How to increase customer value in retail?
As consumers we want to experience more variety in all areas of our lives, what we wear, eat, do and where we go. We are more astute and see through the traditional marketing spins. We yearn for authenticity, consistency and most importantly human experience.
Despite multiple pathways and channels, we expect brands to have a cohesive experience. More importantly we have come to redefine what ‘value’ is to us today.
Retail experiences have historically been built around the premise of customers coming to retailers’ owned spaces, whether physical or digital. Visiting these was the only place to be inspired, explore products, make transactions, get advice and support.
Consumers today are spending less and demanding more value than just a transactional need. But value is not the same as price or discounts. Consumers not only expect better behaviour on a many issues from their retail brands, they are willing to pay more for it!
- 53% are ready to pay more for a brand that takes a stand on environmental and social issues.
- 64% of consumers prefer to buy from retail brands with a reputation for having a purpose other than just profits.
A retail brands status is elevated by increasing personal and
collective benefits.
66% of consumers want more meaningful experiences.
So what is customer value?
For some businesses, customer value boils down to just profits and sales.
However, it’s important to remember that customers give more to your company than just what’s listed on the price tag.
There are time costs, energy costs, and emotional costs that customers weigh when making a buying decision.
Similarly, there are different types of benefits that influence customer decisions. Some include tangible benefits:
like how the product will help them achieve their goals
their image benefits
how owning this product or service will change one’s social status in the eyes of their peers and colleagues.
Why is customer value important?
Knowing how customers feel about your product and the service experience you offer is key to building customer loyalty and increasing customer lifetime value. It’s key in maintaining long-term relationships with existing customers and earning their repeat business. It’s also important in meeting their expectations and learning how they change over time.
In a mobile-first world, customers are more connected and demanding. Some of the best-known, longest surviving brands on the high street are struggling, while significant momentum gathers for digitally native, online-only brands and fast fashion disrupter’s.
We are living in a ‘New Human Era’, where some brands are developing a deep customer empathy.
Brands are starting to talk and act like people. They care intensely about the little things. Some are innovators, some are courageous to do what matters, and some are just good, plain human thoughtfulness.
Some brands are turning customer journeys into emotional journeys that create position experiences.
Increasing customer value
One of the main dangers with this ‘New Human Era’ in retail, is that retailers and brands forget who their customer are and what they are ultimately looking for. It is always difficult to adjust and respond to the pace of change and with consumer expectations becoming more demanding.
However, the best brands take time to build relationships with their customer and are in-tune with their needs and requirements. ‘Shopper first’ retail requires a multi-faceted approach to delivering out-stating customer satisfaction and experience.
It is important to gage that retail has moved away from a ‘Transaction’ based interaction with consumers to that of a ‘Interaction’ based relationship.
The key today is not in a product but rather, in the interaction, improving the selling experience, the overall consumer journey, whether on- or offline (or both) that adds value to a brand and its product(s) / services.
Brands that build meaningful relationships resonate more with consumers.
There are 4
recommendations we recognise that will
increase value in
today’s retail market.
1. Innovation
This is a necessary advancement to incorporate into the modern retail environment, and there are many avenues that retailers can harness.
There’s no doubt about that a big percentage of internet users are making their purchases online. This doesn’t mean, however, that people have lost interest in the notion behind the full experience of visiting a physical store. The concept is to utilise digital with traditional retail tools to deliver the ideal combination for customers.
Technology simplifies the buying process while actions like entering a physical store, trying products first-hand and engaging with a ‘real’ person are maintained to enhance the overall experience.
With the increasing demand for quick, convenient and accessible retail, innovation here can be both high and low tech and not necessary about big bucks.
2. Empathy
There is a decline in the value most consumers see from brands. Globally consumers are living in a state of crisis. Trust in brands is at an all time low around the world.
Consumers are seeking more personal benefits to enhance their well-being and more meaningful experiences with the brands they interact with. Those that focus on personal and collective benefits resonate more.
An empathetic culture not only listens to customers but translates that learning into action. Brands that can anticipate their needs because they understand them as human beings and not just “consumers,” are shown to lead in growth, revenue, and proven loyalty.
Most importantly, retail brands can not only figure out what is working, but they understand why.
Today 77% of consumers expect brands to show support to people in times of crisis.
3. Agility & flexibility
In this constantly evolving and progressing new retail landscape, to obtain business success, retailers need to adapt quickly to market changes.
Retailers need to become connected, agile organisations that are relevant to customers as their needs evolve – a ‘one size fits all’ approach to the high street is dead – a more dynamic, agile, re-active format strategy is required.
All which can only be obtained if brands are customer centric in their thinking and approach.
4. Responsiveness
We live in an experience economy, where creating immersive experiences will no longer be optional – it will be crucial for retailers who want to thrive. Retailers need to be responsive to the ever changing needs of the customer.
Companies who effectively respond to change are better able to manage disruption and consistently meet their customers’ expectations.
This does not mean that retailers should be slaves to the latest trends but instead should follow their own brand story and their customer profile.
Creating a cohesive narrative that links the facts and emotions of your brand seamlessly together. Creating a solid foundation with the ability to know how to be responsive, inspire and connect with their audience.
