The retail sector has experienced an enormous pandemic-inspired pendulum swing in the past several years.
When the COVID-19 pandemic restricted in-store experiences, customers didn't close their wallets. Instead, they brought their business online, hastening digital transformation in the retail sector. According to the U.S. Census Bureau, online sales grew by more than 30% in 2020, a trend many assumed was inevitable and inexorable.
That turned out to be only part of the story. Pandemic limitations eventually subsided, and customers slowly trickled back into physical stores. That trickle has become a steady stream in 2023, as in-store spending grew by 8% in 2022.
In other words, the consumer preference pendulum isn't swinging back and forth between online and in-store shopping. It settled in the middle. "Data suggests consumers are finding a new balance between online and in-person shopping," according to a Wall Street Journal report.
This balance requires retailers to adapt again, creating digital customer experiences that build trust and facilitate a seamless shopping experience wherever customers want to complete their purchases. In many ways, their effectiveness will determine their long-term competitiveness.
One 2023 industry survey found customer experience, not price or product, is the most significant priority for retailers and customers, leading to buyers who will pay higher prices, maintain brand loyalty, and repeat purchases over time.
Here are three ways retailers can boost sales, heighten engagement, and cultivate customer loyalty in this emerging retail environment.
#1 Don't assume, connect
The customer journey is increasingly complex as customers seamlessly integrate both online and in-store shopping experiences into their purchasing patterns. Often, these decisions happen simultaneously.
For example, 75% of U.S. shoppers say they research products and purchase products both online and in-store, while 45% t say social media is influencing their buying decisions, emphasizing the omnichannel environment facing many retailers today.
When, where, and why buyers pick one platform over another is more complicated and doesn't lend itself to easy analysis. As Adobe's most recent customer experience trends report notes, "Not only do shoppers want a more streamlined and enjoyable shopping experience — they want it on all channels, all the time."
That's why retailers should avoid assuming their customers prefer one channel over another and over prioritizing it accordingly.
Practically, this means consumers should be able to leave one setting and pick up their customer experience in a different channel.
This also encompasses one of the most frustrating aspects of the buying journey: returns. As online sales continue to climb, retailers are grappling with a glut of returns, a functional and cultural byproduct of online shopping.
Since 62% of shoppers report that they are more likely to complete a purchase online if they can return an item to a physical store, effectively facilitating this critical connection is an important part of driving sales outcomes in this new hybrid retail environment.
Simply put, don't make assumptions about consumer behavior. Instead, create omnichannel connections at every point.
#2 Champion security and convenience
Customers value consistency and personalization in their buying experiences, looking for retailers to remember their preferences to facilitate a faster checkout process, personalized offers, and customizable options.
The checkout process represents a crucial juncture for retailers, providing an excellent opportunity to boost engagement and encourage future sales. A recent industry study revealed 91% of participants believe efficient and pleasant in-store transactions or expedited one-click online purchases significantly boost their chances of becoming loyal patrons.
For instance, incorporating digital wallets to accommodate customers' preferred payment methods can expand payment options and accelerate the checkout process. It's also essential to grant shoppers the flexibility to swiftly update their checkout details, such as shipping addresses or payment information.
However, retailers can't sacrifice security or confidentiality to enhance the customer journey. By utilizing customer data for real-time identity verification, retailers can minimize financial risks associated with credit card and return fraud while elevating the overall customer experience.
#3 Embrace customer-centered design
Customer experience needs to be appropriate to the transaction.
For example, one-click purchasing might be appropriate for a consumer item, but one-click checkout for a financial product is probably too little friction. A customer-centered design will remove unnecessary friction while optimizing pain points to maximize user retention, security, and convenience.
As consumers, we want to be seen and remembered. We expect to be able to move through a brand's offering — online or in person — and technology allows businesses to know their customer through every channel. Leveraging core customer data, when it's accurate, is critical to a brand's ability to recognize their customer and respond to their needs.
Accurate customer data can inform customer-centered design efforts that elevate the online experience and propel people into in-store buying experiences.
Retail right now
The retail landscape has evolved significantly in recent years, driven by the pandemic and the subsequent shift toward a balanced blend of online and in-store shopping experiences.
As retailers adapt to this new reality, they must focus on three key strategies: forging omnichannel connections, prioritizing security and convenience, and embracing customer-centered design.
By recognizing the complex customer journey and implementing these best practices, retailers can foster trust and loyalty, ultimately enhancing the digital customer experience and solidifying their competitive edge in the ever-evolving retail environment.