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Customer experience (CX) can make or break a retail brand. Marketing and CX teams have had many disruptions over the last few years that have inspired them to improve customer centricity throughout their organization. For example, the rise of digital commerce is a major trend that has changed the ways retailers interact with customers. While digital commerce was popular even before the COVID-19 pandemic, it became a necessity in 2020 – forcing marketers to think more carefully about how they foster customer centricity and what needs to change. Beyond this, customer expectations are rising in many ways. They expect more from the interactions they have with brands on any digital channel.
SAP recently partnered with CMSWire to explore the latest trends in the retail industry and what retail organizations are doing to become more customer centric. Survey results found that retail organizations have been more than willing to invest in new strategies and innovations. Here are some of the biggest findings from the survey and how they can inform any retailer on effective new strategies.
Promising Changes in the Retail Industry
The retail customer experience has changed significantly in the past three years. More than 60% of respondents have been proactive about making multiple changes to their business strategy in response to the disruptions around them – changes that include targeting new marketing segments, optimizing digital commerce to ensure profitable outcomes and improving digital customer experiences and conveniences.
This industry also appears to be more focused on data than other industries – unsurprisingly, since customer data allows marketers to cater to individuals’ preferences and keep them satisfied. Almost half (45%) of respondents said they are advanced in their data unification, meaning they have combined all the data their organization possesses so it spans multiple systems and can be treated as a single source. Integrating data helps ensure people across teams and departments can make decisions based on the same data, and everyone can have access to key numbers.
Respondents are also taking proactive steps to address changes in the privacy landscape and the end of third-party cookies. A majority (62%) say they are moderately or very concerned about the impact of changing privacy regulations on their job. Some of the more common ways they are responding to this new landscape include keeping stricter privacy principles than current regulations require and improving the partnership between marketing and the legal/compliance team.
Significant Gaps in Organizations’ Strategies
Throughout all these opportunities for growth and success that come with a changing retail environment, organizations are also facing many challenges. For example, many respondents said that while their organization collects many types of data, they don’t actually use the data they collect strategically. Collecting data for the sake of collecting it is just as helpful as investing in a technology for the sake of having the “shiny new thing” without using it to its full potential.
Another major gap for organizations is the lack of personalization. While personalization done well can lead to many benefits – such as higher customer satisfaction and retention – many survey respondents indicated that they’re not doing as much as they could be with personalization. While there’s been some progress, with 38% of respondents saying they already derive benefits from personalization, there’s opportunity for organizations to do more by personalizing areas with high customer interaction touchpoints, like sales and customer service scripts.
Respondents also cited many shortcomings in the existing commerce platforms they use, including lack of features, lack of agility and lack of scalability. SAP experts encourage retail decision-makers to shop around and ask the right questions to make sure that they’re finding the platform with the right capabilities for their needs.
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Lessons From the Most Advanced Retail Organizations
SAP’s survey divided respondents based on how advanced their data unification processes are. By comparing the data between the most and least advanced organizations, we can observe some of the ways more mature organizations go above and beyond to get the most out of their data and develop best practices.
We found that advanced organizations are more likely to use artificial intelligence in a variety of ways, and they’re also more likely to be using an omnichannel strategy. A majority (74%) of respondents from advanced organizations use omnichannel, versus 49% from intermediate organizations and 37% of beginner organizations.
Another key difference between the maturity groups is that the advanced group is more likely to use the data they collect and actually derive benefits from it. This shows us that in a world where customers increasingly expect personalized experiences, we can learn a lot from these advanced organizations.
Finally, advanced organizations have seen better results than others. Fifty-seven percent of advanced organizations have seen higher customer satisfaction (CSAT) as a result of their efforts to become more customer centric, versus 40% of intermediate organizations and 44% of beginner organizations. Similar trends exist for other key retail KPIs like higher customer retention and increased brand value.
Conclusion
Based on these survey results, we can see that retail organizations have been nimble and innovative in many ways these past few years. Customer centricity is a goal they are admirably striding toward – through means such as future-proof data privacy policies and smarter uses of personalization.
Still, there are many opportunities for improvement, and the vanguard organizations mentioned in this paper serve as a great example for what can be accomplished with the right mindset, people and resources. SAP also recommends that retailers be careful about the commerce platform they use and seek something out that is agile and scalable enough to keep up with unpredictable customer trends.
Download SAP’s whitepaper “How to Improve Customer Centricity in Retail” here.
