A new era of customer engagement for retail

Money and time have always been the biggest drivers of consumer purchasing decisions. But as buying options have evolved, consumers no longer need to trade between price, convenience and emotional experience. Innovative products, services and delivery models now cater to all three at once.

Values-based decisions drive customer choice

More than half of European consumers agree it is worth paying more for sustainable or environmentally friendly products. Most brands are responding, with dedicated sections of their websites devoted to coverage of their environmental sustainability activities, but few embed these details within the customer’s actual shopping journey. And values should extend beyond environmental issues. Retailers and brands must do more to increase the transparency of their supply chains, working practices and sustainability efforts to:

• Help customers find more environmentally friendly options when shopping. Recyclable packaging and environmentally friendly shipping are among the options European consumers actively seek. Brands must start integrating sustainability into customer journeys.
• Build consumer trust that brands will act on their environmental commitments. European consumers believe brands must drive sustainability but don’t trust them to do so. Our data shows that 69 per cent of them wish companies were more transparent about their business practices. Businesses must embrace transparency by design, to fortify stakeholder trust in their sustainability commitments.

Hybrid customer experiences are now the norm

Customer experiences are increasingly hybrid, with multiple digital and physical touchpoints feeding into customer journeys, often simultaneously. Smartphones mean consumers can connect to digital content anywhere. Thirty per cent of European online adults say they are more confident in their purchases when using a smartphone to do research while in-store. To serve your increasingly hybrid customers:

• Use emerging technology to meld physical experiences into the digital world. Technologies such as AR and VR attempt to virtually recreate experiences that would traditionally be limited to in-person interactions. Companies such as NYX Professional Makeup and jewellery manufacturer Pandora use AR-based product visualisation tools that allow customers to virtually try on products. And consumers are embracing these experiences, with 42 per cent of UK and 41 per cent of French consumers saying they have used or are interested in using these tools.
• Extend the value of store associates to digital customers. As customers are less restricted by channels, organisations must follow suit. Supporting increasingly fluid and hybrid customer experiences will require more flexibility in managing technology and human resources. From consumer electronics retailers such as Currys to beauty brands such as Kiehl’s, retailers are connecting digital customers with store associates via video-based online appointments. And consumers are embracing these new options to connect, as 33 per cent of UK and 24 per cent of French consumers have used or are interested in using a virtual shopper to shop remotely.
• Make online transactions easier. Many retailers enable digital wallet payments such as PayPal or Apple Pay in an attempt to reduce the number of clicks and effort required to check out online. But more retailers and brands are also starting to offer deferred payment options, making their products financially accessible to a broader audience. Meanwhile, even luxury brands are embracing deferred payments, and the likes of Buglari and Gucci are enabling “virtual” gift-giving and group purchases in partnership with 4GIFT.

Consumers are faced with an abundance of choice and are motivated to seek out the best buying experiences. Where an experience, product or service does not meet a customer’s expectations, there is more than likely an alternative retailer or brand that will. Retailers and brands must press ahead with their efforts to retain increasingly digitally enabled consumers.

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By Michelle Beeson, Analyst, Forrester

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