Customer expectations are rising – and so are their complaints. Retailers must strengthen and understand their own proposition before meeting consumer demands
A chasm has emerged between customer expectations and the retail experience. While consumers tolerated slower delivery times and other service issues at the height of the pandemic, their patience is waning. Retailers must adapt – and fast.
As customer desires evolve and loyalties shift, omnichannel retailers are missing the mark on even the most fundamental elements, such as returns and payment options. Many simply don’t understand what consumers expect. In the UK, complaints about poor service in the six months to July 2021 were at their highest level since 2009.
Clare Bailey is founder of the Retail Champion consultancy. She notes that initial customer expectations are built by retailers. “When a brand puts their positioning out there, they’re selling a vision of what it would be like to be their consumer,” Bailey says. “Customer experience means living up to that.”
Customer experience is often conflated with events and activations, but it’s much broader, covering everything from the in-store returns process to a website’s live chat function. The smaller building blocks of the wider consumer experience are crucial touchpoints and should be placed at the heart of any retail strategy.
The problems begin when retailers don’t understand themselves and so fail to articulate a concrete offering. If you’re unsure whether your brand offers value, luxury, or convenience, your customer can’t build expectations around your positioning within the market.
For example, IKEA gives a great customer experience “because they do what they say they will do well”, says Bailey. “You know you’re not going to get luxury service but that’s ok because you’re getting quality and value for money.”
The Edelman Trust Barometer 2021 revealed that trust is now ‘critical’ or ‘important’ for 88% of consumers across 14 markets when deciding which brands to buy or use. For 68% it’s more important to be able to trust a brand than it was in the past. With trust now a key consumer driver, it’s vital that retailers first hone a clear brand proposition which they can then deliver consistently.
A human connection
Only once a retailer thoroughly understands its own proposition can it begin to understand its audience. However, it’s no longer simply about segmenting by age or disposable income.
For Kate Nightingale, founder of the consultancy Style Psychology, self-congruence theory is the key to identifying and understanding the consumer. This suggests that consumers respond more positively to brands whose values align with their own. “It’s basically a personality match between the customer and the brand,” says Nightingale, “but I haven’t seen personality identification of that type in almost any customer profiles.”
Research by Klarna revealed that 40% of consumers seek out brand values they can align with, while 35% seek human engagement. However, a third of omnichannel retailers are held back by outdated tech, which could be a vital tool for delivering the personal, values-driven experience sought by today’s consumers.
“As tech-enabled interactions become increasingly personalised, localised and mission-led, more meaningful customer relationships can be forged,” says Amy Lee, senior trends and insights manager for apparel at Avery Dennison, a materials science company which designs and manufactures functional materials and labelling such as RFID tags. However, for this strategy to work, retailers must be consistent across all platforms.
A single voice
Avery Dennison’s recent Digital Consumer Behaviour report found that shoppers across China, the US and Europe gravitate heavily towards a mixed retail experience between physical and online. Breaking these channels into separate silos hurts the customer experience. For example, it can be jarring to go from a frictionless online payment to queuing for checkouts. Nightingale suggests enlisting a ‘brand guardian’ to ensure a singular brand voice permeates all channels.
Personal care and beauty product specialist Sephora has successfully pursued such an approach. In 2017, it merged its digital and retail teams to create a unified experience, bringing them together under one roof with customer service. If a customer receives a makeover, the brand’s beauty advisors scan the items used, which are then added to the customer’s app. The app can then alert customers when wishlist products are in stock at a nearby store.
MATCHESFASHION topped the 2020 Hitting the Mark report from online marketing company Dotdigital. The fashion retailer maintains a high level, luxury service across all platforms, personalising email recommendations, allowing staff to use purchase history to tailor personal shopping experiences, and providing 24-hour digital access to the personal shopping team. Such strategies help retailers to “embrace the blur”, mixing service with experiential and personal factors, says Steve Dennis, author of Remarkable Retail.
There’s no quick fix for understanding the consumer. Success lies in the fundamentals. While personalisation and technology are parts of the puzzle, a company must first go back to basics, ensuring it understands itself and its offering.
Customer contribution: the benefits of co-creation
Co-creation is now a central strategy for brands looking to engage their audience on a new level, inviting the consumer into the design process.
While some brands take to Instagram, Slack and WhatsApp to elicit consumer feedback on initial concepts and samples, others – like South Korean beauty start-up Woohwaman and toy giant Lego – invite customers to submit original ideas via dedicated online platforms.
Of 554 senior executives surveyed across Europe for a recent Hitachi Social Innovation report, 51% said co-creation improved financial performance. But is it anything new or simply market research rebranded?
Sophie Slater is co-founder and CEO of ethical fashion brand Birdsong. She thinks the public facing nature of co-creation is key. “Our customers feel closer to the brand, it builds excitement and most importantly, it ensures we’re making things people love and want. It’s a waste issue to create stock that no one wants to buy,” she says.
If someone’s contributions are embodied in a co-created product, they’re likely to be especially keen to buy it. Having given their time and creativity, co-creators are rewarded tangibly either by a product that encapsulates their preferences or, in some cases, a percentage of sales revenue. An element of ownership is at play. That’s the essential difference: while market research takes, co-creation gives back.