Empathy and personalisation more vital than ever for retailers to successfully engage with customers
Digital technology has permeated every part of our private and professional lives, and nowhere is it so evident as in the retail industry. Retailing continues to change rapidly on the basis of technological advances; as such, the imperative of retailers putting themselves in the customers’ shoes is more vital than ever. The retail experience has to be quick and easy, offer high value products at affordable prices whilst, crucially, avoiding mistakes that disappoint their shoppers. Cognizant’s fifth annual Shopper Experience Study, which surveyed respondents from the U.S., UK, Germany and China, shows that customer empathy is more important than ever. While many retailers have innovatively implemented new systems that reduce cost, improve sales and the results appeal to customers, customers’ true needs and wants keep growing.
In order to help retailers accomplish their goals and truly respond to customers’ evolving needs, the study provides practical tips and methods retailers can deploy, analysing six key areas that are essential to transformation strategies today: mobile, social media, personalised marketing, cross-channel integration, loyalty, and digital shopping.
Mobility. Although still emerging as a major channel for retail sales, the study finds that 52% of shoppers have made a purchase on a mobile device, although this is only a small fraction of their total m-commerce purchases. The reason this number isn’t larger is a high level of dissatisfaction among shoppers with current m-commerce apps and mobile sites. Only 45% of shoppers say they are satisfied with the mobile shopping experience they encounter. Mobile devices in the hands of consumers have strong potential to generate future revenue growth and they are also becoming the primary tool for retailers to integrate digital and physical shopping experiences. However, it is clear there is a gap that needs to be closed between mobile shopper experiences and what the retailer is actually offering.
Social media. Just as shoppers love their mobile phones, they also love their social networks. Study data finds that 86% of shoppers say they regularly use social media. But while shoppers love social media, they want to use it on their own terms. 63% of shoppers express a negative reaction to retailers who use social media to influence purchases, recommend products or share deals. Shoppers also dislike postings in social media that are intended to influence purchases (79%) or use data from social networks to personalize experiences (83%). As such, retailers are best advised to listen, analyse and learn. Social media is a great place to hear what shoppers think of a brand and its competitors.
Personalised marketing. Personalised marketing could be a solution that cuts through the clutter of a growing array of marketing messages that inundate shoppers today. However, there is a problem of trust that retailers must understand and overcome. 68% of shoppers say they are not willing to share personal information from social networks, nor are they willing to share credit card numbers (69%), online browsing behaviour (61%), household information (64%) and phone numbers (61%). For retailers, one answer is to focus on sources of information that shoppers are willing to share such as data through loyalty programmes (43%), personal shopping preferences (33%), and events such as birthdays and anniversaries (29%). Shoppers are even fairly willing to enable location-based services (22%).
Retailers should promote a value-for-value exchange of personal information for points, discounts, relevant offers or tailored services. Shoppers respond to personalised messages far more positively than to mass-marketing blasts. In fact, 51% of shoppers will respond to personalised marketing when it provides improved services.
Cross-channel integration. Retailers have yet to make the leap in an effective way that delivers high satisfaction to shoppers. This has produced gaps in omni-channel services between what shoppers expect and what retailers deliver. According to the study, 62% of shoppers use “Buy Online and Pick-up In Store” (BOPIS) today, a number that is likely to grow in the future. However, 49% of shoppers experience bad execution during BOPIS trips to stores such as long queues (27%), inconvenient pick-up location (19%), and order not being ready (14%) or poorly trained staff (14%). Without everything working flawlessly, the impact on shoppers will inevitably be disappointment instead of delight. Omni-channel transformation in retail must proceed on a two-pronged path: one that removes technologies in siloes that manage orders, inventory and store operations, and another that re-engineers processes, policies, job training and communication.
Loyalty. Retailers are not using loyalty programmes as well as they might and the result is that customers are dissatisfied with them based on a low level of perceived value and ease of use. In fact, shoppers are willing to support the programmes in overwhelming numbers, as they have a high degree of interest in them: 75% of shoppers belong to up to 10 schemes across industries and 92% belong to at least one. 62% of shoppers across industries believe being a member of a loyalty scheme is beneficial, yet only 26% of shoppers believe retailers have compelling programmes. Compared to other industries, retailers are not making the most of the opportunities of loyalty programmes by not recognising shoppers based on their status (76%). Schemes in the airline industry, for example, influence 84% of customers to engage with the brand. These findings expose the gap between what retailers are offering and what is required to encourage shopper loyalty. Every retailer should have a plan in place to increase these metrics.
Digital shopping. Shoppers look for a robust digital shopping experience with clear preferences for convenience, consistency, product value, data security and relevant engagement. When making online purchases shoppers want ease of finding information (72%), ease of returning products (71%), fast and easy checkout (66%), and consistent cross-channel experiences (55%). In fact, 63% of shoppers say they prefer self-service capabilities. This is an interesting insight that could point to a future where retailers are advised to support a host of self-service capabilities in stores. Mobile coupons have become increasingly popular due to their convenience and 28% say they are more likely to use a mobile coupon than a traditional coupon. However, relatively few retailers offer mobile coupons today.
The fifth annual RIS/Cognizant Shopper Experience Study is a comprehensive way for retailers to see and understand their customers with greater clarity. As with earlier studies we wanted the respondent pool to mirror the prime shopper population, especially in such key areas as gender, age, and income. This was achieved through a total respondent pool of 5,311 global shoppers who were polled in May, 2014.