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Retail: When the race to win pounds heats up, amazing customer experience becomes a secret weapon.

Retail: When the race to win pounds heats up, amazing customer experience becomes a secret weapon.

Retail: When the race to win pounds heats up, amazing customer experience becomes a secret weapon.By Elissa Quinby, Snr director, Global Retail Insights, Quantum Metric

Levels of consumer uncertainty are obscenely high in the UK, unsurprisingly impacting the way people spend their money, particularly when it comes to shopping. The cost of living crisis and rapidly rising inflation alongside political and geo-political uncertainty have led to downtrends in overall spending, with cutbacks in the frequency of purchases. Indeed, data from our own benchmarking survey revealed that weekly eCommerce conversion rates declined 12% between May and July 2022.

With higher prices leading to a change in shopping habits, 37% of consumers are now pre-planning and buying goods all at once, in an effort to stick to their budgets. eCommerce retailers are therefore facing a new challenge, whereby one unsatisfactory experience may threaten a purchase, steering people away indefinitely. With that in mind, keeping customers happy with frictionless customer experiences has become more important than ever.

The impact of Covid

That being said, providing a seamless customer experience (CX) isn’t a new phenomenon – the pandemic put it firmly on the agenda, with people adapting to digital out of necessity. As the world moved online, consumers became increasingly demanding, with CX a differentiator.

The shift to digital-first is set to stay – around 70% of Brits prefer to buy online and via mobile, up from less than 50% pre-Covid. Couple that with less predictable patterns of consumer behaviour and economic uncertainty breeding cautious customers, and offering standout CX is now a deal breaker for retailers.

Value as a driving factor

To remain competitive, retailers must provide value. That may sound obvious, but it doesn’t just mean offering high-quality goods at the ‘best’ prices. Budget-conscious shoppers also want knockout experiences, where digital journeys are intuitive, smooth and fast. Supporting that is our latest survey data, highlighting that 27% of consumers are seeking a best-in-class digital experience.

During periods of high inflation, costs are somewhat out of a retailer’s control. One of the few things they can positively influence is customers’ shopping experiences, including browsing, searching, checkout, and post-purchase support.

Combatting economic uncertainty

At the moment, people are making tough and emotional purchasing decisions. According to Deloitte’s Q2 2022  Consumer Tracker, confidence is at its lowest level on record, with essential spending down two percentage points and discretionary expenditure five percentage points lower compared with Q1 2022.

At the same time, eCommerce retailers are faced with cutting their own costs while trying to retain and attract customers. The latter involves using data-driven insights to identify friction in online journeys, pinpointing where shoppers may be dropping off or why they’re abandoning their shopping carts.

Perhaps people aren’t getting the information they need from a website, or maybe it isn’t user-friendly. Alternatively, pages may be overly cluttered and customer journeys too long and inefficient. Meanwhile, glitchy sites raise security concerns and slow load times may lead customers to fear their payment will fail. Only by understanding that friction like that is occurring can remedial action be taken.

UX and personalised touchpoints

As well as identifying and fixing pain points, the user experience (UX) can be further improved by experimenting with design. Here, testing and technologies like AI come into play, helping retailers understand how customers engage with their website, enabling them to better serve their ever-evolving needs.

On the flip side, there’s consumer frustration to consider. Experimentation can be effective, but with fewer opportunities to win customers because of squeezes in spending power, people don’t want to feel confused by regularly changing design layouts and signposting. As a result, accompanying UX updates with clear and effective communications is key. But for consistent improvement, small iterations are the best way forward. They’re rarely noticed but each one takes the overall experience closer to being friction-free.

Alongside this, today’s consumers expect increasingly customised digital experiences. In recessionary times when people are thinking even more about budgets and switching to cheaper white label brands, offering tailored recommendations and promotions are particularly important. Why? They help foster loyalty and higher customer lifetime values (CLVs).

Omnichannel and its impact on CX

Another focus area for retailers is developing and enhancing their omnichannel retail strategy. While outstanding online CX is crucial, businesses should ensure the customer experience is consistent and coordinated across desktop, tablet, mobile and physically in-store.

All channels should work in tandem to understand what individuals want and need – ideally before they’re aware of it themselves. Achieving that requires a multi-pronged approach that seamlessly caters to all combinations of consumer purchasing preferences.

For example, a person may start by researching a product on their laptop before visiting a physical shop to see it in real life, followed by a period of consideration before finally purchasing on their mobile device. In this scenario, retailers need to use data insights to audit cross-device journeys and understand friction points. That way, guesswork is removed and action can be taken to improve the experience based on evidence.

Longer sales cycles

This example also reflects another key pattern of consumer behaviour in retail: inflationary pressure has led to longer and more erratic sales cycles, with people taking their time making purchasing decisions. This could mean browsing today, and creating wishlists, watch lists, or just stacking baskets, waiting for the right time to buy.

It also means that large events like Christmas are being accounted for in shopping patterns much earlier than usual: around 66% of consumers had already started their Christmas planning before the end of July. Festive shopping has turned from a November and December mad-rush into a six-month or more event, meaning retailers have to offer year-round exceptional CX if they’re to stay competitive.

Keeping customers happy

Economic uncertainty isn’t going away anytime soon. As eCommerce retailers look ahead, thoughts undoubtedly turn to consumer behaviour patterns and people’s reduced spending power. The shopping experience has become increasingly mindful and stressful, meaning attracting and retaining customers is more important than ever.

To do that effectively, it’s all about making the purchase experience effortless and friction-free, ensuring people don’t take their business elsewhere. When pounds are sparse, competition for each and every customer becomes all the more ferocious.

Global Banking & Finance Review


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