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Optimising the retail customer experience

13 min read
Consumer shopping behaviour has changed dramatically in the last two decades. Here’s why the retail customer experience is such a key part of your omnichannel experience strategy.

Experience is a crucial differentiator for retail 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 experience definition

Before we go further, let’s unpack what we mean by retail experience.

Retail experience definition: 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.

Let’s say you go online to order your weekly groceries. You begin on the supermarket’s website. Maybe you locate and download their app. You browse the products and fill your shopping cart. You pay for the items using their online card payment system and choose your delivery slot. On the appointed day, the driver knocks on your door and hands you your items. While unpacking, you notice that something is missing, so you contact the company through the app to enquire. They respond over live chat, apologise and refund your account.

This everyday retail experience contains all kinds of touchpoints, digital and in person. At each touchpoint, negative or positive customer emotions could be sparked by how the business performs.

Maybe the supermarket website is really easy to use, and exceeds your expectations by providing personalised suggestions of special offers on the things you buy. But when the driver comes to your door, they’re unfriendly and make you feel rushed to accept the bags. Then there’s the missing item – it makes you feel frustrated, but maybe you’re pleasantly surprised by how easy it is to resolve and how efficient is the person who answers your chat.

The retail experience is the sum total of all of the touchpoints within this single customer’s purchase – multiplied by as many customers as you have, and as many purchases, enquiries or website visits they make with you. Thousands of small experiences feed into a single, overall impression. It’s a simple idea, but one that requires almost every part of your business to get right.

Why is customer experience so important in retail?

Retail is a pretty crowded niche. To stand out, brands need to do more than just offering the cheapest products or the widest product range. Saving money and having a wide choice of things might bring customers to the store, but they’ll leave again just as soon as someone else pulls ahead of you. As soon as your competitor undercuts you or expands their offering, there’s no longer any need for the customer to stay. You’re effectively stuck in a race to the bottom.

When you differentiate on customer experience, though, you’re not just setting yourself apart from the competition on pragmatic elements like price or convenience. You’re building and strengthening a relationship with the customer that’s built on positive emotion. Customers will naturally gravitate towards businesses that have made them feel good and exceeded their expectations, much in the way they are drawn towards other people who have treated them well.

Research shows that a good customer experience can even win out over lower prices from your competitors. Bain & Co found that 86% of consumers are willing to pay more for a better customer experience. Research from Capgemini turned up similar results, finding 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 organisations 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.

eBook: Become a leader in retail customer experience

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In-store retail experience

In-store shopping is retail in its oldest form, but it’s undergone some dramatic changes, particularly in response to COVID-19. Where once we treated in-store browsing as a form of leisure activity, post-pandemic customers may prefer a more focused experience with the ability to find what they need, pay and exit the store in the shortest possible time.

In-store experiences today are typically interwoven with digital ones, with customers using smartphones and tablets – both their own and those provided by the retailer – to check prices and reviews before they make a purchase. Checking stock and reserving goods may happen via app. They may also use digital tools to navigate to their nearest store and check opening hours or facilities in advance of a visit.

In this way, in-store retail is almost always part of an omnichannel experience, and should be treated that way as you design your CX strategy. Rather than treating in-store as a stand-alone customer journey, it may be helpful to view it as one of many possible omnichannel journeys that include both digital and physical touchpoints.

Digital retail experience

Shopping online, shopping on a smartphone – it’s easy to forget how recently these behaviours became the norm, so completely have they taken over as our default way to shop.

Optimising your website and app can play a major role in creating great retail experiences. Following user experience best practices will help make sure users can find what they need, when they need it and navigate through their journey towards a successful purchase without too many pain points.

Digital retail environments are also fertile ground for collecting customer experience data. As well as asking for qualitative feedback using site intercepts, surveys and contextual feedback buttons and ratings, you can record operational data such as bounce rates, drop-off and cart abandonment, most frequently visited pages and conversion rates.

Combining these with your experience data within a centralised platform can help you build a rich and detailed picture of the “what” and the “why” of your digital retail experience. You can use this data not only to improve customer experiences in the present, but to make predictions that will help guide your decisions in the future.

Retail customer experience strategies

Listen, 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 listening. That way you can find out who your customers are, what they care about, and where you should act first to make the biggest positive change.

Place listening posts at every possible touchpoint

Retail experience is cumulative – it comes from a lot of different places at once. And when one of these goes wrong, it can drag the overall experience right down with it. That’s why you should be collecting experience data at as many touchpoints as possible. 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. You can use these concepts in bricks-and-mortar locations too, via tablets and touchscreens, suggestion boxes, and through interactions with your people.

Improve the employee experience

It may seem a roundabout way of doing things, but improving employee experience can have a knock-on effect on customer experiences, since the two are closely linked. Engaged employees create better experiences for customers because they’re more innovative, more present and more personally committed to company values.

Use transactional NPS

Measuring NPS on a transaction level means you get detailed information about every touchpoint in the customer journey. NPS is a great listening metric because it’s very simple – just one question that customers can answer with a yes or a no, which speaks volumes about their level of customer loyalty and brand advocacy.

Invest in customer service

Customer service and customer experience are two different things. But service does play 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, and make sure that pressure to be efficient and productive doesn’t become counterproductively high. Providing a ticketing system that helps employees keep track of customer information and up-to-date case notes will improve the experience for both customers and employees, and help you deliver the best customer service experience in retail.

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.

Leverage your loyalty programme

Got a customer loyalty programme? You may already have in your possession the foundation stone of a first-class customer experience programme. Customer loyalty programmes 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 programme members as a survey panel to collect initial research for your retail CX programme.

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 people to logistics and delivery, in-store employees to web designers, 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, analysing 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.

Retail customer experience examples

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

  • Delivery Hero, a platform that connects delivery restaurants with home-delivery customers, achieved a 30% improvement in transactional NPS scores from its end-users by improving the retail experience. Delivery Hero’s team created customer journey maps and used listening at each touchpoint to find out where the customer pain points were. They also used Qualtrics analytics tools to dive deeper into the emotions and experiences driving different NPS ratings.
  • Clothing retailer LL Bean improved the customer 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.
  • Spanish supermarket chain DIA successfully moved from a price-differentiated business model with a stripped-back experience to a more customer-centric approach. Using its loyalty card data as a starting point, DIA’s team began building a picture of its customer base using experience data, in order to create experiences that resonated with customers.

The brand helped promote better experiences by rewarding employees who delivered great customer experiences, linking in-store NPS to employee rewards. The brand saw a 50% improvement in NPS score within just 6 months of making the changes.

eBook: Become a leader in retail customer experience