Omnichannel

Effective CX strategies amid evolving retail consumer engagement

In times of unpredictable spending habits, it is critical for brands to reconsider customer experience strategies to better support brand loyalty and consumer engagement.

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April 27, 2023 | Rory Gentry, Assistant VP, HGS

Economic turbulence plagues the U.S., eradicating any sense of predictability, particularly in retail spending. According to the Department of Commerce, consumer spending jumped in January and fell in February, blowing out any predictions that retail brands use as sales estimates for the month.

In times of unpredictable spending habits, it is critical for brands to reconsider customer experience strategies to better support brand loyalty and consumer engagement. According to Forbes/Arm Treasure Data, 74% of consumers are at least somewhat likely to buy based on experiences alone, highlighting the role of CX to not only capture target consumers but also engage them to build brand loyalty.

As the pressure to keep up with competition intensifies under economic instability and technology innovations accelerate, retail CX continues to evolve via artificial intelligence, virtual reality, and other automation tools — often in ways consumers may not even notice.

Retail brands must find ways to improve CX without losing human touch, such as combining the physical and digital worlds into a "phygital" environment through a virtual recreation of the engagement and touchpoints historically seen in brick-and-mortar stores. In fact, the old suburban shopping mall hasn't died, it went virtual. Social media became a primary driver of seamless consumer engagement strategies for brands to guide phygital experiences and facilitate brand loyalty, particularly among younger generations.

How phygital CX is changing the retail industry

Endless omnichannel options

Gone are the days where consumers only had the option to shop online or in-store without a CX representative's assistance. Technology now enables brands to expand their reach by leveraging the scale of virtual environments to provide consumers more personalized experiences tailored to individual needs and preferences. The growth of omnichannel CX offers a multitude of options for consumers to customize their in-store and online brand interactions, while providing retailers opportunities to engage customers in more innovative ways.

Retailers can create phygital customer experiences through:

• Same-Day Delivery: A consumer's order will ship out the same day the order is made. If a consumer is short on time, this option allows them to have a product at their doorstep within 24 hours.
• Buy Online/Pick Up In Store: If consumers prefer a quick, cost-effective experience, this option merges the online ordering process with an in-store pick up time that offers opportunity for human interaction.
• Scan-and-Go: Heading to work and in a pinch for a quick snack? Scan-and-go offers an in-app feature that populates available store items, allowing for faster, contactless checkout without having to wait in line, supplemented with CX support for any questions or purchase issues.
• Scan-and-Ship: When shopping for bulky, hard-to-transport items, the scan-and-ship feature allows consumers to scan products using a retailer's app and have them shipped to their homes or any desired destination. The feature also lets shoppers choose different colors and sizes that may not be available in-store.

More efficient processes

Retail brands work hard to create seamless experiences for both consumers and employees. Technology advancements like AI, VR, and machine learning tools allow for intense data, tracking and training capabilities unheard of even decades ago. As these solutions become reality, it empowers employees to focus on higher-level tasks and offer superior CX.

A couple examples of how technology has transformed the retail industry include:

• Robotic Inventory Scans: Back in the day, employees stayed late to count inventory and understand how many products should be on store shelves at a given time. With help from AI and machine learning tools, retail brands today use floor scrubbers to navigate store aisles and accurately collect inventory data, allowing employees to focus on supporting a positive in-store experience.
• VR Training Sessions: Instead of having an employee stand in-store to oversee day-to-day activities, retail brands offer remote training sessions via VR. An immersive experience gives employees the same training but with a seamless, cohesive process before they even start working on the floor.

New designs for a different experience

As retail brands increasingly adopt technology to support phygital experiences and enhance the workplace, their image changes to parallel current consumer needs and reach younger generations.

The in-store and online experience has most recently evolved through:

• Tech-Friendly Environments: As retail brands look to foster phygital experiences, they increasingly redesign stores to offer virtual access to product information through the use of QR codes. For example, stores with good indoor lighting and open spaces support access and a tech-focused brand image.
• Showcasing Products Virtually: When shopping at home, it can be difficult for consumers to accurately determine whether a couch's dimensions will fit in their home. With a quick application download, they can take a picture of the room's space and insert the couch in an image for better visibility.
• Online Brand Events: History has shown retail brand events bring together a community with similar interests and can improve consumers' positive experiences with a brand. In a virtual world, retailers can harness event strategies via virtual live streaming that connects community and brand image – particularly in the gaming industry.

Why phygital is critical for growth

While new technologies and innovations highlight the importance of consumer engagement, the concept is timeless for building brand loyalty. Effective engagement and CX ultimately come down to connecting a brand's image with the consumer's real-life experience.

As retailers evolve their use of technology to target younger generations, engagement strategies must also change while keeping human interactions at the forefront to support an excellent CX. The free form conversations, group shopping experiences, and movement in and out of brand's own space and the wider "concourse" conversation spaces have been replaced by social platform conversations on brand channels and in earned zones like Twitter and a shopper's personal walls.