CMSWire, the leading publication covering digital customer experience, recently featured perspectives from Chris Westall, Senior Vice President of Strategy at Hero Digital, in their article: How to Create Better Hybrid Retail Customer Experiences.
Written by Chitra Iyer, this article highlights questions business leaders should ask when seeking to deliver more integrated customer experiences in a hybrid marketplace. Check out the full article below.
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A Gartner survey found that more than two-thirds of brands today compete on customer experience, far more than those who compete on price or features. For retail brands, not only is CX a true differentiator, but it is also a crucial revenue generator. Additionally, 8 of 10 customers spend more on brands that deliver better browsing, shopping, payment, delivery and post-sale experiences.
Despite this awareness, studies repeatedly find brands falling short of customer expectations when it comes to delivering winning CX. This could be because CX itself is not easily defined — it is an amalgamation of many micro-experiences across an increasing array of channels, platforms and devices. It is not just about better technology or stronger data analytics, but also the right balance of human touch, friction-free processes, consistency, intuitiveness, trust and credibility.
In a hybrid retail landscape where the lines between digital and physical shopping are blurring, delivering winning CX is only going to get harder.
Asking these four questions can help retailers deliver more integrated customer experiences in a hybrid marketplace.
Is Hybrid Different From Omnichannel?
In the book Remarkable Retail, Steve Dennis cites a Forrester study to remind us that one of the most important facts lost in everyone’s hyper-focus on the growth of online shopping is that digital channels influence roughly three times as many physical store sales as ecommerce transactions. Recently a Forrester report predicted US digital-influenced retail sales will grow from $2.7 trillion in 2022 to $3.8 trillion in 2027. Investing in ecommerce as a distinct sales channel completely misses the reality of hybrid customer behavior.
While many use the term interchangeably, looking at retail as “omnichannel” is fundamentally different from looking at it as “hybrid.” The former is channel-centric and focuses on making the brand available to customers across all channels and devices. But while it aims to engage customers on each channel, say online or in-store, it doesn’t necessarily deliver a connected experience across them.
The hybrid approach doesn’t try to create better digital or in-store experiences. It simply delivers better shopper experiences by focusing on creating engagement and value at each touchpoint in the customer’s journey. The goal is to make the shopping and brand experience consistent and friction-free, irrespective of channel or device.
New buying behaviors like ROPO (Research Online, Purchase Offline; or Research Offline and Purchase Online, depending on whom you ask), BOPIS (Buy Online, Pick Up In Store), BORIS (Buy Online, Return In Store) characterize this connected journey occurring across digital and physical channels and devices.
The challenge for brands is to step away from the channel-centric approach and build the CX around the customers’ hybrid shopping journey.
How Can We up the CX Potential of Our Physical Stores?
Amazon, the holy grail of ecommerce, is investing in and experimenting with physical store formats. Walmart continues to expand its physical footprint around the world, despite successfully embracing ecommerce. Digitally native vertical brands (DNVBs) are opening physical stores in droves.
The lesson for traditional brick-and-mortar retailers is not that physical retail is not dying; but rather that physical retail needs to reinvent itself as a key touchpoint in the hybrid, connected customer journey.
The question is, what roles can the physical store play in the hybrid customer journey?
Physical stores can offer a rich buffet of “micro-experiences” to customers that can go a long way in helping sell products, even though the actual sale may occur later, at another store, onsite, on social media or digital marketplace.
The branding and aesthetics, store layout and signage all aid product discovery; service, trial, and sampling aid selection; and where applicable, the checkout, payment, returns and loyalty programs aid retention.
Nich Weinheimer, executive vice president of strategy of omnichannel performance marketing platform Skai said in-store experiences have not evolved as quickly as consumer behavior. The opportunity to improve and monetize each customer touch point—from parking to pickup—is enormous.
In the hybrid retail world, physical stores can be so much more than a place to stock and sell products.
Think concept stores, in-store pop-up experiences, design, and new product launch centers, spaces to live-stream social selling experiences to the community, guided or appointment shopping, subscription offerings and more.
Many stores are doubling up as online-order fulfillment centers and service centers for products purchased on other channels. Some are experimenting with multiple sizes and formats, such as dark stores and express stores, to support the dominant hybrid buying patterns in different geographies.
Finally, there is the rise of the store as media itself. Signage and branding was always a big part of the physical shopping experience, but technological innovations in retail media are also starting to transform the in-store brand experience.
What Data Helps Make the Best CX Decisions for Hybrid?
The pandemic showed how disruptions in the supply chain and a lack of visibility into data impacted customer experience at the (digital) point-of-sale. According to this study, over 55% of retailers see the tangible benefits of real-time data and are aware of how the lack of it can lead to poor decision-making. In a hybrid world, retailers need comprehensive event data because all of it impacts CX—from physical and digital point-of-sale to inventory and supply-chain systems.
At the shopper level, 360-customer views such as those provided by CDPs are a starting point. Analyzing new data around ROPO, BOPIS and BORIS by comparing digital and physical sales of the same SKUs helps understand how variations in the experience, product assortment, marketing and branding experience impact conversion, said Chris Westall, senior vice president of strategy at customer experience agency Hero Digital.
Today’s value streams are concentrated on optimizing the profitability of each transaction. Tomorrow’s focus will be on maximizing the value of each customer interaction. This more lifetime-value-focused approach across multiple channels needs broader data sets to create better experiences, add new services, improve relevance, and engage and retain customers across all touchpoints, he added.
Tracking and Bridging Blind Spots in the Customer Hybrid Journey
Brands and advertisers want to go beyond fragmented channel-specific targeting and engage shoppers across their entire journey. Retailers who can help advertisers reach shoppers at offline and online touchpoints across the upper and lower stages of the buying funnel will not only be able to monetize their first-party data at a premium, but also help brands deliver more streamlined experiences across the hybrid journey.
But today, moments between the online and offline, and much of what happens in-store, can be blind spots in the hybrid customer journey. In-store blind spots can be addressed by retailers investing in cutting-edge retail media solutions that enable real-time targeting capabilities. In other words, next-gen in-store retail media that is technologically advanced enough to match the performance of online retail media, said Roger Sowerbutts, chief commercial officer at in-store shopper data platform Advertima.
Between physically being present on online or physical properties, customers are also using third-party apps to find store hours, location and navigation, peer reviews, price comparisons and stock availability.
Jennifer Shambroom, CMO at Clickatell said real-time mobile messaging is an underused opportunity—considering 46% of consumers want to receive personalized promotions for things like last-minute deals. Retailers can use mobile messaging and chat commerce to stay engaged at the in-between times, guide customers in-store when they are in physical proximity, or to specific aisles when they are in-store.
Hybrid Retail—Though Still Evolving—Is Here to Stay
Aside from retail media; multiple new factors are restructuring the economics of retail in the hybrid era. Some trends that are becoming essential elements of the hybrid retail CX include:
- Conscious consumerism—how well your brand treats the environment, employees and society.
- The growing power of customer communities, which are pivoting out of traditional loyalty programs and clubs.
- Social commerce, which is changing the dynamics of retail shopping as a group activity, both online and offline.
- The sharing and subscription economy, that is creating new operating and revenue models for retailers.
- The advent of AI, VR, IoT and the metaverse and their potential impact on the hybrid retail journey.
Layer on the continuing democratization of ecommerce platforms, easy payment gateways, price transparency, customer data privacy regulations, more accessible logistics solutions, newer delivery formats, and the ever-evolving set of channels and smart devices to shop on—and retailers can be sure that hybrid retail—however dynamic—is here to stay. The trick is to build hybrid experience frameworks that allow the brand to stay agile and responsive to changing shopper and customer needs.
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