In the wake of significant inflationary pressures leaving consumers with less disposable income, retailers can’t afford to ignore the critical importance of creating exceptional customer experiences.
Verint has conducted independent research into the positive influence customer experience strategies have on earning shoppers’ discretionary dollars in the inflationary era.
The data, based on a survey of 2,000 U.S. consumers who had purchased from a mass market retailer from February to July 2022, provides insights into how retailers are doing in their customer experience initiatives to maintain “share of wallet” at a time when global inflation is soaring.
To the Retail Customer Experience Victors, Go the Spoils
More than two-thirds of consumers surveyed are less confident in the economy than a year ago and 76 percent are spending less, trimming retail purchases.
Struggling with inflation and economic uncertainty, 56 percent of shoppers indicated “value for the money” as one of the two most important factors impacting their loyalty to mass market retailers. The survey also reinforced the fiscal benefits of customer retention and keeping existing customers happy. Ninety-one percent of consumers shop at their favorite mass market retailer at least once a month, with 83 percent spending $50 or more on average.
After having an amazing customer experience, 88 percent are likely to make a repeat purchase, 82 percent are likely to recommend to friends or family, 68 percent are likely to join a loyalty program, and 63 percent said they are likely to write a positive review.
At the same time, retailers that delight first-time shoppers can also benefit greatly. Three-quarters of consumers who tried a new mass market retailer for the first time in the past six months shopped there more than once, with 90 percent of first-time shoppers making purchases at least once a month thereafter.
Still, a negative customer experience can send shoppers packing. Reasons that consumers were likely to stop purchasing from a retailer included: if a customer service issue isn’t resolved in a single attempt (62 percent), if unable to communicate on their channel of choice (57 percent), if forced to repeat themselves (55 percent), and if they have to endure long wait times (50 percent). Customer patience has been depleted and there are competitors eager to take advantage of any less-than-stellar retail experience.
Brands Must Optimize All Channels for Engagement
Email, phone and in-person interactions are the most commonly used channels for brands to interact with their customers. However, our research found that customer interactions are increasing most on modern digital channels, and as customer journeys become more complex, it’s important to develop effective omnichannel strategies to cover all bases.
Opportunities for digital engagement are not being optimized; 62 percent of companies have websites, online communities, or digital forums, but less than 15 percent of customer interactions happen there, and it’s a similar story for messaging and social.
Meanwhile, overall customer interactions are growing in volume; 82 percent of respondents say their interactions are increasing on at least one channel. Modern digital channels saw the most frequent reports of volumes increasing, with social media (61 percent), chat (56 percent), messaging (56 percent) and website, online community, or forums (54 percent) the top four. There’s room to expand the number of conversations across those four channels, with the average percentage of customers interacting with companies less than 16 percent.
At a time when customer retention is extremely important, concentrating only on the traditionally most popular channels such as email, phone, and in-person, is not an option. With only around one-third of people surveyed saying their company is looking to add chat and messaging in the next 12 months, companies could be missing the chance to engage customers via these increasingly popular digital channels. Automation will be the key to engaging on these channels at scale and managing the increasing volume of customer interactions.
The Importance of Knowing Your Customer Better
Not only is providing amazing experiences likely to generate higher revenues through repeat purchases, but great customer experience is also likely to lead to more referrals and grow a company’s loyalty program.
The first step is understanding exactly how a company can deliver standout omnichannel customer journeys and ensure they keep their share of wallet during times of economic hardship. Then companies can pinpoint which areas of their customer engagement strategies are working well, or badly, and act swiftly to make any required changes.
This is where collecting customer feedback in real-time becomes critical. Gathering customer insights in the moment enables retailers to take immediate action, often through customer self-service or a hand over to a contact center employee for assistance. Real-time digital feedback data means issues can be identified and handled early, on a micro and macro level, before becoming widespread.
Automation also plays a key role in the delivery and analysis of customer insights. Companies can drill down into the recurring customer issues and identify areas for improvement across each touchpoint and channel. With the level of automation growing for 8 in 10 companies, ensuring it’s deployed on the right channels, for the right use cases, will be key.
Keeping Customers Coming Back
Today’s retailers are putting a premium on building positive experiences across multiple engagement channels to help retain loyal customers during the economic downturn. Success is predicated on retailers embracing a channel-less mentality and a “One Workforce” approach in which a high-quality customer experience is guaranteed, no matter what channel is used or what type of employee (human, bot, hybrid) handles the engagement. It makes providing a consistently exceptional customer experience possible.
About the Author
Jenni Palocsik is Vice President, Marketing Insights, Experience and Enablement, at Verint.