Why Your Retail Business Needs to Focus on Customer Experience

Why Your Retail Business Needs to Focus on Customer Experience

To gain a holistic view of a retail business’s health and performance, retailers must focus on both qualitative and quantitative metrics. While most retailers collect and review sales metrics and KPIs, such as sales per square foot, sales per employee, and profit margin per unit, these numbers alone do not tell the full story.

In order to keep a look-out for the long-term success of your business, other metrics must be involved in your analysis. Specifically, your customers’ level of satisfaction and the quality of your customers’ experience can be a useful measure for predicting long-term performance not captured in transactional sales data.

A lot of the time, the emotional connection and satisfaction is the driving force in customers  returning to your store time and time again. However, if you aren’t gathering metrics on what drives this connection, you miss out on the opportunity to improve that experience and satisfy new and existing customers.

Experience is a tricky thing to quantify because experience is not generic; it varies between shoppers and this is in large part due to their expectations. Some prefer to discover on their own while others seek out interactions with knowledgeable store associates. When entering a store, both of these shoppers are grading their experience differently. While there is no silver bullet, by beginning to get a pulse on what your customers experiences are, you can slowly identify the ways to deliver – or ideally overdeliver – against their expectations.

Let’s take a closer look at the importance of creating a positive retail experience and how to gather qualitative metrics on your customer experience.

A Positive Retail Experience Creates Brand Loyalty and Impacts the Purchasing Decisions of Customers

Why Your Retail Business Needs to Focus on Customer Experience 1
Source: Gartner

Every time a customer interacts with your business, they have an experience, whether positive, negative, or somewhere in-between. The good news is that there are a variety of things you can do to help provide a positive experience for both in person and online customers.

For online retail, your focus should be on improving convenience and accessibility as a majority of people shop online to save time and energy. This is seen in the recent, massive investment retailers have made in developing mobile apps and increasing their delivery speed.

Since this is an online interaction, your customers don’t expect much in the way of a sensory or emotional experience. They’re merely after convenience and accessibility. But in the case of brick and mortar stores, developing an emotional connection with customers becomes much more important.

Purchasing from a physical store is still the preferred method of shopping across generations. Customers want to see and interact with products which isn’t possible from a computer screen or mobile phone.

Why Your Retail Business Needs to Focus on Customer Experience 2
Source: Salesforce Shopper-First Retailing Report

Many factors can lead to a positive customer experience, including how a customer was treated, how their senses were engaged, and the ease of navigation throughout the store. Focus on engaging the customer so that their trip is memorable in some fashion. When you can repeat this experience over the duration of a customer’s relationship with you, you build loyalty with that customer.

Here are some examples of what retail stores can do to build that emotional connection with customers:

Activities and Displays Inside the Store

Examples:

  • In Toys R Us’ relaunch, their stores will feature interactive toy demonstrations, spaces for special events like birthday parties, new activities every day and open play areas
  • Nordstrom’s Men Store, in Manhattan, has “The Clubhouse” which is a stylish bar where you grab a cocktail or glass of wine while overlooking Central Park and Columbus Circle.
  • Target has huge Lego displays in their larger footprint stores and Easter egg hunts for kids.
  • Whole Foods has bars inside their stores so you can have a drink while you shop, along with food samples

Demos

Examples:

  • Bed Bath & Beyond usually has an interactive Dyson display area.
  • Scheels has a putting green so you can demo their golf clubs.
  • Target added more brightly lit mirrors and a big table in the middle of the beauty section where you can test their beauty products.
  • Canada Goose has a “cold room” where customers can try on different jackets to see how they actually work in cold temperatures.

Apps that bring Value to the Customer

Examples:

  • Foot locker has an app that updates its customers on when new shoes are released and also lets them join product “queues” so they don’t have to wait in line when a popular item is released.
  • Starbucks’s app allows the coffee drinker to order drinks ahead of time for a quicker experience, view new additions to the menu and with the recent Spotify integration, customers can view what songs are playing in that specific store and add them to their playlists.

These efforts are for the purpose of creating a valuable, positive retail experience for customers.

Why Your Retail Business Needs to Focus on Customer Experience 3

Source: Inmoment Retail CX Trends: Trust and Loyalty in The Experience Economy

In order to gather qualitative metrics about customer satisfaction and experience to improve your business, you need the right tools and incentives to encourage your customers to share their opinions.

Here are some tools you can use to gather qualitative metrics:

NPS (Net Promoter Score)

According to Medallia:

“The NPS is an index ranging from -100 to 100 that measures the willingness of customers to recommend a company’s products or services to others. It is used as a proxy for gauging the customer’s overall satisfaction with a company’s product or service and the customer’s loyalty to the brand.”

The NPS is useful because it’s easy to understand and you can see how you stack up against other retailers in your industry. It also doesn’t require much time for the customer to fill out.

While the NPS has its benefits, it shouldn’t be the only benchmark you use for measuring your customer experience.

Analyze the Heat Map of Your Store

By looking at your heat map, you can pin-point the best locations to place displays and host in store activities. Your store’s heat map can also tell you how much traction your activities, displays, and demos are getting.

Customer Interviews or Focus Groups

To gain in depth knowledge about what drives a positive customer experience, you need to listen to your customers. Some people will be unwilling to take time out of their day to be interviewed, but others will be happy to share feedback that will lead to a better experience for them in the future – take advantage of their desire to be a part of the process. Creative ideas to see what the customer thinks include ‘shop along’ and focus groups specifically honed in on design thinking. The goal is to truly understand and discover friction points as well as where the customer gets delight and joy.

You may need to provide an incentive to get customers to agree to the interview. It’s well worth it though since these insights can help you develop a better strategy for providing positive experiences for your customers.

Customer Experience Surveys

Many retailers use customer experience surveys but have trouble getting customers to actually fill them out. One way to combat this is to offer an incentive for filling out the survey. This could be a gift card, discount on their purchases, a sweepstakes, or in-store rewards points.

Another way to get customers to fill out surveys is by delivering them in a unique, creative way.

For Example:

  • Some stores require you to fill out a short survey before you can access their wifi network.
  • Many stores now have kiosks when you walk in the door so a customer can quickly fill out a digital survey.

The key is to keep these surveys short and to have the customer fill them out at a variety of different interactive points across their purchasing journey. This will provide you with information about what drives someone to go from a new customer to a loyal one.

Qualitative Metrics and the Customer Experience Should be a Priority for your Retail Business

It is more important today than ever before that retailers measure and take action on the data they collect about their customers’ experience. With many businesses already making an effort to improve their customer experience, you need to create your own strategy to keep up with the competition.

There are many ways to go about gathering and analyzing these qualitative metrics. Some businesses choose to outsource this effort, while others create their own in house solutions.

Whatever path you take, the important thing is that you begin measuring and improving your customer experience to drive loyalty and long-term success..

To connect and learn more about this topic, contact The Navio Group today.

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