How to improve the retail customer experience

Author: Adam Bunker

Subject Matter Expert: Stephanie Pendolino

What is retail customer experience?

Retail customer experience describes the overall emotional and cognitive result of the interactions provided by a business across all its retail touchpoints, as viewed through the customer’s eyes.

To make that easier to imagine, we’ll use an example of a customer purchasing online groceries. Beginning on the supermarket’s website or downloadable app – or even a third-party app like Instacart – a customer browses products and fills their shopping cart. They make a purchase through your online card payment system and select their delivery slot. On their chosen day, your delivery service arrives to deliver the goods.

The customer notices something is missing, so they contact you through their app, online, or via telephone to resolve the issue. Your retail business responds over live chat, apologizing and providing some form of discount or points reward. But, while they wait for a response, the customer might head over to a third-party review site to leave a negative review.

This everyday retail customer experience contains all kinds of touchpoints – digital and in-person – that can make or break a retail experience. At each customer journey touchpoint, negative or positive emotions could be sparked by how your business performs, meaning your customer experience journey has to be planned and executed with care.

The retail experience is the sum total of all of the touchpoints within this single customer’s purchase – multiplied by as many retail customers as you have, and as many purchases, inquiries, or website and app visits they make with you. Thousands of small customer experiences feed into a single, overall impression. Success across all this customer engagement requires almost every part of your retail business to be right.

Deliver better in-person experiences with Qualtrics Location Experience Hub

Why is retail customer experience so important?

Retail experience is a crucial differentiator for businesses. While price, value and service remain important, it’s the overall – and sometimes elusive – customer experience that turns a casual browser into a committed brand advocate.

The XM Institute found that happy customers are:

• More than 5x as likely to repurchase
• 6x as likely to forgive
• 8x as likely to try other products/services
• 3x as likely to spread positive word of mouth

Retail businesses frequently battle to be recognized among many others like them. To stand out, brands need to do more than just offer the cheapest products or the widest range. The potential to save money and browse a good choice of products might initially attract customers, but with an ever-increasing number of competitors, experience can be the deciding factor between your brand and another.

When you differentiate on customer experience, you’re not just setting yourself apart from the competition on pragmatic elements such as price or convenience. You’re building and strengthening a relationship with the customer that’s built on positive emotion.

Customers naturally gravitate towards businesses that make them feel good and meet their expectations – and they stick with brands that demonstrate a consistent, cohesive identity that matches their values, lifestyle, and outlook.

Research shows that a good customer experience and strong brand connection can even win out over lower prices from your competitors. Research from Capgemini found that 8 in 10 customers would increase their spend with a company in return for better experiences.

Capgemini also revealed a discrepancy in how well big businesses are doing at CX, compared with how their customers rate them. They report that while three-quarters (75%) of organizations believe themselves to be customer-centric, only 30% of consumers agree.

So while more and more companies are waking up to the possibilities of experience-based retail, there’s a lot more work to do to make that potential a reality.

Digital retail experience vs. in-store retail experience

While in-store shopping is retail in its oldest form, the way offline and online shopping has merged in recent years means that retailers need to face interesting new challenges.

In-store experiences are increasingly interwoven with digital ones, with today’s customers using smartphones and tablets – both their own and those provided by the retailer – to check prices, scan reviews, or reserve items remotely via an app. Other customers, meanwhile, will use self-checkout options that might need human intervention at just the right moment.

These merging, interweaving journeys mean in-store retail is more and more becoming part of the wider omnichannel retail experience, and should be treated as such within retail customer experience strategy.

Doing so means being able to combine insights from touchpoints that span both of these realms. Online reviews, customer website and app data, third-party app feedback, online order information, social media mentions and in-store experiences all need to come together to provide teams with a clear view of what’s happening – and where the pain points lie as customers weave between retail and online environments.

How to improve the retail customer experience

Plan, evaluate, and then act

It can be tempting to get straight to work improving experiences, but smart retail strategists wait until they have the full picture. The first step in your retail experience improvement journey is to plan where in your customer’s journey you need to gather data on the retail user experience, and then evaluate it for insights into improving shopping experiences.

Developing priority touchpoints to learn more about customer experience and piloting them can help you determine your visitors’ intent, how effective their omnichannel experience has been and their likelihood to recommend and return, as well as much more. You can then extrapolate this information to resolve issues such as online purchase abandonment and plan further touchpoint evaluation.

Evaluate retail experience at the most effective touchpoints

Retail customer experience is cumulative – it is formed over many interactions. When one of these interactions is unsatisfactory or goes in a different direction to the one that’s expected,  it can negatively affect the overall customer experience.

That’s why you should be collecting experience data at as many touchpoints as is effective. You can use digital tools like rating scales, intercepts, thumbs up/thumbs down buttons, and comment boxes to get information from customers in a way that’s low-effort and non-intrusive, but also worthwhile. Personalization and optimization become easier when real-life customer experience is taken into account. You can also use Digital Experience Analytics to capture user behavior data on your website without bedding to ask a single question.

You can use these concepts in your physical store locations too, via tablets and touchscreens, post-visit requests for feedback by text message, and through interactions with your staff. However, these should be trialed and only deployed when most likely to be effective, as customers are now likely to prefer a swift shopping experience.

Today’s leading retailers mine online reviews and social mentions alongside survey feedback, with the resulting sentiment analysis acting as a valuable source of location-specific insights.

Improve the employee experience

Improving employee experience can have a positive effect on customer experience since the two are closely linked. Engaged employees create better experiences for customers because they’re more innovative, more present, and ultimately, more personally committed to your brand values.

This approach can be used both in physical stores and online. By creating meaningful connections between employees and customers, retail experiences become more personalized and more memorable, leading to better recommendations in online reviews and on social channels.

Invest in customer service and omnichannel touchpoints

Customer service and customer experience are two sides of the same coin. Customer service plays an important role in upholding a great customer experience, which is why it makes sense to invest in the people and processes that customers encounter when they reach out to you with a question or concern. Make sure that employees are empowered to resolve problems and build trust with customers in a way that’s authentic to them.

Give employees the training and support to handle customer queries with confidence. Providing a ticketing system that helps employees keep track of customer information will improve the experience for both customers and employees, and help you deliver the best customer service experience.

Offering omnichannel solutions can also be effective in providing a higher quality retail experience – not everyone would like to use a webchat, telephone option, or in-person conversation to resolve a problem.

Close the loop with detractors

We often stress the importance of closing the loop with customers. That’s because it can be absolutely transformational for the customer experience. When you close the loop, you treat a customer’s feedback as the start of a dialogue, not as a piece of static data.

By reaching out to customers who’ve had a poor experience, finding out what went wrong, and taking ownership of finding them a solution, you can deliver an experience that’s so positive it actually cancels out the negative effect of the original issue.

Doing so is increasingly important with the prevalence – and influence – of online reviews and social mentions. Customers consider these as important factors when deciding where they will make their next purchase. Negative online reviews, especially ones left unresponded, will hurt your brand and deter customer consideration.

Leverage your loyalty program

Got a customer loyalty program? You may already have in your possession the foundation stone of a first-class customer experience program. Customer loyalty programs contain a self-selecting sample of your most loyal customers, along with demographic information and purchase history that helps you understand who they are, what they need, and what they most care about. You can use your loyalty program members as a survey panel to collect initial research for your retail CX program and use that data to tailor later customer experiences.

Use a single integrated CX management platform

As we’ve described, retail customer experience is holistic. It’s the result of many thousands of interactions, made by many customers across many journeys. It also touches multiple facets of your business, from customer service agents to logistics and delivery, in-store employees to digital platform managers, social media managers to the person who unlocks the store in the morning.

For all these reasons, it’s crucial to have a customer experience management platform that’s capable of collecting, analyzing and acting on data from across every part of your business, and making the right information available to the right people at the right time. Having one platform enables you to link data points to one another more easily, and spot trends more rapidly than when the data is disparate.

How to measure retail customer experience

You can only improve the customer retail experience if you’re continually monitoring the results of any action you take. Measuring success in experience management is all about taking stock, working to close experience gaps, and then remeasuring to gauge progress.

This is an ongoing process, rather than a one-and-done situation – and doing it right requires collecting feedback and tracking data across a myriad touchpoints:

1. Customer Feedback

Surveys – both online and in-person via in-store feedback devices – help retail businesses understand how each interaction went, and where there’s room for improvement. When this kind of solicited, qualitative feedback is collated and analyzed for trends, you can understand a general consensus of opinion.

If you’re looking for more quantitative, metricized feedback, then surveys can be used to produce both a Net Promoter Score (NPS) (How likely are you to recommend us?) and Customer Satisfaction Score (CSAT) (How satisfied were you with your visit?). Modern experience management suites can also help ascertain a Customer Effort Score (CES) (How easy was it to find what you were looking for?).

You can also bring in your online review star ratings; if you measure your CSAT on a similar five-point scale, you can begin to compare these across your different feedback sources.

Bring unsolicited feedback from online reviews, social mentions, and other sources together, then utilize sentiment analytics to gain a comprehensive view of the most important things you need to do to improve your customer’s experiences.

Online reviews and social media mentions

It pays to listen to what customers are saying. Today’s top social listening tools can help you automatically scour platforms like X, Instagram, and TikTok for relevant posts and videos, and analyze their content for sentiment and meaning using Natural Language Processing (NLP). This helps retail employees gain insight into customer needs and preferences, enabling a more tailored retail experience.

Online reputation management software, meanwhile, should also be able to help you keep tabs on sites like Google Reviews and Yelp – and flag when a review needs an urgent response in order to right a wrong or amplify an advocate. This is crucial in today’s retail industry, where customers interact across multiple channels and expect a consistent experience.

Online reviews and social mentions each require unique monitoring and response strategies – rather than a blanket approach – but they come together to form an invaluable source of customer feedback, as well as an opportunity to turn negative experiences into positive ones, ultimately encouraging people to keep coming back to your retail store.

2. Observational and operational metrics

Financial and observable metrics can help you understand how your retail experience management tactics are working, since improved experience should lead to an uptick in metrics denoting business success.

For example, high return rates might signal dissatisfaction or mismatched expectations, while high footfall signals that more people are coming into your store. Conversion rates – the ratio of visitors that become buyers – is another metric that shows how well your experiences is turning shoppers into customers.

3. Employee engagement feedback and scores

Your staff’s perception of customer interactions is a useful indirect indicator, as is their perception of their ability to do their job well. The more engaged employees feel, the better the retail environment. After all, happy employees provide better customer service, and that has a knock-on effect on customers’ perceptions of your brand.

Retail customer experience examples

Here’s how some leading retail businesses have used retail experience data and insights to improve their results.

• Footwear giant New Balance partnered with Qualtrics to turn siloed CX data points into a unified nerve center for customer insight. With a goal of bringing customer experience data into a single source of truth – and getting a real view on the voice of the customer – New Balance used the Qualtrics XM Platform® to deploy tailored CSAT and NPS surveying, before using our Discover model to bring unstructured data from other sources into the mix. That meant the brand could proactively close the loop on customer feedback with a more omnichannel approach, and turn typically disparate feedback into actionable insight to help identify and fix pain points.
• Clothing retailer LL Bean improved the retail experience through better knowledge of its customers. Focusing on its strategically most important customer segments, the brand researched what mattered most to this group, using listening and analysis tools to provide offers, content and messaging that reflected the customers’ personalities, lifestyles and preferences. As a result, they saw a threefold increase in customer lifetime value and better retail experience.

Retail customer experience trends

The retail environment is ever-changing, so it pays to know where the wind is blowing when it comes to customer experience. Here are the three biggest trends affecting the industry right now:

1. ‘Phygital’ is the new norm

Whether it’s ordering online for in-store pickup, booking an appointment online for an in-store consultation, or purchasing a large item in-store that will then be scheduled for an at-home delivery, customers increasingly expect to be able to move fluidly between channels – and for brands to bridge those divides seamlessly.

That means seamless transitions between the physical and digital world, with personalization, customer history information, and differentiated value.

As customers move back and forth between in-store and online, and between social media and customer support, their “phygital” journeys require cohesion.

Store managers therefore need real-time insights and tools that can help drive consistency and efficiency, while also providing memorable on-brand in-store experiences that keep guests coming back.

2. Employee experience is connected to customer experience

High employee turnover and low employee engagement add risk to any retail business, with a tangible downstream impact on customers. But it’s worth remembering that training costs are at their highest when employee turnover is high – so keeping employees engaged, happy, and able to do their best work is vital.

That means investing in employee experience software that can spot trends, benchmark satisfaction, and proactively find new opportunities for coaching and improvement.

Ultimately, retail customers are far less likely to have a positive, memorable, and on-brand experience if employees are not adequately trained or empowered to support them – or motivated to do so.

Frontline empowerment explained

Investing in your on-location teams will have a direct, positive influence on your retail customer experience. That’s because giving people the tools they need to perform will lead to more energized, active and capable frontline employees. Often, this means deploying software that can unite customer expectations with onsite capabilities. Our research shows that while over a third (38%) of employees felt they were burnt out, the top driver of burnout was ineffective processes and systems.

But if your retail customer experience suite is able to deliver real-time insights, help your teams unite physical and digital experiences, and enable them to better understand customer demand, they’ll be ready for anything that comes their way. This is frontline empowerment in action.

3. You’re competing for consideration amid a sea of reviews and social mentions

Reviews on sites like Google Reviews, and mentions about your brand on social media platforms like Instagram and X, increasingly dictate customer consideration and purchasing behavior. With people increasingly careful about where they spend their money, the onus is on retail businesses to not only try and encourage positive reviews, but act appropriately when bad ones arise.

A lack of personalized, on-brand response here will harm your online reputation, and that will directly affect in-store footfall. The key is having an experience management suite that can monitor for this kind of feedback across touchpoints in real time, and a proactive set of processes in place to make good on any bad experiences.

Advancing the retail customer experience with AI

Bringing the online and in-store retail experiences together is no mean feat. What it takes is the ability to bring every signal together into one place, sift through the customer data, and understand customer opinion.

AI-enabled tools are providing a way forward, here. With AI, retailers can be everywhere at once, listening out for customer information and feedback, scouring data from physical stores, online stores, and other digital sources with a unified goal – surfacing insights that can help in-store, digital, and customer support teams improve the retail customer experience in every retail setting.

Qualtrics, for example, helps retailers monitor and optimize customer satisfaction across multiple channels, supporting seamless omnichannel shopping experiences – and identify opportunities to increase loyalty, revenue, and foot traffic. Using AI, we help more than 450 leading retailers track the buying journey from start to finish, with rich insights into the key drivers of loyalty, customer retention, and spend for every customer segment.

That means increased customer loyalty, revenue, share of wallet, brand recognition, employee engagement, productivity, and retention.