Technology enables a customer-centric approach in retail

Technology enables a customer-centric approach in retail
Sep 25, 2020

COVID-19 has brought major challenges for the retail industry, but one bright spot has been the arrival of new technology to meet evolving consumer needs.

It will come as no surprise that the COVID-19 crisis has shaken the already troubled retail industry to its core over the past several months. But the challenges of the crisis have paved way for technology to take on an outsized role in the customer-brand relationship, playing a fundamental role in the evolution of retail.

The same trends that retailers were talking about over the past few years are very much present today: ease, convenience, digitalization. The difference is that there wasn’t a dire need to shift—and shift quickly. COVID-19 has required retailers to think innovatively, implement new technologies and processes to meet new customer expectations, and become comfortable with releasing a minimal viable product if it means getting something into the market quickly.

Above all, two trends come to mind when looking at the retail industry as a whole: (1) bringing ease and convenience to in-store experiences and (2) leveraging digitalization to supplement in-store shopping.

Bringing ease and convenience in-store

For some, going into a store has now become a “is it dire or not?” decision. When in-store, the personal connection you make with an associate or taking time to browse has become a low priority part of the experience. Costumers are more interested in getting their questions answered quickly, getting what they need, and getting out of the store. Ease and convenience to help facilitate these new needs are of utmost importance.

Here are a few ways brands around the world are delivering these experiences:

  • Wayfinding systems, which are used by stores like Home Depot and Target, are helping reduce a customer’s time in the store by navigating them to the aisle where their product is located. Some wayfinding systems, like SIRL, can navigate you within 12 inches of the product and provide optimized routes based on your shopping list.
  • UK-based Sainsbury’s is testing a virtual queuing system to allow customers to wait in a digital queue until it is their turn to enter the supermarket.
  • Beauty giant Lancôme opened a pop-up a virtual experience store in Singapore that will provide a 3D shopping experience for customers through artificial intelligence-powered skin consultations.

Leveraging digitalization to supplement in-store

Pre-COVID, retailers were heavily focused on becoming experiential, particularly in-store. According to the Mintel Global COVID-19 tracker (June 2020), 59% of customers are trying to limit the amount of time they spend in-store. Therefore, brands and retailers have to think differently about how they engage their customers or prospects and deliver value.

Brands are investing in digital experiences to make it easy for customers to get what they need. A few examples:

  • With home improvement projects on the rise during lockdowns, Lowes began offering virtual consultations through augmented video chat tools to interact with homeowners and business clients. This service is currently being offered for free through October 31.
  • For beauty brands, consideration of new products and trial occurs most often in-store. With traffic in stores down, brands are leaning on a more direct-to-consumer approach. Starting October 1 in France, Clarins will begin offering a subscription-free, beauty box service which includes full & travel-sized products, a beauty guide and beauty accessory.
  • Brands are investing in digital experiences to make it easy for customers who shop online to get what they need. Target was the first to begin using Instagram Checkout, which allows consumers to instantly shop for every product they discover on Instagram with the click of a button.

It's crucial that retailers find ways to connect and build loyalty with their customers both in-store and out-of-store. Brands are showing that experiences and experiential retail don’t necessarily have to be in-person, and digitalization has helped customers engage with brands in new ways. At the same time—by furthering ease and convenience during in-store shopping experiences—a brand shows its investment and builds trust amongst its customers.

Investment and trust are two of the core components that foster long-term advocacy on the brand-customer continuum, and two key loyalty drivers identified in our research on building and scaling emotional loyalty. The work retailers around the globe were undergoing before the pandemic to win the hearts and minds of customers hasn’t stopped. Rather, technology’s role has not only picked up pace, it’s now arguably the backbone of the customer experience more than ever.

ICF’s global marketing services agency focuses on helping your organization find opportunity in disruption.
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