opportunity to become more fully integrated into people’s lives and earn market share. Retailers that effectively leverage the greater visibility and wealth of customer data across the all channels will be able to deliver more personalised customer experiences. Relevant experiences result in greater customer satisfaction, which CX+ 2020 demonstrates is current a problem in retail. A mere 15% of people globally felt delighted with their most recent grocery interaction, so retailers are not doing all they can. Yet CX+ 2020 grocery retail analysis finds that when customers are delighted, brand preference increases by +90 percentage points. While CX+ and the pandemic have highlighted vulnerabilities in retail, these insights can be a force for positive change.
And retail transformation can’t come quickly enough. CX+ 2020 found that just 19% of people globally believe retailers are truly customer centric and put customer needs and requirements first. Yet customer centricity acts as a systemic stabiliser, ringfencing brands from major economic and societal disruption. Our research estimates that retailers are leaving US$3.4 trillion dollars on the table by not being more customer centric. Backed by rigorous and validated customer research, CX+ provides a detailed breakdown of the necessary elements to delivering experiences that exceed your customers’ expectations. Only when all the lights are on can you see the full landscape of retail and understand what experiences customers want now and in the future.
Please get in touch to find out more about our learnings from CX+.
CX+ is the only sector-specific study that analyses customer centricity holistically and pinpoints how to close the gap between customer experience and brand promise. It is informed by research in 17 countries, across over 1000 brands and feedback from more than 100,000 people.