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The ‘ruse’ of customer experience-based retailing

2/20/2019
Retail is hard. Plain and simple, it’s a really tough business. It’s really easy for analysts and trade media to use retailers as punching bags by talking about all the things the industry is NOT doing to meet customer expectations, drive better margins or expand their channel strategy.

The fact is, there are a lot of really great things happening in the industry and it’s an exciting time to be a retailer. A tough time yes, but an exciting one nonetheless. The chatter has been consistent for the last 18 months – create an experience for your customers or risk losing your business to more nimble, innovative players.

The question is; what does customer experience really mean for the industry? The answer, of course, is that “it depends.” As retailers grapple with their strategies for creating great customer experiences, here are a few things to think about:

#1. The race to meet all customer expectations is unwinnable.
Whether your target is GenZ or GenX, Millennials or Boomers, customers are highly complex and are reacting and adapting to new brands and new channels more quickly than retailers can keep up. Our retail environment, including technology, expanded shopping channels and the onset of new competition, has shaped consumer behaviors into dominant tendencies or imperatives. Incisiv has framed these into eight imperatives, of which consumers can fall into any range from one of them to all eight.

What’s important to consider, however, is that no retailer can execute on a strategy that will effectively cover all eight imperatives. Retailers must clearly understand the two or three that are most critical to their target shoppers and craft a strategy to hit a home run of delivering on those imperatives. For example, an urban, lifestyle retailer would focus on efficiency for their time-starved customers, transparency for their shoppers’ desire to understand the materials and makeup of their goods, and perhaps belonging as they are community oriented.

The point is that trying to meet all of your customers’ expectations is not possible. The goal should be to focus on thoroughly delivering on the two or three that will deliver best on your brand promise.

#2. Which store is the right store
The retail apocalypse has been debunked. The importance of the store has been re-cemented into the psyche of the industry. In fact, there is a ton of innovation happening in the store environment, and any attempt to evolve the experience should be applauded. Incisiv has identified five store formats that are each in their own way driving a new store landscape in the market. From “showrooms and service hubs” to “self-driven experiences,” from “marketplaces and platforms” to “shared experiences,” start-up and legacy retailers are getting into the game. However, the rules of the game are not always clear and this is where customer experience gets a little fuzzy.

Today’s consumers define experience based on the task they are trying to complete. Obviously, a consumer is not going to want a “Museum of Ice Cream” experience when buying bathroom staples. A great experience for a consumer trying to pick a few things for the bathroom is defined by a fast and efficient trip, rather than an interactive journey into the benefits of aloe soap.

Just like focusing on two to three key shopper imperatives that are most important, retailers should experiment with (and ideally execute on) store formats that are natural extensions of their brand.

#3. Culture for the win
There is a ton of change flying in the face of every retailer. To be on the front lines and experiencing this speed of change is daunting, to say the least. However, in study after study, “unwillingness to change” ranks as the top reason for lack of a great experience.

To focus on the customer experience, retail executives need to look at the experience that is being lived inside the organization and address that first. Is there a culture of collaboration or is it one of fiefdoms? Are metrics all built around transactions or relationships with the customers?

Of course, this is easier said than done in a large retail organization. But, quite frankly, what is the alternative?

David Weinand is the co-founder and chief customer officer of Incisiv.
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