Today’s consumers are better informed and always-connected. It is therefore hardly surprising that they come with very high expectations and settle for nothing less than the best experiences and the most compelling deals.
Both the digital natives (millennials) and digital immigrants are slowly but surely adopting new consumer behaviors aided by the growing presence of smartphones and social media networks. Studies say that well over 90 percent of adults are always with their smartphones within arm’s reach, and most of them check their phones within 15 minutes of waking up.
Retailers around the world are undertaking initiatives to revamp their business models (involving, for example, buy-online-pick-up-in-store and other omnichannel capabilities), innovating on numerous fronts—merchandize assortments, distribution, sales, marketing—by leveraging technological advancements.
Asia is often at the forefront of these customer-focused innovations. Driven by savvy consumers, Asia Pacific is set to become the world’s largest eCommerce market . The customer is king, and this has never been truer than it is at present.
Understanding the consumer through a prism
The digital divide between ‘haves’ and ‘have-nots’ of smart consumer devices—be it phones, tablets, laptops, glass and so on—is steadily decreasing. The retailers’ market today largely comprises technology-savvy consumers, who are out there in search of better products, better deals and better service, leaving their digital footprints with every ‘like’ or swipe of a card, and being forthright about their wants, complaints and opinions in social media.
Consumers are aware of the latest products, and they use their mobile devices to research for competitive offers and insights, even as they shop in a physical store. According to Cognizant’s 2014 Shopper Experience study, almost 80 percent of shoppers conduct research on their mobile devices before making a purchase.
For instance, shoppers might research products via the mobile Web after seeing them in catalogs, and read up on both retailer and product reviews on social media sites or vendor sites, before checking out the physical store and product in person. Prior to completing the transactions, they may also look for deals and customers’ reviews. Should the multiple interactions fall short of expectations, consumers have the power to abandon the transactions and vent on social media, directly impacting the retailer’s reputation.
Indeed, each step of the retail journey—research, shop, transact and post-sale—is now performed in multiple or even simultaneous channels. Shoppers demand ultimate flexibility from how they shop, pay or take delivery, regardless of engagement touch points, expecting responses and interactions to be consistent, convenient and coordinated across these channels. Retailers and brands have to strive harder to retain loyalty by providing exceptional customer value, experience and service.
Devising an effective customer empowerment strategy
New customer behaviors will only become more entrenched over time as social and mobile use becomes more prevalent across the globe. ASOS has become Australia’s largest online retailer, mainly through social media interactions with consumers. They have no physical stores or distribution presence there, only online presence.
The power of digital, which includes social, mobile, analytics and cloud (SMAC) and the Internet of Things (IoT) technologies, among many others, cannot be underestimated. Devising a cohesive, consistent and compelling customer empowerment strategy is necessary for retailers to drive business value and maintain competitive advantage.
Breaking down the silos: To start with, retail companies should look at all channels via which their businesses interact with customers and rationalize all points of engagement (physical and digital) to make the retail company appear as a single entity.
This is the omnichannel approach where the customer is placed at the center and is recognized as a single individual who must be provided a seamless experience regardless of the channel of engagement.
For example, a consumer should not have to download multiple smartphone apps for the same retailer—one for price check and purchases, another for beacon, and so on. In fact, consumers may not even want to download an app for every retailer, unless they see compelling value in doing so.
To fulfill this need, different functions such as sales, marketing and IT, need to work together in order to deliver a unified and convenient experience in the most efficient manner.
Know the customer individually: Retail companies should also recognize their customers as individuals, with a unique set of preferences and needs. By tapping into data analytics, companies can unlock a customer’s digital behavior, via their digital footprints, which produce high volumes of information that create a unique virtual identity—what we call Code Halos.
By cross-referencing with physical transaction data, demographic data and creating profiles of segments and individuals, retailers can realize unprecedented levels of consumer insight and business value. For example, retail companies can send personalized promotional messages via beacon technology to customers who walk past their stores and draw them in, thus increasing footfalls.
In most cases, consumers are aware that companies collect data about them and expect companies to use that data intelligently to provide them with enhanced, personalized service. In some cases, consumers have privacy concerns that need to be addressed and they need to see the exceptional value they derive from the retailer’s use of technology and their personal data.
Define the business value and identify the right tactics: The next step is for businesses to establish what they are trying to accomplish—gain market share, drive more value from existing customers, attract more traffic to digital channels, improve online conversion rates, and more. Only after these have been defined can businesses effectively align their initiatives with the goals for maximized impact on business performance. There is no one-size-fits-all tactic that is pitch-perfect for all companies, but going according to the targeted customer segments will drive desired business value.
Towards customer empowerment
Understanding and engaging with the new customer is an imperative for retail businesses. Of course, the fundamentals of product, price and service are just as relevant as ever for the completion of the transaction and beyond, right up to post-sales service. Retailers must shift towards a customer-centric business model, leverage technology, use analytics to understand customers, establish business goals, and identify the highest value tactics. With a strong foundation and unified approach, retail companies can meet and even exceed the expectations of today’s empowered customers.