- Retailers must shift from a product-first to a customer-centric strategy to foster long term loyalty and brand advocacy.
- Customer expectations and demands are skyhigh, meaning efforts must move beyond marketing towards data-backed decisions to offer a truly personalized experience.
- As inflation squeezes discretionary spending, future-proof your business by fostering relationships with your most loyal customers.
- Physical and digital worlds have merged as brands encourage immersive real-life experiences while maintaining convenience and efficiency.
What Is Customer-Centricity?
Pivoting from a product-first to a customer-centric approach is critical for retailers navigating the post-pandemic world, which has seen digital innovations accelerate and cost of living challenges grow. As shopping behaviors consequently shift, retailers need to stay agile and put their customers at the heart of the decision-making process. This means truly understanding who they are and what they value, as well as staying in tune with their ever-changing expectations and purchase habits to foster high levels of loyalty and long-term brand advocacy.
Gartner recently highlighted three factors that help determine if an organization is truly customer-centric. This includes engaging and listening to customers, understanding that products and solutions don’t solve every customer problem, and changing internal structures in the face of customer needs.
McKinsey expands on the benefits of customer-centric strategies from recent research and found that, “retailers have access to increasingly more granular and sophisticated data on their customers’ behaviour and purchases. This visibility will enable merchandising to accelerate the move from “art” to “science,” particularly for certain categories of business (such as replenishment goods and commoditized products).”
How Is the Customer Experience Evolving in 2023?
1. Customer Loyalty is More Important than Ever
As inflation and rising living costs continue to increase, customer loyalties are being tested as purchases become more considered and restricted to essentials. Recent EDITED data has found that brand loyalty is actually at a two-year high as new customers appear less confident shopping outside their favourite retailers during the cost of living crisis. Nurturing these relationships is critical to retaining this customer spend once wallets open up again and ultimately future-proofing your business.
2. It’s Becoming Hyper-Personal
The retail landscape has shifted considerably since pre-2020. The digital acceleration of the market has opened up multiple channels for consumers to shop, learn and interact with brands. This explosion has also meant that consumer expectations are sky-high, demanding relevant products tailored to their preferences, 24/7 availability and competitive prices. Offering a personalized experience is therefore no longer limited to marketing efforts and retailers need to leverage data to understand their customers’ shopping behaviors and habits on a deeper level in order to make informed and targeted decisions. EDITED’s Basket Analysis tool makes it easy for teams to discover what high-value customers are purchasing together to optimize marketing and merchandising strategies and drive higher average order value.
3. New Technologies & the Rise of Phygital Retail
Technological advances, such as augmented and virtual reality, are creating huge opportunities for retailers looking for new ways to interact and engage with their customer base. The blurring of physical and digital lines has grown in popularity as brands seek out entertaining and immersive real-life experiences, while maintaining the efficiencies and convenience of online shopping. McKinsey & Co. also stresses the importance of creating a compelling omnichannel experience throughout the customer journey with its research finding that “best prices” were the most important factor in online purchases, while “interacting with products in person” is the biggest driver in store.
The rise of generative AI and emerging tools, such as ChatGPT, have also garnered attention in 2023, posing the potential to revolutionise the industry and the customer experience. Zalando recently announced its plans to launch a fashion assistant powered by ChatGPT to enhance its online experience and product discovery.
EDITED’s in-house team of analysts combine years of industry experience with retail data to provide the most up-to-date trend reports and insights into industry shifts. Click here to learn more.
Retailers Putting Customers First With EDITED
EDITED is the world’s leading AI-driven merchandising experience platform that empowers brands and retailers with real-time decision making power that drives profits and inspires customers.
We help retailers increase margins, generate more sales and drive better outcomes through AI-driven Market and Enterprise Intelligence to fuel Automation. By connecting business analytics and external market data, retail’s most successful brands and retailers use EDITED’s platform to get closer to their best customers and future-proof their business.
Randy Cousin, SVP of Product Concept at Tommy Hilfiger believes “being consumer-centric means we are moving at the speed of culture, but also changing and evolving with the consumer at large. That’s why it is especially important to have a partner like EDITED who can help us look at what the world is doing and how it is changing.”
Boston Proper has also turned to EDITED’s Connected Commerce platform to maintain their focus on their customer, Lucy, as they tansform into a digital-centric company. President and CEO, Sheryl Clark, stated “we use EDITED for industry trends, to help us really understand what’s going on in the marketplace, and to understand what is behind our own internal data so we can take immediate action on our business. Data, customer insights, and industry trends feed the product and creative teams, and guide us as we evolve and create each new collection for our customers.”
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