Optimizing the retail customer experience

Retail experience is a crucial differentiator for businesses. While price, value and service remain important, it’s the overall – and sometimes elusive – customer experience that turns a casual browser into a committed brand advocate.

The XM Institute found that happy customers are:

• more than 5x as likely to repurchase
• 6x as likely to forgive
• 8x as likely to try other products/services
• 3x as likely to spread positive word of mouth

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Retail experience definition

Before we go further, let’s unpack what we mean by retail experience.

Retail experience definition: the overall emotional and cognitive result of the interactions provided by a business across all its retail touchpoints, as viewed through the customer’s eyes.

To make that easier to imagine, we’ll use an example of a customer purchasing online groceries. Beginning on the supermarket’s website or downloadable app, a customer browses products and fills their shopping cart. They make an online purchase through your online card payment system and selects their delivery slot. On their chosen day, your delivery service arrives to deliver the goods. The customer notices something is missing, so contacts you through their app, online, or via telephone to resolve the issue. Your retail business responds over live chat, apologizing and providing some form of discount or points reward.

This everyday retail customer experience contains all kinds of touchpoints, digital and in-person, that can make or break a retail experience. At each customer journey touchpoint, negative or positive emotions could be sparked by how your business performs, meaning your customer experience journey has to be planned and executed with care.

The retail experience is the sum total of all of the touchpoints within this single customer’s purchase – multiplied by as many retail customers as you have, and as many purchases, inquiries, or website visits they make with you. Thousands of small customer experiences feed into a single, overall impression. Success across all this customer engagement requires almost every part of your retail business to be right.

Why is retail customer experience so important?

Retail businesses frequently battle to be recognized among many others like them. To stand out, brands need to do more than just offer the cheapest products or the widest range. The potential to save money and browse a good choice of products might initially attract customers, but with an ever-increasing number of competitors, experience can be the deciding factor between your brand and another.

When you differentiate on customer experience, you’re not just setting yourself apart from the competition on pragmatic elements such as price or convenience. You’re building and strengthening a relationship with the customer that’s built on positive emotion. Customers naturally gravitate towards businesses that make them feel good and meet their expectations.

Research shows that a good customer experience can even win out over lower prices from your competitors. Bain & Co found that 86% of consumers are willing to pay more for a better customer experience. Research from Capgemini turned up similar results, finding that 8 in 10 customers would increase their spend with a company in return for better experiences.

Capgemini also revealed a discrepancy in how well big businesses are doing at CX, compared with how their customers rate them. They report that while three-quarters (75%) of organizations believe themselves to be customer-centric, only 30% of consumers agree.

So while more and more companies are waking up to the possibilities of experience-based retail, there’s a lot more work to do to make that potential a reality.

Improving in-store retail experience

In-store shopping is retail in its oldest form, but it’s undergone dramatic changes, particularly in response to the pandemic. Where once we treated in-store browsing as a form of leisure activity, post-pandemic customers may prefer a more focused experience with the ability to find what they need, pay, and exit the store in the shortest possible time.

In-store experiences today are typically interwoven with digital ones, with customers using smartphones and tablets – both their own and those provided by the retailer – to check prices and reviews before they make a purchase. Checking stock and reserving goods may happen more frequently via app in future, and customers may use digital tools to navigate to their nearest store, check opening hours and safety precautions in advance of a visit

Ensuring that offline safety policies are highlighted in digital form can help customers feel that they are valued and that their safety is paramount. Offering new methods of payment – such as contactless– and highlighting hygiene processes in-store is a way to ensure customer experience feels secure.

Safety protocols might require stores to reopen with new layouts, or that only certain locations are opened to ensure that customer experience is rated highly. Spreading effort across multiple locations might dilute that experience, and with happy customers three times as likely to recommend, planning ahead for CX is vital for success.

In this way, in-store retail is almost always part of an omnichannel experience, and should be treated as such when you design your CX strategy. Rather than treating in-store as a stand-alone customer journey, it may be helpful to view it as one of many possible omnichannel journeys that include both digital and physical touchpoints.

Improving digital retail experience

Shopping online, shopping on a smartphone – it’s easy to forget how recently these behaviors became the norm, so completely have they taken over as our default way to shop.

Optimizing your website and app can play a major role in creating great and easily scalable retail customer experiences. Online sales grew dramatically in the last 18 months, meaning your digital strategy is vital for sourcing and retaining customers. Re-allocating funding from offline outreach – such as media buy-ins and offline PR – to online marketing efforts and paid search can be the quickest way to draw people to your brand.

Of course, once you’ve found your customers, you need to provide them with what they’re looking for. Following user experience, best practice will help make sure users can find what they need when they need it, and navigate through their customer journey towards a successful purchase without encountering pain points. Ensuring loading speeds are high, payment options are simple, and optimizing product pages for online purchases are simple ways in which to make the online experience more seamless.

Ensuring that you are using customer experience as your guide when creating digital presences will help you to provide a retail experience that matches your outreach. Much as in-store experiences may now require a digital aspect to them for convenience, a digital retail experience should reflect how an in-store customer experience feels. Offering chat functions to sales staff, videoconferencing options for purchase advice, and other personalized touchpoints can help the digital experience feel more inviting.

Digital retail environments are also fertile ground for collecting customer experience data. As well as asking for qualitative feedback using site intercepts, surveys, and contextual feedback buttons and ratings, you can record operational data such as bounce rates, drop-off, and cart abandonment, most frequently visited pages, and conversion rates.

Combining these with your customer experience data within a centralized platform can help you build a rich and detailed picture of the “what” and the “why” of your digital retail experience. You can use this data not only to constantly and consistently improve customer experiences in the present but to make predictions that will help guide your decisions in the future.

How to improve the retail customer experience: strategies & tactics

Plan, evaluate, and then act

It can be tempting to get straight to work improving experiences, but smart retail strategists wait until they have the full picture. The first step in your retail experience improvement journey is to plan CX infrastructure for gathering data on the retail user experience, and then evaluate it for insights into improving shopping experiences.

Developing priority touchpoints to learn more about customer experience and piloting them can help you determine your visitors’ intent, how effective their omnichannel experience has been and their likelihood to recommend and return, as well as much more. You can then extrapolate this information to resolve issues such as online purchase abandonment and plan further touchpoint evaluation.

Evaluate retail experience at the most effective touchpoints

Retail customer experience is cumulative – it is formed over many interactions. When one of these interactions is unsatisfactory or goes in a different direction to the one that’s expected,  it can negatively affect the overall customer experience.

That’s why you should be collecting experience data at as many touchpoints as is effective. You can use digital tools like rating scales, intercepts, thumbs up / thumbs down buttons, and comment boxes to get information from customers in a way that’s low-effort and non-intrusive, but also worthwhile. Personalization and optimization become easier when real-life customer experience is taken into account.

You can use these concepts in brick-and-mortar stores too, via tablets and touchscreens, suggestion boxes, and through interactions with your staff. However, these should be trialed and only deployed when most likely to be effective, as customers are now likely to prefer a swift shopping experience.

Improve the employee experience

Improving employee experience can have a positive effect on customer experience since the two are closely linked. Engaged employees create better experiences for customers because they’re more innovative, more present, and ultimately, more personally committed to company values.

This approach can be used both in physical stores and online. By creating meaningful connections between staff and customers, retail experiences become more personalized and more memorable, leading to better recommendations.

Focus on overall satisfaction

To drive experience improvement in retail, NPS is not the right metric. NPS is easy enough to report, and many location-based businesses such as retail use it.  But if the focus is not brand health tracking (where NPS is relevant) but rather location improvement, overall satisfaction is a much stronger metric.  It is crucial that the metrics and reporting are relevant to the location manager’s span of control:  they should be held responsible for performance on elements they can control.  This focus encourages manager engagement and helps to drive improved performance.

Invest in customer service and omnichannel touchpoints

Customer service and customer experience are two sides of the same coin. Customer service plays an important role in upholding a great customer experience, which is why it makes sense to invest in the people and processes that customers encounter when they reach out to you with a question or concern. Make sure that employees are empowered to resolve problems and build trust with customers in a way that’s authentic to them.

Give employees the training and support to handle customer queries with confidence. Providing a ticketing system that helps employees keep track of customer information will improve the experience for both customers and employees, and help you deliver the best customer service experience.

Offering omnichannel solutions can also be effective in providing a higher quality retail experience – not everyone would like to use a webchat, telephone option, or in-person conversation to resolve a problem.

Close the loop with detractors

We often stress the importance of closing the loop with customers. That’s because it can be absolutely transformational for the customer experience. When you close the loop, you treat a customer’s feedback as the start of a dialogue, not as a piece of static data. By reaching out to customers who’ve had a poor experience, finding out what went wrong, and taking ownership of finding them a solution, you can deliver an experience that’s so positive it actually cancels out the negative effect of the original issue.

Leverage your loyalty program

Got a customer loyalty program? You may already have in your possession the foundation stone of a first-class customer experience program. Customer loyalty programs contain a self-selecting sample of your most loyal customers, along with demographic information and purchase history that helps you understand who they are, what they need, and what they most care about. You can use your loyalty program members as a survey panel to collect initial research for your retail CX program and use that data to tailor later customer experiences.

Use a single integrated CX management platform

As we’ve described, retail customer experience is holistic. It’s the result of many thousands of interactions, made by many customers across many journeys. It also touches multiple facets of your business, from customer service people to logistics and delivery, in-store employees to web designers, social media managers to the person who unlocks the store in the morning.

For all these reasons, it’s crucial to have a customer experience management platform that’s capable of collecting, analyzing and acting on data from across every part of your business, and making the right information available to the right people at the right time. Having one platform enables you to link data points to one another more easily, and spot trends more rapidly than when the data is disparate.

Learn about Qualtrics^® XM for Customer Experience^TM

Retail customer experience examples

Here’s how some leading retail businesses have used retail experience data and insights to improve their results.

• Delivery Hero, a platform that connects delivery restaurants with home-delivery customers, achieved a 30% improvement in transactional NPS scores from its end-users by improving the retail experience. Delivery Hero’s team created customer journey maps and used listening at each customer experience touchpoint to find out where the pain points were. They also used Qualtrics analytics tools to dive deeper into the emotions and experiences driving different NPS ratings.
• Clothing retailer LL Bean improved the retail experience through better knowledge of its customers. Focusing on its strategically most important customer segments, the brand researched what mattered most to this group, using listening and analysis tools to provide offers, content and messaging that reflected the customers’ personalities, lifestyles and preferences. As a result, they saw a threefold increase in Customer Lifetime Value and better retail experience.
• Spanish supermarket chain DIA successfully moved from a price-differentiated business model with a stripped-back retail experience to a more customer-centric approach. Using its loyalty card data as a starting point, DIA’s team began building a picture of its customer base using experience data, in order to create experiences that resonated with customers. The brand helped promote better retail experiences by rewarding employees who delivered great customer experiences, linking in-store NPS to employee rewards. The brand saw a 50% improvement in NPS score within just 6 months of making the changes.