Today’s customers set tomorrow’s trends. Are retailers listening?
Every day we’re bombarded with messages about the future. Will AI make us obsolete? Is the high street dead?
With new possibilities for personalisation, advancements in AI, and an ever-expanding metaverse to play with, retailers can often become consumed with determining which trends will take off.
But while future gazing has its merits, customer data and insights sit at the heart of all future developments. Or at least they should. Not taking time to understand your customers could make placing a bet on which trends will come to fruition a doomed lottery. So why do retailers chase trends rather than data?
“Many retailers are desperate to find applications for trendy technologies often through fear of missing out,” says Rachel Smith, experience director at ecommerce consultancy Wunderman Thompson Commerce & Technology. “But it’s not always clear what problems these technologies solve for customers and how best to apply them,” she continues.
Companies could waste millions and lose customers by following trends without first asking two very important questions: what do my customers want now, and how will this impact the future?
Smith believes that building up crucial customer insights now is the best route to identifying the most pertinent trends for the future. Brands and retailers don’t just need to understand what is possible using AI or the metaverse but need to ask themselves whether these trends are truly in step with consumer demand today and tomorrow.
Although this might seem like the sensible approach, according to research from Wunderman Thompson, most buyers (52%) don’t believe retailers understand the customer journey. And the ramifications can be huge, with 58% saying they wouldn’t shop online with a retailer that failed to meet their expectations.
Bringing customers’ cross-channel experiences to life can be perceived as a challenge. But Smith argues that one of the simplest and most effective tools for illustrating what customers endure is a customer journey or experience map.
This map provides a visual representation of the customer’s end-to-end experience over time and draws together quantitative and qualitative insights. “They’re great for identifying frictions and opportunities and aligning organisations around a common goal, especially when the responsibilities span multiple functions in siloed organisations,” she explains.
While web metrics like cost per click and average order value (AOV) remain valid, taking a broader look at customer experience can deliver even deeper insights. “We need a complete shift away from understanding sales from a siloed business perspective to understanding the entire customer journey from the consumer’s perspective and how this can and will affect business performance,” says Smith.
Regular qualitative research can be a critical competitive differentiator. “These insights can help you understand customer missions, mindsets, and the ‘why’ behind certain behaviours, like why people drop out of the process at a particular point, what elements of the product description worked and didn’t work, or why they favour your competitor,” she explains.
Investing time and effort in understanding this is money well spent. And most importantly, organisations that implement change based on these insights often see an increase in key growth metrics of conversion, AOV, revenue and retention.
But it shouldn’t be a one-and-done. “If your customer research was done pre-Covid, it’s of limited value because the world has changed so much,” says Smith. “Even if it was done six months ago, it won’t reflect the changes we’re seeing because of the cost-of-living crisis.” This means that your future gazing could be built on insights that are no longer relevant.
A retail reality check is in order. Before implementing AI, building stores in the metaverse, or even creating a space-commerce strategy, businesses should ask their customers what they actually want and need.
Smith concludes: “None of us can say for certain which future trends will become the new normal in retail and ecommerce,” she says. “But if you understand your customers, you’re better prepared and have probably already started planning for whatever may come next.”
For more information, visit wtcom.co/wtc-cx