When the UK Government imposed the closure of non-essential shops as it initiated a country-wide lockdown to contain the spread of COVID-19 along with the rest of the world for the first time ever, customers had to move to shopping online (with the exception of grocery and essentials). This led to major growth in online sales YoY, as shown by the IMRG-Capgemini Online Retail Index, which in April recorded a 10-year high (+23% YoY).
eCommerce has grown significantly not only through existing online customers but also through new types of customers moving to online for the first time, creating an opportunity for retailers to tap into and grow their customer base.
Many stores have now reopened, but UK online sales remain high.
This trend is likely to continue in the long-term, as customers have now developed a new health and safety anxieties throughout lockdown that may discourage them from visiting stores in the coming months.
Retailers need to assess the impact that these significant changes will have on the customer and the customer relationship. How can retailers stay connected to their customers and make sure they maintain trust in their brands, products and services and reset expectations for today?
We have identified three key areas where retailers should be focusing their attention in today’s highly-fluid social, economic and health-conscious environment and that will help to future-proof the customer experience coming out of lockdown: leverage data to create personalised experiences, bring the in-store experience online and improve customer relationships across multiple channels.
Leverage data to personalise experiences
Personalisation has been a dominating strategic priority for retailers over the last few years. With more consumers shifting to online, and competitors only a click away, retailers need to fully understand their customers and drive activation across the whole marketing funnel with relevant and timely messages.
Successful retailers will need to get a better understanding of their audiences and leverage insights across channels to attract and convert more consumers. To do this, they need to enrich existing first-party data (e.g. loyalty card or eCommerce data) with second and third party data (partners and agencies data) to identify and target audiences that look and behave as their existing customers (lookalike modelling), test new campaigns and predict how customers will react to specific marketing campaigns (predictive modelling). This allows retailers to leverage their capabilities to engage targeted consumers across traditional, programmatic and 1-2-1 channels, offering a truly personalised experience.
Bring the in-store experience online
Even before COVID-19, the proliferation of competitors and high-level of personalisation offered by digital-native retailers put increasing pressure on traditional retailers, resulting in underperforming stores leading to store closures.
Some retailers have responded by transforming their stores from transactional places to innovative opportunities to interact with their customers. An often-cited but still highly relevant example are Apple Stores, where customers can not only buy the latest technology, but can also try out new products and interact with Apple through attending instore events and workshops.
Since many customers will be less willing to spend time browsing in-store, retailers are now required to find new innovative ways to reach and engage with their customers elsewhere.
Lululemon, well-known for its complimentary in-store yoga classes, started offering customers free online classes as soon as lockdown began. More recently, recognising the strategic importance that remote exercise training can have on customer engagement, the retailer seized the opportunity and acquired bought Mirror, an in-home fitness company, to bolster the company’s digital offerings and offer in-home trainings.
Stores have traditionally played an essential role in customer engagement: the place where customers physically see, touch and try the products. And connecting customers with their brand through customer service via in-store staff for browsing and additional information.
In the move to the new “touchless world”, retailers will have to bring those experiences online to digitally connect as done by some retailers that have used live streaming to show products and to answer consumers’ questions.
Live streaming commerce is still small in the UK, but in China, where there are now more than 900 live-streaming site, it grew by 700% during the lockdown.
Improve customer relationships across multiple channels
COVID-19 has also put incredible pressure on the customer service offered by retailers, from order cancellations to more mundane “where is my order” requests. Now, more than ever, customers are demanding and expect retailers to cater for their individual needs and provide flexible solutions for a seamless customer experience.
In the ‘new normal’, retailers also need to aid and support customers with anxieties developed as result of prolonged lockdown. Lidl Ireland adapted to this new need by giving customers a way to find the most convenient time (avoid busy periods) to shop through its WhatsApp chatbot to find the quietest time to go shopping.
Customer requests can come from various channels: phone, email and social media, making it difficult to have a full view of the customer needs. This puts pressure on customer relationship agents who may not feel equipped with the right knowledge and tools to make decisions, leading to frustration in both retailers’ employees and customers. To service the constantly evolving customer needs, retailers need to develop a consistent view and better understanding of their customer relationships and continuously evolve these by layering in new data from interactions. Customer service agents need to be given the right cross-channel tools and agility to make decisions in order to improve performance and efficiency which will ultimately result in better customer experience, stronger customer relationships and loyalty.
In conclusion COVID-19 has profoundly changed customer behaviours, forcing companies to innovate fast and adapt to these unprecedented times. In this way, retailers need to leverage data to personalise experiences, find new ways to engage customers online and make sure they offer an excellent customer support across multiple channels.
Through our Inventive Shopping approach, Capgemini can bring together analytics, digital marketing, customer service and retail experts to help retailers to build the capabilities needed to face these challenges
Matteo Costa, Senior Consultant – Inventive Shopping (Capgemini Invent)
Matteo works with retailers, helping them to better understand and engage with their customers. With experience across CRM, loyalty design, digital marketing, insights and business cases, Matteo is able collaboratively work with his clients and help them in their transformation journeys.
Jenna Chowdhury, Consultant – Inventive Shopping (Capgemini Invent)
Jenna works with retailers to help them adopt a customer-centric approach to their customer engagement, through the use of innovative digital technologies. Jenna has experience across CRM, loyalty, digital marketing, digital transformation and operating model.