Customer expectations are outpacing the reality of what retailers can deliver in today’s experience economy. Consumers are looking for fast, first-contact resolution during service interactions and more convenience, connectedness, and visibility while shopping online.
But retailers are faltering. Only 17% of consumers worldwide, according to the Genesys State of Customer Experience report, released in 2023, said brick-and-mortar retailers provided “exceptional” service in 2022, down from 19% in 2021. Similarly, only 18% of consumers said the same for online retailers, down from 22%.
Yet just 33% of retail customer experience (CX) leaders globally say it’s a challenge to keep pace with rising customer expectations. And it’s no wonder. Shopping remains a favorite pastime.
Consumers value the sensory experience, immediacy, and convenience of browsing in stores. And global eCommerce spending continues to grow. Research firm eMarketer predicts online spending could surpass $7 trillion by 2025: despite consumers feeling frustrated by an often-disjointed online shopping experience. In the U.S., both overall consumer confidence and confidence in making major purchases have seen a modest uptick.
Retailers have an opportunity to bridge the empathy gap they create when customer journeys are complex and unclear: and see even greater gains in loyalty and spending as a result. They need to:
- Provide connected experiences across channels, increase visibility into areas such as product comparisons, and improve clarity for areas such as returns.
- Make it easier for customers to do business with them by embedding empathy into every touchpoint.
It’s Worth the Investment
Faced with complex market dynamics, retailers are feeling pressure to look for new and creative ways to gain and retain customers. Some are overdependent on margin-eroding strategies like deep discounts and free shipping.
Those companies are focusing on short-term wins at the expense of long-term customer value growth. They’ve lost sight of a formidable competitive differentiator. One that will solidify customer loyalty and also make 2024 a banner year that will carry through 2025. Namely orchestrating personalized experiences that build the customer-brand relationship.
According to the Genesys State of Customer Experience report, 86% of consumers worldwide say a company is only as good as its service. But what do customers consider “good service?” Along with more than half citing fast response and first-interaction resolution, consumers crave personalized experiences that make them feel valued and understood.
But their desire for personalization isn’t just about relevant marketing communications or “just for you” offers. It’s primarily about relevance during service interactions.
Here are their top four preferences for personalized experiences:
- Receiving the services needed at any time in their channel of choice (62%).
- Getting connected straightaway with the right person to help (62%).
- Being offered services and products that are customized to their needs (42%).
- Receiving proactive communication about services or assistance they might need (33%).
Delivering seamless and preemptive experiences like these will earn retailers more than brand differentiation. It will move customers past behavioral and transactional loyalty and engender true emotional customer loyalty. And that loyalty will deliver exponential return on investment.
Consider the following. If guaranteed a personalized service experience every time, 81% of consumers say they would purchase additional items from that retailer, 79% would recommend the company to a friend or colleague, and 56% would pay a slightly higher price for the same product or service.
Retailers need to orchestrate the entire CX: moving customers through seamless journeys...
As any good analyst will tell you, the business case for CX isn’t just about generating revenue. It’s also about cost avoidance, as in not losing valuable customers.
And those costs can be high. Almost one in 10 consumers globally say they would switch providers after just one negative interaction. And more than three quarters would leave after five or fewer poor experiences. In 2022, 31% of consumers said they stopped doing business with a company after a negative interaction.
Customer loyalty is hard to earn and even harder to retain if retailers aren’t delivering on customers’ expectations for service fundamentals and relevance. Worse, it’s nearly impossible to win these back.
Only retailers that are truly dedicated to building customer relationships based on meeting customers’ needs and providing a mutual exchange of value will move ahead and stay ahead of the competition for the long term. Those few will also be the ones to come out on top.
The Foundation of the Customer-Brand Relationship
While a customer can be lost over one negative interaction, building loyalty occurs over time and across channels, individual interactions, and end-to-end journeys.
Retailers need to orchestrate the entire CX: moving customers through seamless journeys, with optimal interactions one customer touchpoint at a time. From product discoverability to purchase confidence to easy returns, retailers have tactical ways to build relationships across the customer lifecycle.
Here are three strategies that add empathy to the customer experience and help to build that hard-won loyalty.
1. Make it easier to shop and buy, so customers feel appreciated.
A mere 24% of surveyed consumers strongly agreed they found sufficient information to make a purchase decision when shopping online. Retailers often have important details, such as sizing charts, estimated arrival date, and return policies, but they’re scattered throughout their website and not always easily discoverable. This creates a disjointed experience.
Consumers also want the ability to easily contact support when necessary. But in their most recent online shopping experiences, just 25% said customer service was accessible to them on their preferred channel when they needed it.
In some cases, consumers are stalled when they’re ready to pay. Only 35% strongly agree they were able to purchase through their preferred payment method.
Customers who lack the information or support they need to purchase products or services are likely to abandon their carts and shop elsewhere: permanently.
To improve online shopping experiences, retailers can provide easier access to information and increase personalization. Using tools like journey analytics, retailers can better understand how customers are navigating their sites and what factors are driving traffic to service channels. This will enable online retailers to quickly address any issues, as well as personalize customer journeys individually at scale.
Additionally, predictive engagement tools allow retailers to understand customer behavior and intent. Combining this with artificial intelligence (AI)-powered chatbots helps online retailers deliver the information, product recommendations, and relevant promotions that will prevent cart abandonment.
Providing a smoother shopping experience does more than increase customer satisfaction. It delivers a wealth of business results, including higher sales conversion rates, fewer returns, and deeper long-term customer loyalty.
2. Provide greater post-sale visibility to instill customer confidence.
Less than one-third of shoppers worldwide strongly agreed their tracking experience was easy or that they received up-to-date information about their purchase delivery. And just 40% strongly agree that most orders arrive with the correct items and in the expected condition. This not only demonstrates a lack of empathy from retailers, but it also creates inbound queries as customers seek information about their orders.
Retailers can make shipping and delivery more convenient and personalized in several ways. They can provide detailed outbound communications via consumers’ preferred channel to keep them informed of shipping and delivery status.
Again, retailers can use journey analytics with AI, in this case to identify any post-sale issues driving traffic to the contact center. By better organizing their data and keeping their knowledge bases current, retailers can ensure that self-service channels and employees are drawing on consistent information. Which is more likely to lead to a resolution in the first interaction.
By optimizing processes to increase visibility into shipping and delivery status, retailers can improve customer satisfaction. Thereby leading to a greater likelihood of repeat purchases: and lower costs through reduced inbound interaction volume.
3. Simplify returns processes to build loyalty and trust.
Nearly one-third of products ordered online are returned. The ease or complexity of that process has a significant impact on consumers’ propensity to buy the first time: and it affects the likelihood of repeat orders. But just one in five consumers globally are confident that when they buy online, the return process will be easy. This lack of trust can lead directly to cart abandonment.
What matters most to consumers is knowing the cost of the return, the timeframe, and the exact process involved: before they make a purchase. They also want retailers to provide easy access to customer service via their preferred channels, if needed.
Retailers should prioritize creating a simple return process. One way to improve that process is by using journey management with predictive engagement to trigger the right resource when customer behavior suggests they need guidance. Proactive assistance will increase initial sales conversion rates and grow brand loyalty over time.
Orchestrate the Customer Experience for Faster Growth
Retail sales, especially online, continue to grow. But that doesn’t mean retailers are achieving their full potential. Many are losing sales to competitors that provide more empathetic, engaging experiences. This creates both an urgency and an opportunity for retailers to reimagine the CX and grow their business.
To address the key issues they’re facing, and meet customers’ expectations for convenient and personalized experiences, retailers need to orchestrate experiences across the entire customer journey at scale.
As retailers plan for the 2024 holiday shopping season they shouldn’t be distracted by shiny new tactics or lose revenue by offering deep discounts. The key is to focus on the strategy that matters most: Solidifying the customer-brand relationship through personalized experiences, increased visibility and connectedness, and meeting expectations for the service fundamentals.
Proactive assistance will increase initial sales conversion rates and grow brand loyalty over time.
And many retailers are doing just that; nearly half of retail CX leaders say their biggest CX priority over the next two years is using data and AI for personalization and customer understanding. And 76% say implementing a CX platform that integrates systems is the top technology initiative they have planned to support their strategic CX priorities.
By implementing connected technologies that enable experience orchestration at scale — and by using AI-powered insights to measure, manage, and optimize journeys — retailers can personalize CX in real time and over the long term. By doing so, retailers will build long-standing, fruitful relationships with each of their customers and see substantial business performance improvements in 2024 and beyond.