Omnichannel

Digital innovation in retail in the age of the experience economy

Scott Wassmer, general manager, Americas at Appnovation, takes a look at the retail consumer's expectations when it comes to digital today and in the future.

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October 19, 2021 by Scott Wassmer — General Manager, Americas, Appnovation

By now you know customer experience is one of the most important differentiators between your brand and your competitors. It's your best opportunity to relate to your consumers in ways that are unique to you and share the values that are most important to you and your consumers. Put simply, it's how you gain and retain customers.

So, how does great CX happen? First, you must understand what the customer values. Appnovation recently conducted research measuring American and Canadian retail consumers' values and expectations of brands, specifically in relation to their digital experiences with retailers.

Below are three key takeaways that you can — and should — consider when evolving your digital retail strategy.

Chances are you're not doing enough

I don't say this to be shocking or bleak. Our research found that despite over half of consumers making weekly online transactions, only one in five rate their online shopping experiences as 'Excellent.' From this we can logically assume that 80% of consumers feel there's room for improvement.

While these feelings may not prevent customers from shopping online altogether, you can bet it's costing your brand customer loyalty. In fact, 21% of consumers said they switched retailers because they didn't like the digital experience that was offered.

So let's try to understand what could be reducing the quality of online retail experiences. Understandably, problems arise when inventory is out of date, with 14% of consumers saying it's their biggest frustration. Difficult Navigation (11%) and a Poorly Designed Interface (9%) closely follow.

While each requires its own solution, they all stem from the same issue: a lack of customer obsession. Brands get ahead when they leverage data to learn how customers want to interact and find the easiest way to deliver what they need, when they need it.

CX is not one size fits all

Many features related to digital interactions are simply the cost of entry for brands. For example, all consumers expect a retailer to offer competitive pricing and that the quality of the product will meet a certain threshold.

What's coming through as a differentiator is how easy and convenient the retailers make the experience, as well as the strength and meaningfulness of the customer's connection to the brand. The latter is particularly true for younger shoppers.

Ultimately, we found significant generational differences in terms of what consumers value. So let's dig a little deeper. Gen X values Price and Value (48%) above all else, followed by Quality (30%). Meanwhile, Gen Z ranked Ease of Experience (34%) as their top factor in an online interaction. They also rated Connection to the Brand significantly higher than any other generation at 20%, compared to only 2% of Gen X and 8% of Millennials.

There are many factors driving these differences — some more complex than others. Most notable is the fact that Gen Z is the first generation that's digital native, meaning they were born into a tech enabled world. Digital interactions with brands are ingrained into their DNA — it's often how they discover and start a relationship with the brands they interact with. This is also why their expectations around digital experiences are higher than those of other generations.

Make it personal

Over the next three years, shoppers' biggest expectation of retail brands is the addition of new features to enhance the digital shopping experience (85%). Makes sense — e-commerce is one of the fastest growing industries and innovative features are being developed every day.

Getting more specific, 72% of consumers expect a brand to use the information it already has on them to create personalized digital experiences. This ties into what I said above about using data to "obsess" over your customers.

When it comes to personalization, the three most important features to provide are: timely and valuable information from your brand; contactless pickup options; and personalized offers and discounts. Naturally, the top three deal breakers are a lack of these features.

Customers also expect personalization through virtual assistance to become more common (72%), as well as more immersive experiences through virtual or augmented reality (68%).

Final thoughts

We've talked about a lot of current and future customer expectations — and hopefully you've learned a few ways your brand can either catch up or get ahead of the competition.

Another thing I want brands to understand is that their CX is going to be compared to other digital experiences outside of their vertical. The digital world has become the great equalizer of brand experience — and that means your retail experience will be judged against those created by Apple, Google and Facebook.

I'll leave you with one caveat: even the best digital-first strategy won't succeed if it's a digital-only strategy. Brand values and experiences need to transcend the digital and physical spaces your brand occupies. That said, everything until now has been a warm up for future digital experiences that are going to become more deeply rooted in society as true digital natives become the larger population.

For more insights into today's digital expectations in the retail industry, read the full consumer research report.

Scott Wassmer is general manager, Americas at Appnovation

About Scott Wassmer

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