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30 November 2017

In the age of bullish digital sales what is the future of customer experience in retail?  

Mel Drummond, Director at KVH Media Group, retail customer experience experts and media, marketing, and content specialists tells us what the future holds on the shop floor...

 

We are all changing as consumers; our behaviour and expectations are evolving quickly; now that we have more choices available, more voices influencing our decisions, and 24-7 convenience.

We’re more demanding now, and retailers have been trying to catch up to this new level of expectation from us; we demand something beyond the traditional transactional shopping experience. Customer experiences are fast becoming a primary indication of success or failure for retailers.

The future of retail customer experience is an exciting one, as we now have more data and flexibility to tailor solutions to meet customer’s needs.

Retailers are evolving their customer experiences, changing content, media, and marketing messages, to craft those “memorable moments” for customers.

 

Retail Approach to Customer Experience

Customer experience in retail can be broken down into these key features;

Ease to find and purchase: For customers who know what they want, they need to find it and get out quickly! Those who are unsure want to be given answers and a reason to make a specific purchase. 

Tailored to fit: We can increasingly have exactly what we want from a product, whether it be size, shape, power, colour etc. Going to that “next level” of custom service for shoppers is key. Using research to find out what your customers want, whether it’s digital insights or surveying shoppers or markets, using this information to tailor your service is going to be crucial.

Value today and onwards: Customers are becoming more aware/cynical of “price drops” or “buy one get one free” offers. I’m not saying that they won’t buy, but they want to see ongoing value from these purchases. Giving customers consistency of service, or a product which is objectively superior, is increasingly important for both brands & retailers.

Be memorable: Memorable spectacular experiences, or massive events, often get all the attention when it comes to being memorable, but it’s not just about those big investments. A memorable customer experience can be as simple as a story that connects with your customers. For example, Sainsburys “What’s for Dinner” advert:

You can create memorable moments with retail environment touches; mothercare in their Crown Point Leeds store has a café with a soft play area, and a salon where younger children sit in cars which raise up for the hairdressers to cut their hair.

Reviewed and researched: Consumers want to feel like they are making the right purchase. Make it easy for them to see other user’s reviews, offer research that you’ve carried out, share third-party articles which give reviews on your products. If a shopper cannot get review content from you, they’ll find it somewhere else, or get it from a competitor. Always aim to be the one providing them with review content, help them make that purchase choice.

Building a Retail Experience Strategy

Once you understand what your specific customers want, and the experiences they value, it’s all about developing a strategy to provide them with that product/service and experience consistently. Joseph Pine II illustrates how customers want to experience their shopping by breaking into 4 realms in The Experience Economy;

Entertainment Realm - To be enjoyed, make the experience fun

Educational Realm – To learn, be taught, or experiment to create something new

Esthetic Realm – To be immersed in an experience, to exist within it

Escapist Realm – To actively experience escaping “the norm” through thought or action

It’s also important to consider that the retail customer experience begins before a consumer sets-foot in your venue, store, or click through to your website, or open your app.

A customer’s anticipation about a purchase can be a more intense emotional experience than the product itself. For example; booking a holiday, buying a car, or the latest iPhone. It’s important for brands and retailers to invest in this pre-purchase experience; plan teaser campaigns, or try before you can buy opportunities, pop up shops, personal event/launch invites to key target audiences, merchandise to keep the excitement levels at fever-pitch!

We also need to consider how to boost customer’s post-purchase experience, e.g. Land Rover offers a free off-road experience for every purchase, whether it’s a new or second-hand vehicle! There’s an art to building brand loyalty without annoying your customers.

Experiential Selling

It’s long been accepted that the ambient in-store atmosphere has a significant effect on customers. All the below are all elements to create that experiential selling space;

  • Music choices/soundscape
  • Scents
  • Tastes, through sampling activity and evoked memories/expectations through imagery
  • Lighting
  • Colour schemes
  • Store design
  • Aisle spacing
  • Product placement, both category placement & on-shelf level visibility 
  • Location and convenience
  • Advertising content, frequency, design, and placement
  • Messaging & advertising media relevance/personalisation to customers
  • The prevalence & type of brand marketing, promotions, sales, deals etc.
  • Interactive media elements (digital screens, augmented reality technology etc.)
  • Seasonal product visibility & promotional strategies
  • Signage/navigational information for customers (or a deliberate lack thereof!)

These are all variables which retailers can control in pursuit of the perfect in-store experience for customers to improve their mood, dwell time, and average basket spend.

Getting these elements right, coupled with a good culture of staff training, will also get your staff “on-board” – it’s an environment they work in, you want it to be a pleasant one. Topps Tiles use their in-store audio environment to directly engage staff members during less-busy periods, with brand news, job opportunities, and interactive quizzes & games. Having this level of involvement and ownership over their working environment helps keep the team energised and happy, which in turn improves the customer service they offer, boosting customer experiences.

Getting the in-store atmosphere right is a constant challenge. Different retailers will have different customer demographic groups to target, and different locations will attract different customers with different expectations. One size definitely won’t fit all.

Digital Experiences

Omnichannel and online only-retailers are also finding their bottom lines effected by consumers prioritising experience. With conversion rate (and consequently, revenue) so impacted by user experience, so it’s impossible to ignore.

Google have warned that pop-up ads are a negative ranking factor for SEO. No matter how effective they may be in improving conversion or retention rates, because they’re unpopular and irritating to users, Google is less likely to rank sites with pop-up ads highly in the search engine results pages (SERPs). Other user experiences are ranking factors too; page load speed, content quality, adverts on a page etc. all contribute towards how competitive a page/site is in the SERPs.

Most users are still annoyed/uneasy with online advertising. The rise in the number of users with ad-blocking software, to improve their own experiences online, is problematic for sites which rely on ad revenue. Some of those websites are asking users to disable ad-blocking to access their content.

Surveys show that a minority of users with ad-block software are willing disable those blockers in exchange for access to content. With the overall number of users with ad-blockers at 11% and growing by 30% year-on-year, it’s obvious that site owners need to come up with a better solution, or risk losing increasing amounts of traffic.

Who’s Doing Customer Experience Right?

Asda lead the way when it comes to customer’s audio experiences. They were the very first UK retailer to roll out a live radio service for their shoppers in 1992, and they’ve built on that market-leading position over the last 25 years, enabling uniquely localised audio messaging across their stores, so that customers feel completely at home in their “own” Asda store.

A more subtly compelling example is the rise of Build a Bear Workshop, a business which, since its founding just 20 years ago, has been stunningly successful; selling over 125 million stuffed animals from more than 400 stores worldwide. The source of their success was not based in advertising, or pricing, or even the quality of their products - it was the unique “retail-experience” offered to customers which led to their growth.

Lush rolled out a programme of events last year, hosting free fitness classes as well as beauty sessions. The retailer partnered with Psycle and HulaFit to offer various levels of workout sessions, even hula-hooping in-store! Their beauty sessions focussed on teaching shoppers how to build a personal skincare routine and helped people to learn about hair growth and structure.

Holland & Barrett are a fantastic example of a specialist retailer growing. The health and supplements chain has grown its number of stores, and introduced their ‘More’ format stores; these stores focus on an expanded range of free-from products, beauty and personal care items, as well as sports nutrition and vitamins/supplements. They are also more experience-focused with food counters, beauty treatment bars and a beauty kitchen.

Naked Wines showed how online specialist retailers can improve customer experiences by refining its email marketing efforts to offer a personalised selection to customers, giving them wine options which are closely aligned with their individual tastes and preferences. By streamlining the process for customers, and using data to allow people to find relevant products easily, they’ve provided a personalised customer experience.

Specialist chocolate retailer Hotel Chocolat has launched “Chocolate Lock-In” events at their stores across the UK, in a dedicated effort to boost the experiences on offer to their customers. The events add to Hotel Chocolat’s already-impressive experiential offering; their restaurants in London and Leeds, and the “Bean-to-Bar” experience sessions, which educate customers and allow them to create their own bar of chocolate from scratch!

Consumers are increasingly likely to spend more of their disposable income on experiences, whether explicitly by spending on holidays and activities, or indirectly by choosing a more expensive product/service because of the added value of an experience. For example, consumers opting for a wedding dress shopping experience in a group, at a boutique store, by appointment, with champagne, in a semi-ritualised way, when the same product can be purchased for much less elsewhere.

And then there are the brand-new players in the retail space; Amazon is experimenting with unique customer experiences in the convenience niche; with a checkout-free concept store in Seattle. “Amazon Go” stocks ready-to-eat meals, snacks and other essentials. Customers use an app to enter the store, then a combination of technologies detects which products the customer chooses while in-store. When the customer leaves, Amazon’s “Just Walk Out Technology” calculates the bill and automatically bills the customer’s account.

Conclusion

As customer expectations continue to evolve, there will be seismic shifts in the retail landscape over the next decade. We’ll see retailers rise and fall on the strength of their experiential offering to consumers.

The experiments and trials going on across the world right now are hugely exciting. Augmented reality advertising, sci-fi levels of personalisation in advertising and retail technology, virtual mirrors in the beauty sector, and a massive variety of health & wellness treatments being offered to shoppers in-store. But it’s not just technology driving those changes in retail.

Delivering something beyond the traditional transactional shopping experience is important for any retailer looking to stand out in a crowded market. Experiences which are exciting and novel, have other benefits; as customers post about their experiences with your brand to their networks on social media, drawing in more visitors.

Ultimately, we’re going to see retailers, brands, agencies, consultants, marketing and branding teams etc. all having to learn (quickly!) how to properly harness the power of customer experiences and events. How to pique an audience’s interest, effectively build anticipation with aligned messaging across all channels, and how to get the full value from an experience. Utilising the data, heighted interest, media and social coverage, positive sentiment etc. and effectively converting that into revenue.

 

Written by Mel Drummond, Director at KVH Media Group; Retail customer experience experts. Media, marketing, and content specialists.