There’s a new customer in the making — the post-COVID shopper. It is the kind of shopper who wants a quick, convenient and safe retail experience. This customer channel-hops and is not worried about switching to another brand that reflects their values. They are restless, buying more online and still craving to get back to the in-store shopping experience. Are retailers ready to renew their customer relationship in the new normal?
Early on in the pandemic, stores struggled. In May 2020 Neiman Marcus, like many other retailers, filed for bankruptcy. To turn things around, they invested $500 million dollars in the NM Connect app, a digital platform that enables their sales associates to personalize communications with customers and for stylists to deliver a store-like experience online. Within the first 90 days of launch, it drove $60 million in sales, allowing the retailer to come out of bankruptcy. The Neiman Marcus story highlights the importance of innovation and investment in digital technology to attract and retain customers in an unpredictable retail environment. But it’s not going to be easy. Research shows that retention rates are 82% lower for customers acquired during the pandemic.
Here are 3 things retailers need to meet the expectations of a more demanding post-pandemic shopper and deliver a consistent, reliable digital experience across devices and channels:
Rethink the value proposition of brick-and-mortar stores
Physical stores are still relevant, but bridging the in-store and online experience is the only way forward. Retailers should focus on delivering seamless omnichannel experiences from browsing to researching, selecting, purchasing, and returning products. IBM’s annual US Retail Index study suggests that COVID-19 has accelerated the shift to e-commerce by five years. During the pandemic, 75% of consumers tried new shopping behaviors that offered more convenience and value. Retailers who don’t leverage new omni-channel business models to offer flexible, digital shopping experiences may be left behind.
For example, Buy Online Pick up In Store (BOPIS) grew 28% year-on-year in February with 56% of consumers reporting a high intention to continue to use such models after the pandemic. BOPIS offers the best of in-store and online shopping, allowing customers to research products online and buy them in-store at their convenience. Some fashion retailers are taking their products to the customers with pop-up stores, operated out of trucks, to offer safe shopping options during the pandemic. In India, Pepe Jeans used #PepeMeUp fashion trucks, designed as a replica of the store, equipped with their latest collections and trial rooms. Brick-and-mortar stores aren’t going anywhere. But retailers who use physical spaces more innovatively to offer value-added services and build customer relationships will lead the way forward. For example, Nordstrom is already doing this with its merchandise-free concept, Nordstrom Local, where customers can pick up online orders, use tailoring services, and enjoy a spa treatment. While e-commerce is booming, retailers will need to reimagine store concepts to provide more social, tactile, and intimate experiences that can’t be offered online.
Focus on personalisation to drive engagement
Experience is everything, and the more personalised the better, especially for the new-age customer. The ‘State of the Connected Customer’ report from Salesforce Research reveals that 66% of customers expect companies to understand their unique needs and 52% of customers expect personalised offers. Retailers who don’t deliver a tailored experience run the risk of getting left behind. Those who do will be more successful in engaging customers and maximizing their lifetime value.
Personalisation will mean curating tailored experiences across touchpoints, and must move beyond segmentation. As a first step, having quality data is the key to building individualised customer profiles. Coupled with predictive analytics, an integrated retail CRM system helps design targeted loyalty programs, deliver personalised recommendations and offer relevant promotions. Retail management and point of sale systems should capture vital customer information including purchase history and preferences, which will empower in-store staff with the right information to cross-sell and upsell. IoT can be used to send discounts or special event alerts to customers for products they viewed on the store’s shopping app. 68% of consumers say that pop-up mobile notifications on in-store product offers influences their shopping decision. Combined with the ability to see and feel the recommended product, in-store targeting may help close the gap between in-store and digital experiences.
Build trust to create brand advocates
Trust and transparency are emerging as the new currency for the post-pandemic consumer. An Ernst & Young consumer study reveals that for 40% of consumers authenticity and honesty is crucial while making a purchasing decision. However, only 20% reported trusting retailers. Reliable delivery, accurate online inventory, and safe in-store procedures such as contactless payment and point-of-sale billing that limit physical touch, are essential features of a consistent retail experience today. However, retailers need to do more to create an authentic brand that customers trust. The pandemic has created a more discerning customer who demands more transparency in how the products are sourced, made, and delivered. They want to know if employees are being treated fairly. As customers move swiftly across channels, retailers should also focus on ensuring safe and secure data collection. Going forward, trust will play a critical role in influencing customers’ choice, frequency of visits, long term patronage, and brand advocacy.
Retail technology should elevate the human experience
While consumer behavior has changed since the pandemic, the core elements of an exceptional experience remain the same. At the end of the day, the customer is a person, and retail technology should be used to listen to and respond quickly to this individual’s expectations. Artificial Intelligence is set to transform the retail experience in the future with the global ‘AI in retail’ market expected to reach $24 billion by 2027, with a year-over-year growth rate of 29.7%. In addition to building the right infrastructure, retailers will need to consider how to incorporate AI into internal processes and culture, which will elevate the human experience.
To retain the post-pandemic customer, it is key to provide them with a NextGen Retail experience that they cannot forget. 6DX leverages the 6 key dimensions of Retail seamlessly to help you become a customer favourite. Get in touch with our experts today to know more about this dynamic Retail tech!