Why Retailers Need to Improve Local Strategies to Maximize Customer Acquisition
Over the past two decades, we’ve seen millennials put retailers through a loop. As retailers urgently set up e-commerce sites and slowed down their physical footprint, many people believed millennials would be the “death of retail.” Today, Generation Z is bringing balance to both online and offline retail models.
Gen Z consumers will hold over $143 billion in annual purchasing power this year. With this power, Gen Z shoppers are expecting more from the retailers they do business with. It’s no longer about the product or service, it’s all about how well brands are aligning with consumer values and maintaining authenticity. Beyond a brand’s integrity, Gen Z consumers expect retailers to provide them with immediate interactions and seamless experiences.
Unanswered Reviews Leave Gen Z Consumers Wanting More
Generation Z consumers live online and offline equally, and they expect the customer experience to be exceptional in both worlds. Whether they visit a store in person or browse online, they expect their feedback to be heard and valued. Unfortunately, at a 1.1 percent average review response rate, major retailers are showing consumers that they simply don’t care. As the next generation of consumers looks to hold brands to higher standards, retailers that don’t respond to customer reviews will be left in the past.
Brands Are Failing to Reach Consumers in Their Moments of Need
When was the last time you bought a new watch without looking it up online first? Today, the majority of in-store experiences start online. While most retailers are making the effort to ensure their business is listed online, they’re not doing enough to be found online. Large retailers have been falling behind in the search rankings for years now, making it harder to reach consumers in their moment of need. Gen Z consumers want immediate answers when they search for a product or service. These consumers don’t have time to find a business on page two of the search results.
Star Ratings Are Losing Their Shine
When we’re asked to give a five-star rating to everything we do, from taking an Uber ride to ordering lunch, it becomes overkill and stars begin to lose their value. Large retailers, although averaging a 4.2-star rating, have shown that there's a big difference between a brand with a 4.2 rating and a 4.0 rating. The sentiment found in consumer reviews shows that the in-store experience varies drastically by star rating. Gen Z consumers are ratings exhausted, but still rely on online reviews to make a decision about a local business. Retailers need to focus less on ratings and more on the actual feedback in customer reviews in order to provide the customer experience that consumers expect.
Retailers Must Listen, Learn, and Improve
If retailers want to reach new audiences and continuously drive in-store traffic, they need to prioritize customer feedback. Multilocation brands can work to improve their reputations and better connect with local customers through local search engine optimization and review management tools. Managing thousands of reviews a day is no easy feat, but customers expect to be heard. Implementing software to help brands be part of the conversation is the first step in successful reputation management. Generation Z is going to make brands do business better; the retailers that listen to consumer wants and needs will be the ones that last.
Cynthia Sener is chief revenue officer at Chatmeter, a local SEO platform that helps enterprise retail brands and agencies managing multiple locations increase their revenue.
Cynthia Sener, MBA, is president, Go-to-Market, of Chatmeter, the only reputation management and brand intelligence company to combine AI-powered deep listening with real-time CX agility. In 2023, Chatmeter released a new consumer survey report that highlights the impact of online reviews. The report looked at consumer behavior and perceptions across four vertical industries: retail, restaurant, healthcare, and financial services.