Retail Customer Journey is Changing. How do you Adapt?

Retail Customer Journey

What is a Customer Journey?

If you find that there is no bread, you go out to the nearby store and get it. Here the retail customer journey is simple. The customer felt a need, knew where to go to meet it, and went and got it.

Not all customer journeys are that simple, particularly for non-essentials. Consider a smartphone. 

  • First, the customer must become aware of the product and the unique value it delivers. 
  • Next, the customer will usually consider the pros and cons of owning a smartphone. What benefit can it deliver? 
  • Then comes the stage of evaluating different offers; there are so many models and brands to choose from and some serious comparison of different offers is definitely in order. 
  • Now the customer makes a purchase, probably motivated by a great unmissable offer from one supplier.
  • Finally, the customer gets certain experiences while using the product and getting after-sales support (probably to use it to full potential). These experiences can make the person a strong advocate for the product or service, or an unhappy customer who can spread bad words. 

You can see five distinct phases in this case: Awareness, Consideration, Evaluation, Purchase, and After-sales Experience. The journey through these phases is what we call the customer journey.

The customer journey outlined above is not a simple linear journey. A research study by McKinsey revealed that it is much more complex. For example:

  • The prospect might become aware of new offers during the evaluation stage instead of starting with a complete list of available offers
  • Once a customer has a good experience with a particular offer, subsequent purchases could skip the consideration and evaluation phase and go straight to the purchase phase

A seller who understands the customer journey will be in a position to design the right kind of experience at each stage.

For example, if the seller determines that their target customers are not yet aware of their offer and its value, the focus will be on creating such awareness. The seller would also be able to provide the right kind of after-sales support to generate customer loyalty.

Reaching the Customer

When you plan a publicity campaign, you have to decide how you will reach your prospective customers. This involves getting a clear idea of the media to which your prospects are exposed to. In the case of local retail customers, the medium could include:

  • The display window of your store located at a place with high foot traffic
  • Flyers delivered to local residents’ homes describing a special offer
  • An ad in the local newspaper
  • A website supported by Local SEO and locally targeted PPC campaigns
  • Google My Business site and Google Shopping ads

If you are an online retailer targeting the whole country, you will probably use:

  • A website with online purchase facilities that are supported by extensive SEO, PPC, and social media campaigns
  • Brand-building display ads and content marketing to establish yourself among competitors

It is these differing media that we refer to as “channels.”

Considering the complex customer journey these days, where prospects switch between online and offline channels (store visits and product review sites, for example), a multichannel approach has become critical.

A multi-channel approach can put you in front of the prospect at different stages of the person’s journey – initial awareness, evaluation phase and purchase decision stage.

Persuading the Customer

Simply reaching the customer is not enough. You also have to create a desire to buy what you sell and buy it from you.

Creating a desire to buy a product or service involves making the customer feel that it delivers a benefit that meets an important need of the customer. The need could be health, wealth, or status, for example.

Creating a desire to buy from you rather than from other sellers involves differentiating your offer from others. This differentiation must be something that is relevant for the customer, such as meeting the person’s expectations better or making the purchase easier.

The Changing Customer Journey

Now that we have an overview of the basics, let us look at what is changing to the retail customer’s journey and how the basics have to adapt in response.

Studies point to one major change. Earlier, people were purchasing things with minimal touchpoints, i.e. moments when consumers are open to influence.

For example, in 2000, more than 80% of prospects needed just two store visits to make a purchase. In 2015, people buying with just two touch points came down to 25%.

On average, five touchpoints are involved before purchase these days.

The touch points involve research, online and offline, comparing product features, availability, and prices. Better connectivity and the availability of information across multiple devices have enhanced this trend.

What it means is that today’s customers are far better informed about the choices available to them.

So how can retailers respond?

Responding to Changed Customer Journeys

The response can be classified into two broad categories:

  • Use omnichannel campaigns based on an understanding of the customer journey to put the right message in front of the customer at each stage of the journey 
  • Improve  the customer experience so that the customer tends to return and buy more from the same brand

Let us now look at how these strategies can be implemented in practice:

Adapting Channel and Messaging to Stage of Journey

  • Understand the customer and what the person is looking for. Use analytics to do this by looking at the online behaviour of the prospect such as location, device, search intent, and more. All these information would be available online. What you need is a skilled analyst who can make sense of the large and varied data available
  • Tailor the message to the context so that you deliver personalized and relevant communications to the prospect depending on what the person is trying to do. For example, if the person is doing research into what is available, deliver a message that communicates the value of what you sell. On the other hand, if the person is looking for a deal, the message should be about your special offer. To do this effectively, you will need to identify customer intent
  • Tap the power of the smartphone to identify user’s location and to display your ad when the person is nearby. The ad can include a map, phone number, directions to the store and any special offers valid only for the day (or even time). When the person is in the store, further help can be provided through a product finder app to guide the person to the aisle and shelf where a product in the  person’s shopping list is displayed
  • Tap the power of online reviews displaying positive reviews for your product or service, and counteracting negative reviews by publicly interacting with the customers involved and attending to the issues raised
  • Use interactive videos, 360 views, and other technologies to provide the user with an experience that can replace actual seeing and touching inside a store

Enhancing the Customer Experience

  • Augmented Reality (AR) can help prospective customers experience products first hand before purchasing it. For example, IKEA has an app that allows users to place a piece of furniture “virtually” in their living room (or elsewhere) to see how it will look and whether it will fit into the space available
  • Same day delivery after ordering something online is a focus area of Amazon and others now. The “same day” can be shortened to a few hours where possible. Smaller retailers can partner with logistics players to make this possible
  • In-store kiosks that provide helpful information such as availability of a product and its location in the store can enhance the customer experience. Kiosks can also offer products that are available elsewhere and enable placing an order for door delivery. This can help the retailer avoid losing business for items not currently in stock locally
  • Stores are even using facial recognition technology to identify customers walking into the store and provide salespersons with their past purchase history. This enables salespersons to provide a more personalized and meaningful experience to the customer
  • Stocking products that appeal to local market is a tactic retail chains can use. Shoe stores can stock footwear that is appropriate for local terrain and current weather for example
  • Experiential marketing is gaining ground as millennials prefer experience over simple products. Nike for example has set up a store where customers can personalize the style of the shoes such as it color and the Nike swoosh

Another trend gaining ground is to go for “popup” stores instead of traditional big-box stores. Popup stores are short term temporary stores put up at places with large foot traffic. It enables testing the market, and also tailor offers to the season, such as Halloween.

Responding to Changing Retail Customer Journey: Summary

Even as late as a decade ago, retail customers were quicker to purchase. For example, most of them tended to buy with just two store visits. Things have changed dramatically since then. These days, an average customer will have been exposed to five such “touch points” before making a final purchase.

In this post, we looked at different ways retailers can respond to the changed scenario. The response included getting insights into the customer journey and tailoring the experience at touch points to the stage of the journey. It also included improving the customer experience so that the customer becomes loyal to the brand.

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