Retail in 2023 and Beyond: 'Empathy' Holds the Key to Customer Retention
In the rapidly evolving retail landscape, the brands poised for success in 2023 and beyond are those that can effectively demonstrate empathy toward their customers and deliver a highly personalized customer experience.
These times present significant challenges for retailers. The escalating cost of living has caused consumers to scale back on spending. Geopolitical uncertainties have fractured supply chains, and technological advancements continue to disrupt the sector.
“Show me that you know me” is the growing customer demand. This necessitates that retailers cultivate a heightened sense of empathy, providing services tailored to meet customers' unique needs and preferences, regardless of the contact channel. Establishing empathetic and personalized human connections at the forefront, underpinned by flexible and robust operational capabilities to adapt to changing customer requirements, has never been more crucial.
Building a Cutting-Edge Foundation to Develop Emotional Intelligence
Here's where the troika of digital, data and analytics, and domain expertise comes into play. By harnessing the combination of these elements, retailers can develop a comprehensive, 360-degree view of their customers across all channels and touchpoints. This not only enables them to satisfy current customer demands, but also anticipate future needs through the utilization of recommendation engines and next-best-action tools. Through integrated cross-channel analytics, retailers can gain a deeper understanding of customer journeys and sentiment, facilitating the identification of optimal timing, nature and media for engagement, as well as identifying friction points.
For instance, a leading British retailer struggling to make sense of vast amounts of customer data co-created a cloud-based customer data platform (CDP) to achieve hyperpersonalization through a unified customer view.
As retailers strive to retain customer loyalty, leveraging digital capabilities becomes essential in mitigating minor inconveniences that might drive customers to rival brands. Advanced artificial intelligence (AI)-driven chatbots and voice bots can significantly reduce service time while enabling greater personalization. These innovative solutions foster stronger customer relationships and enhance customer lifetime value, driving loyalty.
Deciphering Customer Sentiment
Retailers can employ rapidly emerging technologies even before directly interacting with customers. As social media and review platforms empower customers to share their retail experiences and seek recommendations, understanding customer sentiment and identifying opportunities for product and service improvements through Net Promoter Score (NPS) and churn analytics becomes vital for success.
Automated sentiment analysis not only helps brands gauge customer sentiment but also provides actionable insights, market intelligence and valuable information about emerging trends. For instance, a fashion retailer can identify upcoming trends for the next season or a car company can gather feedback on the performance of its latest model directly from drivers. This information can be extracted from various sources, including text, calls, posts, email, chat or social channels.
Positive customer sentiment can be leveraged as a means of social media advocacy, while negative sentiment can be used to address customer problems promptly. By consolidating and analyzing data, brands can also identify customer communication channels or departments that need to up their game.
Retailers must adopt a laser-sharp focus on experience and empathy to ensure customer retention, as overall retail growth remains subdued. With the rise of omnichannel shopping, retailers must consistently provide excellent customer experience across all touchpoints. Undoubtedly, disruptive technologies such as generative AI will facilitate this transformation, but it’s up to retailers to make customer empathy and experience their guiding principles in 2023 and beyond.
Manish Vora is the business unit head, manufacturing, retail and consumer products, WNS, a business process management company.
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Manish Vora is the Business Unit Head of Manufacturing, Retail & Consumer Products at WNS. He is responsible for the strategy, growth initiatives and financial performance of these businesses. Previously, he served as Executive Vice President and Head of Sales (Horizontal Offerings) at WNS. With a background in finance, Manish has decades of experience in outsourcing, consulting, risk management, investment banking and audit.