Customer Service
Navigating the new retail experience: Changing expectations
Chris Hogue, head of strategy and product at LiveArea, explains why it's an ideal time for retailers to reassess the customer experience they should be offering to lure shoppers back into stores and does a deep dive into how changes in consumer behavior are driving improvements to the retail experience.
June 4, 2020 by Chris Hogue — Head of Strategy and Product, LiveArea
This is the second in a series of blog posts on the new world of retail by Chris Hogue. The first part is here.
Slowly and cautiously, the world is re-opening again. In the U.S., time spent away from home is increasing according to the Washington Post. On average, people are still spending about 89% of their time at home as of April 30, down from 93% at its peak. The actual numbers vary by state, urban, suburban, or rural area but the trend toward getting out is clear.
While much of the rush out of the house is to the nearest park, not retail stores and restaurants, changes in the number of visits to these establishments are coming back, too. Safegraph, which aggregates data based on a count of visits to individual points-of-interest each day, shows foot traffic to counter service restaurants and shopping malls up 37% and 59% from their April lows, respectively.
With these signs of life in mind, it's an ideal time for retailers to reassess the customer experience they should be offering to lure shoppers back into stores. In this post we'll dive deeper into how changes in consumer behavior are driving improvements to the retail experience.
The mandated closing of physical stores has forced retailers to get scrappy. Many, big and small, have rolled out new services like buy online, pick up in store (BOPIS) and curbside pickup at record rates to keep revenue coming in. Adobe reports that BOPIS orders increased 208% between April 1–20 compared with the same period last year. To limit the number of shoppers in store, retailers like Best Buy restricts in-store visits to appointment only and each customer works directly with a dedicated store associate to assist them as they shop.
All of this experimentation is great for consumers. They are benefiting from a period of retail innovation unseen in decades, if ever. With each new experiment to draw customers into their store or onto their site, consumer expectations change. They experience something they like, and their mind opens to new ways of finding inspiration, shopping, and transacting — and they want more.
Your last best experience, becomes your minimum future expectation
Between December 2019 and April of this year, e-commerce penetration went from 16% to 27% based on data from the U.S. Department of Commerce. Mandatory store closings contributed to this increase, but even if it settles between 20-22% after stores reopen, which we expect, this is equivalent to a four-year leap forward.
Dramatic change over a compressed period has accelerated three trends retailers must address quickly: mobile integration, advanced loyalty and augmented personalization.
Mobile moves to the center of customer experience
For most retailers, mobile traffic to their sites was already well over 50%. It was an important part of the inspiration process via social media and the education process while looking for specific products, reviews, pricing and availability. Now its role is expanding even further as a safety measure and for transactional purposes.
To keep customers and store associates safe, contactless payment options are being rolled out in stores. According to the National Retail Federation, contactless payments have grown 20% since the start of the pandemic, including mobile wallets or services like Venmo. Some stores are even rolling out scan-and-go capabilities, allowing customers to scan a barcode and pay for products without visiting the register. Beyond payment, mobile phones are used for BOPIS and curbside pickup to verify purchase and to locate orders. Scheduling appointments, calendar reminders and even entertainment while in the store queue are other frequent use cases that lean heavily on mobile.
Moving loyalty programs beyond points for dollars spent
Due to store closings, product manufacturers have had a unique opportunity to form direct relationships with end users. For many, direct access was not an option as products were normally sold through retail and wholesale partners. Loyalty programs are critical to form ongoing relationships with these customers and holding onto them once local stores open again.
Loyalty programs will also play a big role for retailers that need to bring customers back into their stores, and away from purchasing directly from brands. Incentives that give back to the community can be a big motivator in helping someone decide where to spend. Offering points to encourage social activities like rating products, sharing posts, or promoting hashtags is a great perk for retailers and customers alike.
Personalizing customer experience through augmented intelligence
Creating loyalty programs that resonate and inspire meaningful customer interactions calls for a more intimate knowledge of customers.
Customers are willing to spend time and share information about their fashion aesthetic, favorite activities, social passions, and communication preferences if a retailer can personalize their interactions. This will require retailers to aggregate and leverage data gathered from store visits, purchases, returns and customer service interactions and make it available to associates and customer service reps to augment their knowledge of customer likes and dislikes.
Together, physical store changes and new expectations for shopping experiences will require operational changes for most retailers. In Part 3, we'll examine essential changes, including inventory accuracy, pick/pack/ship capabilities and creating connections between products, content, and customer profiles.
Chris Hogue is head of strategy and product at LiveArea.
About Chris Hogue
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