How Should Retailers Tackle the Shift in Consumer Preferences in Providing Exceptional CX?

I read an article on changing consumer behavior and expectations in the retail space. This article in Retail Customer Experience spoke extensively about the shift that retailers must adapt themselves to.

This article also spoke about the CX challenge-solution framework, where it addressed five challenges. However, I found these four challenges to be significant:

• Understanding what matters most to your customers
• Leveraging data to predict trends
• Deploying AI and technology thoughtfully
• Balancing personalization with privacy

These challenges are real. In this article, I have looked at the challenges and the possible solutions. Besides, I have also mentioned the activities that retailers should look at and what they should guard against.

Understanding What Matters to Your Customers

A clothing retailer finds that their customers are frequently abandoning carts online. However, they are unsure of why this is happening.

• Are the prices too high?
• Is the checkout process too long or too complicated?
• Are there too many options for them to choose while making the payment?
• Do customers want more product options?

How do you figure out what the real problem is?

CX Solution – Customer Feedback Loop

The retailer should consider implementing a customer feedback loop via post-abandonment surveys, chatbots, or email follow-ups.

You can even throw in offers for them to revisit their cart and go ahead with the purchase.

I get this message from my water supplier: Your cart looks good, and you will get an additional 10% off on your purchase if you click on this link and complete the purchase today. Water is essential, and that makes me click and finish the purchase.

In-store is fairly easy, and you can interview customers at checkout to understand their pain points in the shopping process.

What Activities Should Be a Part of Your Routine?

• Look at the customer journey mapping to understand the friction points – both online and offline.
• Deploy user-friendly tools for customer feedback, such as pop-up surveys on the website or automated follow-up emails after an abandoned cart.
• Analyze feedback to adjust pricing, inventory, and the checkout process.

However, you should guard against ignoring silent customers – most customers won’t voice out their frustration. They simply move away. You should use a combination of active and passive data collection to understand customer behaviors. E.g., you should analyze click patterns.

Also, do not overload customers with surveys. Don’t fall into the trap of asking too many questions or making feedback mandatory.

Leveraging Data to Predict Trends

A beauty retailer sees a spike in sales for eco-friendly products but isn’t sure whether this is a passing trend or a long-term shift.

Given this context, how do they plan their product lines?

CX Solution – Predictive Analytics

Leverage predictive analytics to understand customer purchase data, feedback, and industry reports to forecast future trends in eco-conscious shopping.

What Activities Should Be Part of Your Routine?

• Integrate historical purchase data with broader industry trends to predict product demand.
• Monitor real-time analytics and adjust product offerings and promotional campaigns dynamically.
• Segment customers who are likely to embrace eco-friendly products and target them with personalized recommendations.

However, you should guard yourself against relying too much on current data and not taking into account external factors like economic downturns and supply chain issues. This will lead to overstocking or understocking products.

Also, keep yourself flexible to act on trends quickly.

Deploying AI and Technology Thoughtfully

A home goods retailer implements a chatbot to answer customer queries, but customers become quickly frustrated with the bot’s limited capabilities. It can’t handle complex questions and frequently directs them to live agents, which adds to their wait time.

CX Solution – Human-AI Collaboration

The retailer should adopt a hybrid approach, where AI handles all the routine and mundane questions like order tracking, store locations, store timings, etc., whereas it seamlessly directs any other query to a human agent.

What Activities Should Be a Part of Your Routine?

• Monitor chatbot performance and continuously refine its capabilities based on real customer interactions.
• Train agents to take over from AI at the right point, ensuring a smooth handoff without repetition.
• Implement AI-powered customer service that continuously learns from customer interactions and gets better over time.

Ensure that you are not fully automating your customer service with AI, as customers may quickly get frustrated and feel undervalued.

Balancing Personalization With Privacy

A fashion retailer uses personalization to recommend products based on browsing history and past purchases. However, customers started expressing concerns about how much the retailer seemed to know about them, with some opting out of these personalized suggestions completely.

CX Solution – Transparent Personalization

The retailer should ensure that personalization is transparent and consent-driven, giving customers full control over their data. Customers should be able to opt in and opt out of personalized experiences easily.

What Activities Should Be a Part of Your Routine?

• Educate customers on how their data is used to improve their experience and allow them to update their preferences at any time.
• Implement clear and easy-to-understand data privacy policies with explicit consent prompts.
• Provide customization options that allow customers to choose how much data they share.

However, be mindful of how much data is collected and ensure it’s used in ways that genuinely benefit the customer.

Staying customer-centric is a balancing act, and it is the secret that makes customers come back to you again and again.

Comedian David Sedaris famously said, “ Customer service, I’ve decided, is the new marketing.” Obviously, how you treat your customers says more about your brand than any snazzy ad campaign ever could.

Zig Ziglar famously quipped, “You don’t build a business – you build people, and then people build the business.” The people include customers, your team, technology, and processes – all working together in harmony to create delightful experiences.

So, as retailers, the best thing for you to do would be to keep it real, keep it human, and keep it fun.