Editor's Note: Digital channels have brought unparalleled choice and convenience to consumers, but still do not satisfy all of their needs. For many it's the direct, positive interaction with a brand that shapes perception, builds trust, and drives loyalty.
Retailers that want to be leaders in their space likely understand this by now, but there's still immense opportunity for them to walk the walk and realize the value of investing in the necessary technology that will enable them to be more unified and see its benefits.
Between 2020 and 2022, retailers operated at startup speed, rolling out new services to more effectively engage customers in what quickly became a digital-first world. The list of customer-facing innovations has been impressive to date, including buy online/pickup in store, virtual styling, digital clienteling, live video commerce, real-time delivery, augmented and virtual reality shopping, and more.
Brands and retailers weren’t the only ones forced to accelerate their digital transformation. Customers too, faced their own digital transformation, which altered the course for in-demand shopping expectations, preferences, and behaviors. And, 61% of customers report that they’re going to spend more time online after the pandemic than they did before.
The Next Landscape for Retail: Legacy Systems vs. Unified Platforms
With the blurring of the lines between digital and physical channels, shoppers have more channels and options that ever before.
To help executives understand how rising customer expectations and the global health crisis are reshaping the retail industry. Salesforce recently published its fourth edition of the “Connected Shoppers Report.”
What’s clear is that we’re not going back to normal, even as physical stores start to open. On the contrary, customers expect brands and retailers to not only keep up change, but also enhance customer experiences. Those that don’t, will pay the ultimate prices. Most shoppers (80%) said that they will abandon a retailer after three bad experiences.
Retailers face a common, onerous challenge. They must iterate and innovate in real-time while navigating legacy technology systems and processes, many of which were already outdated prior to the pandemic. Today, retailers are managing an average of 44 disparate front-end technology systems.
Shoppers Continue to Define the New Rules of Engagement
Shoppers are learning to follow their own path. But that doesn’t mean brands and retailers should just follow suit. Instead, they should explore why customers feel compelled to jump across so many channels to help guide experiences to enjoyable outcomes.
Between 2019 and 2021, three types of digital channels grew transaction share by nearly 40%: 1) brand websites and apps, 2) retailer websites, and 3) apps and online marketplaces.
Delivery apps, social media, and messaging platforms also emerged as important channels with their share of transactions increasing more than 20%
Retailer Insight: Creating digital channels to engage customers where they are is only the start. User experience (UX), personalization, navigation (UI), and experience integration are key. Design touchpoints to leverage native device capabilities and shopper behaviors. Doing so will accelerate adoption because touchpoints (sites, apps, in-store, representatives) are intuitive, useful, and enjoyable.
Shoppers are Learning to See the Role of the Store Differently
In a digital-first world, physical stores still have appeal. In Salesforce’s research, shoppers say they value stores for the following reasons:
· Touch and feel merchandise
· Get merchandise immediately
· Avoid shipping fees for purchases
· Take advantage of in-store discounts
· Enjoy the shopping experience
There are differences in how generations view the role of the store, however. Older customers are more traditional, visiting stores to touch and feel merchandise, get products immediately, and use discounts. Younger consumers though, are seeking experiences, enjoyment, and to be part of events.
Retailer Insight: Though the store still serves a traditional purpose, opportunities to improve physical experiences will appeal to all generations of shoppers. Ask, what makes for a remarkable shopping experience? Removing friction in the store is one way. Talking to customers and exploring innovations in other industries can also help create novel experiences not possible before the pandemic.
Shoppers Expect Brands and Retailers to Meet Them at the Edge
Shopping at the edge is where consumers start — and hope to complete — their shopping journey, usually outside of a brand or retailer’s physical and digital space. Channels include social media, messaging apps, and live streaming services.
Salesforce research identified three different edge behaviors reshaping the customer journey:
Discovery at the edge: Social media, influencers, and messaging apps are the most popular methods for discovery.
Buying at the edge: Mobile wallets, email, and social media represent the top digital destinations for shoppers to make a purchase.
Service at the edge: Self-service channels (chatbots, chat, instant messaging) and social media are the most popular ways to engage customer service.
Retailer Insight: Retailers also compete with social networks, apps, voice assistants, mobile devices, and other emergent channels for customer attention. Engaging customers directly where their attention is focused creates inroads from the brand/store to shoppers. Creating relevant and intuitive touchpoints and directly connecting them to desired outcomes, at the edge, will increase engagement and conversions. Additionally, discovery is the next big frontier. Shopper demand for highly personal and relevant content is on the rise. More so, Google’s algorithm now recognizes the shift in consumer demand to prioritize the most sought-out content.
Loyalty is the New Competitive Differentiator
Beyond points and traditional rewards programs, creative brands and retailers are exploring ways to drive consumer loyalty and customer lifetime value. This includes service and experience innovation to engage customers in ways that make them feel valued and special.
Shoppers say incentives such as free shipping (75%), simple and/or free returns (60%), and loyalty or rewards programs (56%) increase their likelihood to buy. Shoppers also seek tailored engagements that are genuine and personal, such as exclusive shopping experiences, early access to products, and meaningful sustainability efforts.
Salesforce data also reinforces the connection between younger generations and experiential programs that instill authentic connections. Millennials and Gen Zers say that they value exclusive access to limited products and experiences. And they are also more likely to join a fee-based loyalty program, with nearly one-third belonging to one, such as Amazon Prime or DoorDash’s DashPass.
As shopper behaviors and expectations evolve so must rewards programs. Connected consumers say that they’re open to engaging and promoting the brand or retailer in exchange for rewards. This includes downloading an app (57%) or writing an online review (47%). One-third of shoppers reported that they would also promote the brand on social media.
Personal information can also lead to tailored engagement and rewards. Almost half of all shoppers are willing to share intimate details in exchange for personalized engagement including sizes and style preferences. Forty percent will also share lifestyle preferences.
Personalization is a major opportunity and most retailers are still falling short. More than two-thirds of customers (66%) expect companies to understand their unique needs and expectations, but only 32% of executives say they can convert data into personalized prices, offers, and products in real time across channels and touchpoints.
Retailer Insight: Personalized services and experiences go a long way, more so than traditional points and rewards. To personalize experiences, and ultimately foster loyalty, requires input, directly from customers and indirectly through data. Unify customer touchpoints on a unified platform that converts data into real-time, personalized insights across the journey.
Customer Experiences Can No Longer Be Siloed
Customer experience is defined as the sum of all engagements a customer has with your business, in each touchpoint, throughout their journey. Yet, as shopping habits have so radically evolved in the last few years, research shows that less than half of executives have defined their customer experience strategies.
As companies measure NPS or effort or satisfaction, they’re doing so without first defining the experience customers should expect in every touchpoint, as fortified by technology, processes, and journeys
Once desired experiences are defined and designed, they must be orchestrated so that each part adds up to the intended sum. However, the top three barriers preventing a well-defined customer experience strategy are:
· Lack of organizational alignment and processes across channels
· Lack of agility to turn data into insights and actionable information
· Complexity with consumer data
Retailer Insight: Add an “’s” to customer experience to shift the perspective from an internal to external purview. The customer’s experience is what matters as it’s theirs. The alignment between an articulated, promised experience and the ultimate experiences customers have is what should be measured. Any data points or inputs missing to that prevent the full measure of the customer’s experience must be integrated.
Integrate a Unified Customer Platform to Deliver a Connected Customer Experience
In its research, Salesforce learned that retailers expected to employ an average of 76 data scientists by the end of 2021. That number is expected to grow an additional 44% through 2023. Retailers seeking to deliver a 360-customer experience are also aiming to adopt unified engagement platforms.
Unified platforms enable retailers to access and operationalize customer data across marketing, commerce, and service functions. Together, they facilitate personalized and relevant engagement across the ever-increasing number of physical and digital channels.
The top five reasons to adopt a unified engagement platform are to:
· Increase agility.
· Create a seamless customer experience across channels and devices.
· Increase store associate productivity.
· Make data-driven decisions.
· Deliver personalization in real time.
Where are retailers in their end-to-end journey? More than half of retail executives (55%) say their organization is still in the planning stage for a unified platform. Only 16% of retail executives say their organizations are in the “realization stage,” operating a unified engagement platform and measuring its benefits to shape future engagement.
Retailer Insight: The customer’s experience is always-on and shaped by every engagement they have with your brand, including every process, person, and technology. Unified customer and engagement data and engagement platforms are instrumental in ensuring a desired 360 end-to-end experience and connecting to insights that make true personalization possible.
The Next Next Landscape: Customer experience innovation
The pandemic accelerated the evolution of digital-first behaviors and how consumers expect to engage online, offline and in hybrid worlds. Digitizing retail touchpoints is just the beginning of what’s possible.
The future isn’t what it used to be and that’s good news. Retailers have a unique opportunity to accelerate transformation and innovation initiatives and take a leadership role in reshaping the future of retail and customer experiences. This starts with an integrated, personalized, and agile foundation that connects to people, through 360-degree data and insights, and meaningful engagement in every touchpoint at the edge, online, and in hybrid, connected stores.