What's Your Retail Customer Experience Action Plan for 2016?

Here are three factors every retail leader must actively develop to gain or maintain the competitive advantage in the coming year.
Customer Experience

In today's competitive retail market, customer experience never sleeps, requiring constant attention and reinvention to maintain the advantage. Retailers continue to struggle with the industry's digital transformation, as well, for the rapid evolution of consumer behavior generates added pressure to innovate with great speed. Yet, while leaders realize this need to keep pace with their customer bases, many remain in the early stages of strategic development.

According to Aaron Rudger, senior director of product marketing for Dynatrace, digital channels now act as the face of many retail brands. Consumers, he says, typically turn to these platforms as part of the average customer journey. But, while these channels offer opportunities for better customer engagement and increased sales, retailers have yet to master their internal digital strategy.

Thus, in 2016, most companies will begin to build upward and outward on the foundational strategies they've already adopted in an effort to satisfy these changing demands. Rudger emphasizes that, most importantly, retailers must learn how to adapt quickly to digital disruption and embrace new digital trends, all while successfully maintaining positive customer experiences on existing digital properties.

Here we examine three priorities retailers must have at the top of their 2016 to-do list if they wish to preserve their competitive edge and complete their own digital transformations:

1. Establish an Omnichannel Experience That Leverages Customer Data Across All Touchpoints

Over the years, retailers have worked tirelessly to deliver the 360-degree shopper experience. However, while many companies have made great strides on the path toward the ideal, seamless integrated experience that extends beyond channel-specific strategy, omnichannel customer experiences remain lackluster, as retailers drown in excess amounts of consumer data.

"For years, retailers have been talking about omnichannel," says Matthew Storm, head of marketing for Americas at NICE Systems. "However, that often meant eliminating operational friction between bricks and clicks. Now retailers understand that customers are moving fluidly from the digital to the physical. In 2016, we'll see retailers focus more on understanding those pathways and how they can build brand loyalty at every inflection point along the customer journey. To make this possible, retailers will need to gather data at every customer touchpoint and view those interactions in a way that aligns with the entire business."

Storm explains that, historically, retailers considered omnichannel strategy to be an operational challenge or sought to understand simplistic journeys, like showrooming, creating a myopic approach that's resulted in fragmented customer experiences and an emphasis on price comparison. However, now retailers will begin to shift their views of omnichannel to look beyond whether or not consumers can return items bought online at the brick-and-mortar location. Instead, they will look at this collection of moments that matter as a journey in order to create seamless experiences across all channels.

Michele Dupr?group vice president of retail, hospitality, and distribution for Verizon Enterprise Solutions, notes that brands must actively leverage behavioral data to identify who their customers are, what they like and dislike, and how and where they shop, so they may adequately anticipate demand, drive promotions, and improve in-store or online experiences, which will drive more personal engagement and customer loyalty.Edwin Lee, vice president of retail at MediaMath, emphasizes that multi-touch attribution-being able to connect in-store and online purchases with digital touchpoints-has become increasingly important. Channels will become more addressable, meaning retailers will be able to connect their first-party data, such as the consumer's anonymous ID and purchase history, to send customers relevant messaging across devices and channels. Only then will retailers truly be able to expand upon their existing strategies to deliver the omnichannel experiences customers have come to expect.

2. Develop Personalization Strategies That Promote Transparency, Loyalty, and Selflessness

Because consumers are constantly flooded with more buying options than ever before, retailers can no longer rely upon selling based on utility and relevance to capture shoppers' attention. The former "sell, sell, sell" approach will not sustain retailers in a marketplace filled with educated buyers who seek more than just products in boxes, says Meera Murthy, customer success director for Evergage. Instead, brands will need to rely on personalized shopping experiences by recognizing a shopper, captivating her attention, inspiring her journey by removing obstacles and creating confidence, and delighting her enough to come back. Transparency will remain an essential element as retailers work to enhance personalization. Establishing an open dialogue with customers will provide context and inspiration for the products they sell.

According to Storm, in 2016, disruption will not be about new channels, but how retailers use existing channels to deliver individualized experiences that encourage consumers to continue their journey. Visual commerce sites, such as Pinterest, will aid such efforts, as these types of channels serve as inspiration, while also allowing consumers to complete their transactions directly from within the given platform.

Murthy adds that customer experience has become the key differentiator between one-time shoppers and loyal customers. Providing one-of-a-kind, rewarding experiences, however, has the power to reenergize existing customers and build new, loyal relationships. Retailers that tap into the consumer's charitable nature, for example, make customers feel as if they're part of something greater than themselves, thereby shifting the focus on personalization to emphasize the personal, instead. TOMS, for instance, doesn't consider itself to be a fashion brand. Instead, the company thinks of itself as a movement, for its mission empowers consumers to help those in need simply by purchasing the goods the company sells. Consumers aren't just shoppers-they're community members. Through TOMS' One-for-One giving model, consumers need only buy a pair of shoes or eyeglasses, and another will be donated to someone in need. This strategy, in particular, appeals to Millennials' philanthropic tendencies, encouraging repeat purchases.

3. Embrace Mobile Behaviors to Expand Acquisition, Retention, and Engagement Techniques

Earlier this year, Google forced retailers to make its sites mobile-friendly, or else be penalized in search results, thereby serving as the catalyst for this perpetual emphasis on mobile development. Thus, in 2016, companies are likely to take notice of how apps are being used and tailor their strategies to appease the behaviors of their customer bases. Dupr?xplains that leveraging technology to establish more personal relationships with customers will likely strengthen existing and loyal relationships, while also attracting new customers to capture market share.

Rudger adds that smartphone apps are no longer simply another portal to an e-commerce site. Instead, apps stand as new touchpoints to create an immersive brand experience, giving retailers another opportunity to create authentic relationships with customers, drive greater brand loyalty, and ultimately increase customer spend. Failure to adopt a mobile-first mindset, Rudger emphasizes, will result in lost customers, lost revenue, and inevitably, the loss of their competitive edge.

"We've already seen retailers deploy innovation services for customers via beacons and personalization, and that'll continue into the New Year," Rudger adds. "Retailers will be able to access customers in real time via their mobile devices, giving retailers the ability to show customers past purchases, update them in real time on sale items, or suggest items that may compliment items already in the customer's cart."

Nordstrom sets the standard when it comes to customer experience. Its mobile team has been experimenting with location-based personalization, which blends each of the three aforementioned priorities into one seamless strategy. Nordstrom identifies customers who may have started their shopping experience online, particularly those who've added items to their carts and then abandoned the purchase. Nordstrom then sends them a mobile notification when they're close to the physical store. The synchronization between Web and mobile allows Nordstrom to target customers with relevant information by using the data they've already provided, making them more likely to return and complete their transactions.

But, as Storm notes, it's becoming increasingly expensive to acquire new customers in today's competitive retail environment. Future goals and strategies must be grounded in the retailer's focus on building lasting relationships with existing customers in order to sustain growth and momentum. Therefore, moving forward, companies will need to take an in-depth look at their overall brand experience. From their Web and social presence, to how employees engage with shoppers, every single touchpoint will be critical for continued loyalty and success.