During the holiday season, shoppers often find themselves overwhelmed with brand marketing messages.
The retail industry is undergoing transformational change in 2020. An increasingly digital-first customer journey became accelerated when retail outlets were forced to close their doors – at least temporarily, and several iconic retail brands filed for bankruptcy protection, with J. Crew, Brooks Brothers, Neiman Marcus, JC Penney and Pier 1 Imports among them.
Approaching the tail end of 2020, many retailers are pinning their hopes of long-term sustainability on strong holiday sales, already an uphill climb with high unemployment, economic uncertainty and – for stores that are still open – many instances of reduced hours or capacity. Time is already running out to flip the switch on a dismal year; according to a National Retail Federation survey from last year, more than half (56%) of consumers said they had started holiday shopping by the first week of November.
To get a sense of what the 2020 holiday shopper expects from brands, Redpoint Global surveyed 1,000 U.S. consumers via Dynata Research. Results indicate that brands that effectively use customer data to create a personalized customer experience across all channels may have a built-in advantage over the digital laggards.
Personalize or Perish
In the survey, 70% of consumers said they will exclusively shop with brands this holiday season that can demonstrate they personally understand them. This means a brand must do three things:
1) consistently identify an individual customer even if they use multiple channels;
2) knows all that is knowable about a consumer, e.g. link preferences, behaviors, transactions, demographics into a single customer view; and
3) can provide personally relevant experiences that reflect the cadence of the customer’s journey, which is accelerating in speed.
The consumer expectation for a personal understanding means that a consumer browsing a landing page for hiking boots will at the very least expect recommendations that reflect the customer’s size, style and color preferences from previous in-store or online visits. The customer may also expect the brand to use browsing history from that one visit to personalize the next – influencing what the customer sees, the offers they receive or an abandoned shopping cart reminder for the boots.
Nearly half of consumers surveyed (49%) said that they will be more likely to purchase from retailers who send personalized content and/or offers this holiday season, a strong indication that personalization motivates purchases. Examples of personalized content are not restricted to relevant offers, but may also include a thank you email or SMS, product instructional guides, or a brand showing that it shares the customer’s sustainability values.
The survey underscored that for today’s digitally-savvy consumer, being understood by a brand is becoming a differentiator. A majority of 82% of respondents voiced the expectation that retailers will be able to accommodate their preferences and expectations, and that brands that get it right will be rewarded.
Cadence of the Customer
The ability for a brand to deliver a real time, personalized CX at the cadence of the customer is vital. Real time, in this context, means that a brand must be ready with a relevant interaction the moment a customer appears in a channel.
Being too late – or too early – is the result of fragmented systems of engagement or data siloes that fail to provide a brand with an updated single view of the customer. A persistently updated single view, or Golden Record, is the basis for a seamless, personalized CX because it takes into account everything there is to know about a customer – up to and including behaviors, transactions and preferences across all devices and all channels, in real time.
A golden record helps retailers manage the cadence and personalization across channels by providing the deep understanding of individual customers that is needed to hyper-personalize messages, offers and actions. It is the key to closing the gap between customer expectations and the actual experience a brand delivers.
Friction Breeds Frustration
A single view is paramount for meeting the expectation for consistency. Two-thirds of survey respondents said they want retailers to make personalization consistent and without friction – regardless of channel. This requires a brand is ready with a next-best action or offer at any moment on any channel that accounts for the customer’s behavior up to that second. Without an updated customer profile, CX failures are all too common, such as sending an offer for 10% off a product the customer may have just paid full price for.
Unfortunately, that is not an outlier. In the survey, consumers indicated that receipt of irrelevant offers is their top frustration. Sending the right offer at the cadence of the customer helps alleviate another frustration, which is simply being overwhelmed by marketers during the holiday season (39%).
Out of stock items was voiced as another major point of friction in the survey (36%), highlighting the need for retailers to be fully transparent in communication around delays, managing customer expectations and speed in response.
With curbside pick-up an increasingly attractive option for the retail consumer, managing inventory becomes that much more of a critical capability this holiday season. If a customer buys online and arranges for a curbside pickup, inventory management between the ecommerce site and the physical store is a vital part of a customer’s end-to-end digital and physical journey.
In fact, half of consumers surveyed said they will take advantage of either curbside pickup or buy online, pick-up in-store services this holiday season, with 62% of consumers saying they will shop exclusively online this year.
Combat Instability with a Personalized CX
Providing a seamless end-to-end experience becomes more important this year with an expected drop in overall holiday spending, with 27% of those surveyed said they will spend less due to economic uncertainty.
Heightened competition coupled with anxious consumers and a deepening expectation for a personalized omnichannel CX make it an imperative for retailers to use real-time customer data to understand individual consumer preferences. Those that develop a true understanding of a customer’s needs and wants will be much more successful in securing consumer spend this holiday season.