On Trend: What's New in Retail Customer Engagement?

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Here are five ways to keep online and in-store customers coming back for more in 2016.
Customer Experience

Customer engagement has become just as complicated as the customer journey itself, for there are many moving parts contained within every interaction. For retailers, customer engagement remains particularly tricky, as shoppers always seem to be one step ahead with regard to technology adoption.

Yet, while the tools behind successful retail engagement may be perpetually in flux, the underlying sentiment remains simple-all supporting initiatives must provide consumers with the flexibility to choose and an overarching sense of purpose.

Because there are countless elements to consider with regard to the customer experience, it's almost impossible for retailers to prepare for every hypothetical scenario imaginable. However, as Alan Lipson, global retail industry marketing manager at SAS, emphasizes, the retail customer engagement landscape continues to evolve, ultimately getting closer to the true one-to-one experience every retailer strives to achieve. Retailers need to establish strategies that push beyond generic coupons and promotions, for conversion rates are no longer the KPI of choice. Instead, the future of retail engagement relies on the culmination of experiences to foster long-term loyalty.

"How do I engage with my customer for this specific shopping experience?" Lipson asks. "Is the customer shopping for themselves, or shopping for a gift for someone else? How the retailer engages with the customer for each experience needs to be as different as the drivers compelling the customer in the first place. Differentiating the engagement and building true relationships with customers, rather than just incenting them with the next discount or more loyalty rewards points is key."

Deep down, retailers must harmonize their customer engagement and customer relationship strategies, for these two elements exist at the core of customer experience. Here are five trends that will help retailers complete their current customer engagement goals and strengthen customer relationships throughout 2016:

1. Personalized Experiences Require an Underlying Omnichannel Strategy

As consumers begin to complete more purchases online, the ability to create highly engaging in-store experiences continues to disappear. Jeff Hirsch, CMO at SundaySky, explains that retailers will need to find new ways to connect with consumers and reinvent formal physical interactions within the online space in order to strengthen customer relationships using highly personalized experiences. Even in transactional environments, retailers must form relationships by using the vast amount of consumer data now available so they may adapt communications processes to appease the given customer's specific needs and facilitate conversions.

"There's no question retail consumers have gotten savvier and more demanding, but they've also become far more discerning," says Cynthia Price, director of marketing at Emma. "Customers are increasingly seeking one brand they can turn to again and again, and not just because the store offers great prices, but also because they get an excellent experience. From relevant email promotions and personalized recommendations, to great customer service, retail consumers want it all and expect brands to deliver."

Ian McCaig, CMO of Qubit, emphasizes that, to achieve next-level personalization, retailers must finally make their omnichannel dreams reality. Most have access to the data necessary to bring about such change, but few brands have the manpower and technology needed to carry out their goals. Retailers are buried under legacy systems that hinder their ability to develop the "golden record" of the customer, as these platforms are neither agile nor responsive. Therefore, poor data practices result in the "trash in, trash out" scenario that prevents the delivery of relevant communications and experiences. Moving forward, retailers will need to invest in data centralization, for this will be the only way to effectively engage their customer bases.

Companies such as GoldieBlox take marketing one step further by emphasizing the 'personal' in personalization. Not only does the brand create imaginative toys for young girls, but it also supports causes and leads social campaigns that truly reflect its organizational values. GoldieBlox doesn't depend on its products alone to stir the creativity of young female minds. Instead, GoldieBlox continues to promote related organizations, such as Girls Who Code and the Society of Women Engineers, thereby employing its own toys as tools to spread the word about STEM careers and encourage girls to pursue their dreams-even if those dreams are normally confined to the boys' department.

2. User-Generated Content Sparks Engagement and Produces Feedback

As social and mobile usage continue to grow, consumers have increased power to decide what content they see and what content they'll bypass. Therefore, the days of brands force-feeding content out to the masses are over. Instead, as Jeffrey Soriano, senior director of demand generation at Offerpop, explains, participation will become an undeniable customer engagement trend in 2016. Brands will spend more time creating campaigns and programs designed to inspire customers to interact with and be part of the brand. Such campaigns should focus on lifestyles and emotions to build authentic and meaningful relationships in an effort to establish brand advocacy and promote engagement. User-generated will further extend the brand's authenticity and trustworthiness because such material resonates with other consumers, as most prefer to engage with content created by their peers instead of the brand itself. McCormick, for instance, allows customers to upload photos and recipes. Contests encourage further engagement by empowering participants to vote on their favorite submissions. Such tactics enable McCormick and its customers to develop relationships that breed brand advocacy.

3. Technological Innovations Blend the Digital and Physical Experience

Retailers will need to do their homework given the number of new technologies presently on the market and ones expected to hit in the coming years. As Josh Marti, CEO and co-founder of Point Inside, suggests, retailers should start small with a pilot program in a few stores to test any given technology before deploying such tools across the company. Retailers will also need to invest in their underlying technology infrastructures to build a strong foundation for new projects, thereby making new tools easier and faster to implement. Once they've tested and deployed those tools best suited for their client bases, retailers must also continue to test and optimize their approaches in order to constantly improve engagement and experience.

For many retailers, mobile applications have become the technology of choice, as shoppers almost always have their smart devices within reach. During the holiday season, for example, Target's mobile app provided shoppers with interactive in-store maps, store-specific product search, and Black Friday doorbuster deal maps so customers could quickly locate the aisle number and shelf location of their desired products. Lowes Foods also employs mobile technology to provide its grocery shoppers with the ability to shop, plan, get store directions, and clip and redeem coupons directly from the palm of their hands. According to Klaus Werner, head of e-commerce, consumers are looking for robust online capabilities, such as interactive, personalized weekly ads and an online shopping experience that empowers them to make the best selections for them and their families, while also allowing them to maximize their savings. Such tools will allow Lowes Foods to strengthen customer relationships and bring the brick-and-mortar experience to life online.

4. Convenience Appeals to Customers' Constant Need for Immediacy

Consumers typically pursue the path of least resistance when it comes to purchasing the goods they seek. For the retail industry, this new 'convenience economy' will come to play an increasingly important role. Also known as the on-demand economy, this approach depends upon creating the most convenient shopping experience possible for the customer in terms of time, effort, cost, and immediacy, says Chris Bryson, CEO of Unata. Retailers want to provide customers with an easy way to fulfill purchases the moment inspiration strikes. Mobile solutions will be at the heart of such expansion, for these tools are always within reach. For instance, Starbucks' 'Order& Pay' service allows customers to place their order and pay via mobile before they even reach the retail location so their drinks will be ready and waiting for them once they arrive. PriceLocal, on the other hand, allows Amazon customers to browse local merchants who are willing to sell the same item in-store for the Amazon Prime price. Such tools allow shoppers to satisfy their needs in real time, while also promoting brick-and-mortar engagement, thereby increasing the likelihood of repeat patronage.

5. Store Relationship Management Rejuvenates Brick-and-Mortar Sales

Chris Taylor, CEO of Square Root, claims that retailers will discover the power of SRM-store relationship management-in 2016. Much like CRM software has enable retailers to use data to better understand who their customers are and how they like to shop, SRM will allow retailers to shift their focus to better understand and improve store performance, with a focus on data and knowledge sharing. With the adoption of SRM, training will get a major overhaul, time to value and knowledge loss due to turnover will decrease, stores will gain greater insight into performance against comparable locations, and they'll be empowered to share and implement best practices.

"The use of mobile phones and smart devices increases the likelihood that consumers will make impulse purchases," says Guy Yehiav, CEO of Profitect. "Since these channels are so visual and paint an idealized picture of what a product can do for a consumer, it's vital that retailers are able to leverage these emerging channels more and more within physical storefronts. Whether it's offering promotions using a certain hashtag, or opening a specialty pop-up shop within a traditional big box retailer, the more stores are able to appeal to today's shoppers, the more luck they will have in the future."

While most retailers focused on customer-facing initiatives throughout 2015, Taylor adds, retailers will ultimately look to increase agility, boost the bottom line, and improve the customer experience through this renewed focus on internal operations in 2016. Retailers will be expected to do more with less in their physical stores, making efficiency and productivity pivotal priorities with regard to brick-and-mortar performance. The ability to try new things quickly to see what works and what doesn't will be essential for retailers to thrive.

Ultimately, the next year will likely be the turning point for many retailers, as these trends indicate the critical need for change throughout much of the industry. Retailers must break from tradition to engage customers on their own terms in an effort to create the experiences that support long-term loyalty and advocacy.

"Much of the industry looks at the customer being loyal to the retailer," Lipson explains. "Turn that idea on its head: Are retailers loyal to their customers in terms of their wants, needs, and desires? Are they true to how they treat their customer as a shopper? Customer engagement is a validation of that brand promise, and the best retailers go further to delight the customer. Fall short, disappoint the customer, disregard your brand promise, and your hard-won customers will likely take their business elsewhere."

Once retailers recognize which engagement strategies need to change and which tactics resonate most with their customer base, leaders will be able to bring their companywide goals to fruition.

EXPERT OPINION
EXPERT OPINION