Customer Experience - The Great Differentiator

Can you recall the last time you had a great shopping experience? Do you remember the feeling of excitement when you discovered a new product? The feeling of appreciation when an associate helped you find an item you were searching for. The joy of believing that a business values your loyalty and rewards you every time you shop. The comfort of knowing that a brand you trust, is reliable and making your life easier.

Experiences define the shopping journey and retailers leverage it as a point of differentiation to acquire and build a loyal customer base. Retailers who get customer experience right, consider how customers engage with them at every point of the journey - from discovery, consideration, purchase and loyalty. Retailers like SEPHORA have gotten this right and their focus on experience leads to faster conversion and more future purchases. This McKinsey & Company article highlighted that in 2018, Sephora loyalty members accounted for 80% of total transactions.  This is a clear example of how loyalty leads to profit.

For many companies, “customer experience” is highlighted as a core value and several have formalized this commitment by joining the growing trend of organizations who have hired a Chief Customer or Chief Experience Officer (CXO). The fascination and focus on customer experience is intense, but many would argue that it is justified. In this study by Peter Kriss for Harvard Business Review, research suggests that customers who had the best past experiences spend 140% more compared to those who had the poorest past experiences”. The conclusion is clear. Great experiences lead to loyalty and loyalty leads to profit. Over the next few weeks I will post a tip about how retailers should be thinking about accelerating their focus on experience. Let’s start with this one:  

Make In-store & Online Experiences Integrated and Seamless. According to data from IBM, the pandemic accelerated the shift to e-commerce by about five years. While the gains are promising, they are slipping, and retailers are racing to find ways to retain the consumers they acquired during the pandemic as consumers get more comfortable going back outside. Gone are the days where retailers can have a strong in-store experience and weak ecommerce experience - in order to stay competitive, both need to be equally great. Consumers expect a seamless experience and they will quickly pivot away from brands that consistently under-deliver.  

Technology plays a key role here. While mobile devices transformed shopping by making your favorite brands convenient and accessible, augmented and virtual reality capabilities add a layer of gamification and inspiration to shopping that further integrates digital and physical experiences. Embracing these trends now creates an appetite for innovation and sets the foundation to create a strategy for the Metaverse - a virtual world that enables social commerce and engagement. Click here to learn more about what the Metaverse could mean for business.