From the cautious spender to the impulsive shopper: how to serve the customers of the future
Four new customer types have emerged in the post-lockdown world. Is your business ready for them?
Covid-19 has changed the way we live, work – and shop. Businesses across the globe are adapting, vying to tap the new breeds of customers that have emerged from the pandemic.
While online retailers have thrived, tough lockdown restrictions have forced bricks-and-mortar businesses to get creative to keep reaching customers. Meaningful interaction, a focus on brand loyalty and a desire to offer a service that’s somehow both personal and hyper-efficient have taken centre stage.
“Covid has altered consumer behaviour because it has introduced a ‘pattern break’,” says Mark Pilkington, author of Retail Recovery: How Creative Retailers Are Winning In Their Post-Apocalyptic World. “Working from home changes many patterns of consumption. Less is spent on transport and more on telecommunications … Less is spent on extroverted consumption, such as fashion and eating out, and more is spent on introverted consumption, such as athleisure and home improvements.”
Rebecca Saunders, retail adviser, entrepreneur and founder of beauty retailer Seekology, says that customers were forced to spend a significant proportion of their money online while “non-essential” retail was closed.
“We’re now seeing a bifurcation of behaviour, with some remaining cautious - often despite their fully vaccinated status - and with many people having fundamentally changed their shopping habits for the medium term, at least.”
With the traditional consumer encountering significant changes to the way they spend both their time and money, there’s definite room for a renewed focus on customer experience (CX).
“The impact of social distancing has accelerated trends in digital transformation that are here to stay and brands are having to rethink the role of customer experience,” says Angelica Cabellos, VP EMEA Solution Consulting at Sprinklr, which provides unified CX management software. “This is a time for retailers to reinvent both in-store and virtual experiences.”
Part of that reinvention is an acknowledgement of the emerging post-Covid customer profiles - and how retailers engage with them is critical. Here’s what you need to know.
The impulsive consumer
These customers are working from home indefinitely. Because they no longer splash out on oatmilk flat whites on the way to the office, they tell themselves it’s fine to spend a small fortune on a snap purchase. Again.
This “YOLO” mindset means they’re prone to spending with little care for consequence. They can therefore be quickly converted - and just as quickly repelled.
“Impulsive shoppers are even more likely to spend if there is some form of flash promotion or an incentive, such as free shipping,” says Sophie Biggerstaff, founder of retail consultancy BYRCOLLECTIVE.
In offline settings, it can pay to give customers the option to skip queues and pay with QR codes or use a self-service checkout.
“If they have to queue, they’re more likely to put down their purchase,” she adds.
It’s crucial to design an experience that matches the intentions of your customer, be it an unplanned transaction or a carefully considered purchase. Data is critical, says Lambert Walsh, SVP of customer success at Docusign. Companies can learn important lessons by analysing the activity they target at customers.
“Given the myriad ways now available to gather and measure data, it’s easier than ever to show which efforts are delivering a return and should lead to further investment,” he notes.
The on-the-edge shopper
They’re haunted by memories of juggling home-schooling with caring for shielding parents. They live in mild fear of being “pinged” before next week’s board presentation. They want to be reassured by retailers - comforted, even - and are seeking CX that can offer, even for the briefest of moments, an element of escapism.
Meeting these needs demands empathy and consideration for what the customer wants. “We all know what a good experience versus a bad experience feels like,” says Walsh. ”My team and I always consider how we would feel having that experience. Customers want us to deliver a depth of understanding - to understand their risk dimensions and solve some specific problem in their environment.”
Such an approach could reap dividends that extend long past the end of lockdowns, as illustrated by the experience of athletic apparel retailer, lululemon.
“The pandemic has led to a significant shift in the way our customers shop,” says Michael Manotas-McCafferty, lululemon’s senior director, digital. “Despite ongoing Covid restrictions, which naturally impacted our bricks-and-mortar business, lululemon responded well, with our customers shifting to online – many shopping with us for the first time.”
As part of this online flex, the brand launched a virtual shopping service, allowing budding customers to speak directly with the team and helping to push them towards that transactional end-goal. The service has proven so popular that it has stayed online post-lockdown, helping to contribute towards the company’s first quarter results, which saw digital net revenue leap by 55% to $545m.
Evolving your digital platform can help ensure that a customer always feels recognised and understood. Retailers should use AI to understand the intent of their customers’ messages, says Cabellos, automatically routing inbound comments across digital channels to the right agent based on topic and urgency.
“Time is increasingly valuable for a retailer’s customers and employers, so automating manual processes is vital for optimising CX, whilst also giving employees more time to focus on personalising critical customer engagements.”
They know businesses across the globe have been hit hard by Covid-19 restrictions and aren’t afraid to pick holes in your brand’s service for their own potential gain. They’ll query everything from VAT to the time your social team takes to respond to messages. They look at your final pricing as a starting point for negotiation. So how can you ensure the chancer has no ground to stand on when critiquing your business?
It’s unrealistic to expect a flawless customer journey in every transaction. However, ensuring your core operational pillars are targeted towards excellence can help.
“If a retailer can unify their customer-facing functions - including marketing, advertising and customer service - they’ll be in a better position to tackle any complaint,” advises Cabellos. “A customer’s experience is incredibly important today… People are increasingly paying attention to how retailers treat customers, and publicly talking about their experiences more than ever before on digital channels.”
When it comes to the chancer, it’s important that retailers ask whether they actually want to court this demographic, as it’s unlikely to be profitable, warns Pilkington.
“Chancers are unlikely to be very brand-loyal and will default to the lowest-cost competitor. Businesses are usually better off identifying and focusing on loyal customers who love the brand and are not going to be tempted away. Many businesses unfortunately lack the data to identify these core customers, so collecting and unifying consumer data has to be a key priority.”
The cautious spender
Once bitten, twice shy. Whether they’ve experienced redundancy or have been left feeling anxious by the uncertainty of the last 18 months, the cautious spender might need coaxing into action when committing to spend. They’re likely to add items to their virtual basket without making it through to the checkout and are prone to linger on webpages.
“The best way to convince cautious customers is to provide a great quality product or service at an attractive but stable price,” says Pilkington.
There are always ways for retailers to “gain wallet-share from spenders who may currently be feeling cautious”, says Saunders. “This could be helping them understand value-for-money when buying certain products, for example, or appealing to other characteristics, such as sustainability.”
Illustrating your credentials is another way to instil confidence, says Manotas-McCafferty. His company wants to maximise customer confidence in their purchases, so has updated its product pages to emphasise the “Why We Made This” and “Reviews” sections, he says.
“This gives more insight into the construction and technical elements of our products, whilst reading what other purchasers think.”
A clear-cut returns policy can also help, suggests Biggerstaff. Cautious shoppers need reassurance, which can be offered through a good returns policy, she notes.
“Having a short or difficult policy will almost certainly put them off. Knowing they can return or cancel something within 30 days eliminates any major risk and makes them feel more confident.”