In our previous blog, we explored the diverse needs, preferences, and dream experiences of NEOs and Traditionals. If you need a refresher or haven’t read them yet, here’s where you can read the previous blog.
Essentially, our recent market study called Retail CX Insights 2024: Driving In-Store Sales shed light on the current state of in-store shopping behaviours, customer segmentation, and the factors driving satisfaction and loyalty.
The next step is to implement strategies based on these insights. Let’s dive in.
As retailers, what can you do?
Based on the insights from the report, retailers can implement several strategies to improve customer satisfaction and loyalty:
Maintain dynamic and competitive pricing
Firstly, maintaining competitive pricing is crucial, as it’s the top factor influencing purchasing decisions for both customer mindsets. Retailers should regularly monitor market prices and adjust accordingly, potentially implementing dynamic pricing strategies or loyalty programs that offer personalised discounts. Dynamic pricing strategies can also be implemented such as price-matching guarantees.
Amazon is renowned for its dynamic pricing strategy, frequently adjusting prices based on real-time data such as competitor pricing, market demand, and customer behaviour. This strategy helps Amazon stay competitive and maximise profits.
Walmart is another good example of a company that utilises a competitive pricing strategy, often price-matching and using data analytics to ensure its prices remain lower than competitors. This approach attracts price-sensitive customers and drives foot traffic
Of course, this would only be possible when a retail company has gathered enough data from its customers. For example, General Motors (GM) has implemented dynamic pricing strategies, particularly in the auto parts segment. They use data-driven methods to adjust prices in response to market conditions, optimising value and customer satisfaction.
Focus on frictionless experience
To address product availability and ease of finding items, stores should optimise their inventory management systems and redesign layouts for intuitive navigation. This could involve clear signage, logical product groupings, and technology like mobile apps with digital store maps to help customers locate products.
Retailers can start implementing various customer service improvements, including expanding self-checkout options and mobile payment solutions to reduce wait times and enhance the shopping experience
Target USA focuses on improving the in-store experience by optimising store layouts and utilising technology, such as mobile apps with digital store maps, to help customers easily locate products. The company also prioritises offering a broad range of products and efficient inventory management to ensure availability.
Close the feedback loop
Closing the feedback loop is a critical component of improving customer service quality. It involves responding to customer feedback, addressing concerns, and implementing improvements based on the insights gathered.
This process shows customers that their opinions are valued and fosters trust and loyalty. By actively closing the loop, businesses can identify and rectify issues swiftly, leading to enhanced customer satisfaction and service quality. It also allows companies to continuously learn and evolve, ensuring they stay attuned to their customers’ needs.
DHL Supply Chain, a leading provider of contract logistics and supply chain management services uses a closed-loop feedback system to improve its Net Promoter Score (NPS). The company prioritises following up with all detractors within 48 hours, ensuring that any negative feedback is addressed promptly. This rapid response ensures that any negative feedback is addressed quickly, preventing issues from festering and demonstrating to customers that their concerns are taken seriously.
DHL’s approach includes routing feedback to the appropriate teams for resolution and involving senior management when necessary to resolve critical issues promptly. The closed-loop process also ensures that all activities are tracked and audited, enhancing the transparency and accountability of the feedback management system.
Additionally, the closed-loop feedback system has helped DHL double its customer response rate. This high level of engagement is partly due to the company’s commitment to addressing issues raised by customers and following up to ensure their satisfaction. By systematically closing the feedback loop, DHL not only resolves issues but also builds stronger relationships with their customers, which in turn fosters loyalty and promotes positive word-of-mouth.
Retail store Zappos is also well-known for its exceptional customer service and has implemented a robust closed-loop feedback system. The company empowers its employees to resolve customer issues on the spot, which helps address problems quickly and personally.
For instance, Zappos employees have the autonomy to surprise customers with overnight shipping upgrades or even going as far as delivering pizzas during calls. Zappos actively seeks feedback and uses it to make continuous improvements, showcasing their commitment to exceeding customer expectations.
Zappos actively solicits customer feedback and uses it to drive continuous improvements, fostering a customer-centric culture throughout the organization. This approach ensures that every interaction is an opportunity to strengthen customer loyalty and satisfaction, making Zappos a leader in delivering outstanding customer service.
Build strong brand reputation
For NEOs who value brand reputation, retailers should focus on building a strong, positive brand image through consistent messaging, quality products, and socially responsible practices.
Clothing brand Patagonia has built a strong brand reputation through its commitment to ethical practices and environmental activism. The company actively engages with local communities through initiatives like beach cleanups and environmental campaigns, aligning with socially responsible practices.
Patagonia’s “Don’t buy this jacket” campaign alone had a significant positive impact on sales. The company’s revenue increased by 30% the following year, reaching $543 million. This growth demonstrated the power of aligning marketing efforts with strong ethical values and a clear mission.
To tackle the universal frustration of long checkout lines, implementing more efficient point-of-sale systems, self-checkout options, or mobile payment solutions could significantly improve the experience.
Expanding product ranges, particularly for Traditionals, and ensuring sufficient parking for NEOs are also important considerations. By addressing these key areas, retailers can create a more satisfying shopping experience that caters to the diverse needs of their customer base, potentially increasing loyalty and reducing the likelihood of customers switching to competitors.
Also check out: Retail CX Insights: Understanding Consumer Mindsets in 2024 (Part 1)
In a nutshell
The strategies we’ve outlined – from dynamic pricing to frictionless experiences, from closing feedback loops to building strong brand reputations – provide a roadmap for retailers to enhance their customer experience. By implementing these approaches, businesses can create an environment that appeals to the price-sensitive Traditionals while also satisfying the experience-driven NEOs.
As we move forward, the lines between online and offline retail will continue to blur. Successful retailers will be those who can seamlessly integrate both worlds, providing a cohesive omnichannel experience that meets the diverse needs of all customer segments.
This blog is part of a 3-part series.
