4 steps for retailers striving to be customer-centric

It’s not easy for retailers to keep up with the pace of marketing innovation. One challenge is their inability to keep up with the changing ways people want to shop for products and connect with brands.

Consumer behavior has shifted to smaller, more customer experience-oriented retailers, with e-commerce perceived to offer better choice, convenience and price. Consumers want to feel connected to the brand and expect to receive the same experience they’ve come to know in brick-and-mortar locations. More and more, consumers want to reach out digitally. Consumers expect a customized and personal shopping experience with seamless and immediate support.

Consumers are demanding that retailers change, yet so many are still not investing in the technologies and strategies necessary to meet this demand.

Why customer-centric is an essential approach

Most retailers are still focused on merchandise, price, promotion and traditional ways of going to market. That no longer moves the needle far enough. And, marketers work at a breakneck pace – pursuing myriad opportunities to acquire new customers and keep existing ones happy – but they are missing the mark on the most fundamental ways to increase sales and enhance the customer experience.

In 2018, it is absolutely critical that all retail marketers focus on becoming customer-centric. They need to rethink their existing marketing functions, modernize their approach and turn their attention toward how do I better serve customers? In turn, this will boost the bottom line. The following four key actions set the foundation for a successful personalized customer experience.

Invest in data & analytics

Data is all around us. Most organizations have plenty of data about users, prospects and customers. The problem is having a strategy for using the data, then actually putting that data to work: using it to identify consumer behavior, opportunities for engagement and merchandising trends, and ultimately gaining actionable customer insights with the data.

Retailers don’t need expensive customer data platforms. They need to move toward creating a 360-degree view of customers by adding context, intent, insights and interactions to the basic data that they already have about their customers. In addition to demographic and lifestyle information, they need to start to collect onsite behavioral, engagement, transactional, mobile and device and other kinds of available data.

Once user data is captured, it needs to be tracked, segmented and analyzed to learn countless customer behaviors and trends. This includes offline and online shopping preferences, what products they are looking at, dwell times on products (i.e., how long they are spending on products and services) -even the motivations and intent for coming to the brand’s website or brick-and-mortar location and not making a purchase. Are users spending time on your website, but still not completing purchases? Consider adding videos that show your products in use or adding a chatbot that answers questions in real time.

Use consumer behaviors to personalize the experience

One of the biggest challenges of modern marketing is the number of channels and devices that customers now have to interact with retailers. Retailers can’t just map the customer journey – they need to track the customer to know where to improve their marketing programs and effectively invest in their resources.

Too many retailers and marketers are not embracing ways of identifying and tracking uses across those channels. This is important for managing multi-touch attribution, a key tool of modern marketing used to measure the role of each customer touch point that influences a key performance indicator or desired business outcome. This can be managed using one of the technologies that can track consumer journeys across channels and devices. These technologies include traditional tracking tools like pixel targeting, cookies, click redirects and site tags. More and more marketers are using persistent IDs or people IDs- unique, anonymous code that unifies across all devices and browsers – that link demographic, intent and interest attributes to create unique consumer profiles.

These same technologies enable marketers to personalize the customer experience for each user by connecting viewing and purchase history to their ID. In a growing competitive retail marketplace, a store’s website needs to include hyper-targeting that can greet returning visitors and customers by name and show new products that will be of interest to them, based on purchase or viewing history. When they get an email, it should include relevant content, messaging and calls to action that entice them to complete this cycle in the store or on the brand’s website.

This kind of personalization may seem daunting. It’s becoming table stakes among the most successful e-commerce and digital marketers. To compete, retailers need to use some of the highly effective tools available that can simplify these processes and automate relevant communications to customers.

Start with an emotional connection, then think promotion

Recently, marketing has gone through a fundamental rethink of how customers make decisions about purchasing brands. Ideas have been borrowed from psychology, behavioral economics and game theory and have been mixed with observations from advertising, direct, database and digital marketing.

Marketers have always noticed that consumers sometimes make irrational decisions: How much to pay for a cup of coffee, going on a diet or saving enough for retirement. Some retailers use heavy promotion as a trigger for decision making, focusing on insights, behaviors and intent as logical drivers of product interactions. Advertising likes to tell brand stories that use motivations, empathy, messaging and content to find emotional cues that nudge consumers into the best outcome for a brand.

By combining learnings from different views of user experience, marketers are finding that most purchase decisions are made emotionally and justified logically. Therefore, marketing communications that go too far one way or the other simply don’t work as well at creating a balanced customer relationship. Without a customer relationship, it hardly matters how good the short term customer experience is.

Retailers that make every effort so promotional it reminds customers of a yard sale may find their success very short-lived. Retailers that think marketing is great art, risk missing the sale altogether. A balance of product messaging whose story pulls on the emotional heartstrings to make purchase decisions, while using the calls to action and other devices that help the user justify the purchase, seems to be the best recommendation for marketing today.

Rethink the customer loyalty program

Customer loyalty programs have evolved from simply rewarding customers for making purchases to driving engagement and retention by delivering more benefits via multiple touch points.

Modern consumers expect interaction, personalization and shared values, as well as new experiences, products or services. Therefore, today’s loyalty programs should encourage engagement, reward specific milestones or behaviors, provide meaningful surprises and offer unique experiences as well as individualized incentives relevant to purchase history. Starbucks, Ulta, Caribou Coffee and Sephora have all created modern loyalty programs that incent sharing social interaction, have tiered structures, and provide personalized rewards – not one size fits all.

What hasn’t changed for retailers is the goal of a loyalty program: customer retention. To make a loyalty program successful, retailers need to learn why their customers aren’t loyal. Is it product selection, price, customer service, other more convenient options or larger, more established competitors? No matter – increasing customer lifetime value (LTV) is a vital element for every healthy business. Retail loyalty programs can increase the LTV of members by 30% or through increased visits, increased spend per visit, and customer win-back.

Amazon has proven the power of modern loyalty programs, capturing the logical side of the purchase decision with Amazon Prime. Consumers expect free shipping from online retailers, and are willing to pay $119 a year for Amazon Prime because of the many other benefits they receive, such as streaming movies, TV shows and books. Amazon also creates exclusive opportunities for these members, such as a special buying day; Prime Day is one of its best-selling days of the year. The result is that Amazon’s 100 million Prime customers spend nearly twice annually what non-Prime customers spend – an estimated $1,300 annually.

Set the foundation for long-term success

To be successful, retailers need to develop strategies and executions around data and analytics, personalizing the customer experience, balancing emotional and promotional connections and rethinking loyalty programs for the 21st century. Moving forward on these four actions in the upcoming year will make multiple areas of your marketing more efficient. This can help increase sales in the short term and customer lifetime value in the long term.


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