Why CX is Retail's Sharpest Edge

First off, let’s set the scene with a bit of background. For those who are unaware, the de minimis provision, which allowed packages under $800 to be imported to the United States duty-free, has been abolished via executive order. The intention was to help U.S. retailers from getting undercut by cheaper imported goods, a development which may initially feel positive. For many retailers, however, the news is far more complex and even a tad unsettling because it means the days of competing purely on price are behind us.

And now that the price-point playing field just became a lot more even, what’s a retailer to do? If price alone isn’t how you separate yourself from competitors, how do you stand out to consumers now? How do you differentiate with the immediate in mind?

I’m here to tell you that it all comes down to experience. Customer experience (CX) is how you build your edge in a post-price point era. Your brand must create value through a blend of service, personalization, convenience and curated emotional connection.

Take Macy’s, for example. Its latest earnings report caused its stock price to jump over 20 percent when the department store chain announced it was tracking better sales than all the analysts expected. This surprise, however, was only unexpected if you hadn’t been paying attention to the work their CEO, Tony Spring, has been doing since he took over. Considering that, by 2030, global e-commerce sales are expected to make up almost a quarter of all retail sales, Macy’s has not only retained its legacy brick-and-mortar presence but has turned things around fairly quickly by re-centering its strategy with CX at the core.

Experimentation in retail is never without risk (both of reputation and revenue), however, via its Reimagine initiative, Macy's updated 125 stores with a hyperfocus on customer service and merchandising, all in the name of delivering a more enjoyable and personalized shopping experience. Even the locations of the stores mark a shift from what you would traditionally expect from Macy’s. The changes include moving away from traditional mall-based locations in favor of smaller, standalone stores with more attentive staff, more modern and thoughtful layouts that highlight curated products, and faster cycles of new merchandise. This transformation extends online as well, with a revamped, brand-forward website built to tell stories rather than just sell products (a strong point of differentiation from one of its prime competitors, Kohl’s).

The lesson from Macy’s is clear: Success comes from knowing your customer segments deeply and tailoring experiences for them. While you must continually earn your customers’ trust, delivering great experiences is a prime ingredient in fostering a long-term relationship. And that requires having a deep understanding of what your customer base wants and expects.

Further case in point, Macy’s shift to smaller-format, curated stores and Nordstrom Local’s service-oriented hubs. Taken together, they prove that stores are no longer inventory warehouses, but experience nodes. These smaller shops offer easy online order pickups and returns, express alterations, gift wrapping, and other unique offerings that cater to customers at each location — designed to facilitate seamless, personalized journeys.

Remember, those who win at the “register” will increasingly be those who deliver the best experience for consumers — with consistency. In fact, consumers are willing to pay a little more for the same product if the process of buying, and the feeling it creates, is better. In fact, three out of four say experience is “an important factor in their purchasing decisions, behind price and product quality.”

We're in a new age of retail; one where customers are drawn not just by what you sell, but by how you make them feel. That requires abandoning a once-and-forever mentality, while also thinking in terms of creating end-to-end value — not episodic wins — by securing interest, engagement and, ideally, loyalty. That's the trifecta for a repeat customer. And after all, that’s what every retailer has their sights set on.

Lauren Milne is chief strategy officer of Apply Digital, a global experience transformation partner.