Editorial
Well before the pandemic began, customer experience (CX) had become the battleground for competitive advantage. As the digital age has given customers unprecedented choices, information and power, savvy retailers understood they needed to bring their A game across all channels and touchpoints.
But COVID-19, unlike any other event most of us have lived through, magnified the need for businesses to lead with empathy in their customer interactions. Consumers became loyal to brands they felt were deeply and genuinely concerned with their needs and priorities.
Though the pandemic is slowly subsiding in the U.S. (and let’s hope that continues), the requirement to deliver empathy-driven CX is not. The ability to execute on this will continue to separate retail leaders from laggards for many years to come.
Customer-centricity — making customers feel trust and delight on an emotional level every time an interaction takes place, from pre-touch to last-touch to in-touch — went from being an aspiration to an expectation in the last year and a half, and that’s not about to change. Brands that were able to build loyalty through a difficult period will continue to separate themselves as things keep improving.
To get a clearer picture of the post-pandemic retail landscape, our company recently surveyed (pdf) 4,500 consumers and studied 15 multichannel retail brands to learn what it takes to retain customers in this environment, get them to spend more, and have them share their positive experiences with others.
The Big Takeaways for Retailers
1. Humanize Digital Touchpoints
Before COVID-19, many multichannel retail brands already were investing heavily in making digital experiences exceptional. It’s just that they thought they had years to complete their digital transformation. Then, thanks to the pandemic and the accelerated embrace of digitization that it caused, they had to get it done in months.
Unlike the human-to-human interaction that allows retailers to better understand customer needs in non-digital touchpoints, it’s harder to walk in the customer’s shoes in digital interactions. But some companies are showing it can be done, and well.
Domino’s Pizza, for example, has a chatbot named Dom so customers can order food without talking to a human. Tommy Hilfiger was able to use conversational artificial intelligence (AI) in their chatbot experience by listening for keywords. The chatbot then contextualizes and personalizes the responses. Still other companies are meeting their customers where they so often are — on social media — and use Facebook Messenger to deploy conversational AI for their chatbots.
Some companies cleverly humanize the digital experience by creating an emotional connection post-order. Zappos has been known to send physical thank you cards to customers. Pet supply delivery service Chewy has been known to send cards or flowers to express condolences after a customer’s dog died.
Related Article: Customer Experience Needs Empathy Now More Than Ever
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2. Put a Special Focus on Keeping Existing Customers Coming Back
Studies show that acquiring new customers costs five times what it costs to retain them. And companies that are able to create empathy-driven experiences across multiple touchpoints will gain more loyalty from existing customers.
Kohl's, for example, gives customers the flexibility to use loyalty rewards in-store or online. The program also includes special features — on top of basics like discount codes and alerting loyal customers of upcoming promotions — such as connecting to a digital wallet to make touchless transactions seamless whether the customer is in-store or online.
Many respondents to our survey said they want brands to be transparent about their pricing, noting that trust is easily broken if they find the same item listed on the manufacturer's website for a lower price. Nordstrom addresses this by stating in its app and website that it will automatically match the lowest price.
Related Article: Doubling Down on Customer Retention? Don't Forget Your Onboarding Process
3. Frame an 'Experience Strategy,' Not Omnichannel or Multichannel
Terms like omnichannel and multichannel have become widely used in the retail sector in recent years, but they’re becoming increasingly irrelevant. Why? Because nearly every consumer now views all their interactions with a retailer through a single experience lens. People don’t distinguish between online, brick and mortar, what have you.
Thus, we believe retailers should drop the omnichannel or multichannel paradigms and craft a single experience strategy. This kind of thinking makes it more seamless to map out the customer journey and determine what buyers are experiencing on an emotional level at each touchpoint.
Related Article: Immersive Experiences: Be There or Be Left Behind
4. Break Down Organizational Silos
Many businesses still operate in silos, but customers do not. Retailers need to run their business according to how customers see and work with them, not how the business has traditionally been structured and organized. That means retailers should be organized around one thing and one thing only: A holistic, empathy-driven experience, with clear understanding by everyone in every department about how each channel and touchpoint integrates to drive empathy with customers.
In addition, empathy should be a top-down initiative across the C-suite. CEOs must understand where they should prioritize investments. Chief marketing officers must understand how their brand scores on empathy across digital and non-digital channels and touchpoints. Chief product officers need to better understand how they can build products and services that drive empathy-driven experiences to increase adoption and usage.
By following these four steps, companies can ensure that they’re aligning their brands with the new realities of the retail landscape. Remember: If you empathize with customers and create consistently exceptional experiences, you'll gain higher loyalty, customer lifetime value and share of wallet.
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