What does Customer Engagement Look Like in the Post COVID-19 Retail Reality?

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by Grant Gustafson on 06-11-20

In the final part of a four-part Blog Series, Grant Gustafson, our Retail Consultant from the ShopperTrak North America team, discusses what Customer Engagement could look like in the “new reality:”

Engaging Customers in the New Reality 

Early in my career a mentor would routinely remind me, “retail is about people.” As I grew as an operator, my perspective on this advice evolved. I came to believe, and still believe, that great retailing is about enabling your people to take care of customers. In the post-COVID era this advice has never been more important.

Consider this – retailers are deploying technology and committing precious labor hours to limit occupancy, ensuring adherence to government mandated guidelines. Others have installed signage to encourage social distancing guidelines and direct the flow of customer traffic. Extra steps are being taken to clean and sanitize customer touch points. Self-checkouts are replacing traditional check-out lanes and, where they still exist, plexiglass partitions limit customer and employee interaction. As retailers modify their operations to re-open stores and invite shopper back into showrooms, the way in which they engage customers meaningfully will be changed forever. These operational changes are being implemented to promote the health and safety for customers and associates alike. However, all of this begs the question, “With new measures limiting customer interaction, how will retailers enable their people to engage with their customer?”

Creating Human Connections Digitally

Prior to COVID-19 many brands adopted experiential retail as a pathway to customer loyalty and increased sales. With most non-essential stores not quite fully reopened, retailers are finding innovative ways to digitally engage with their customers online. Social media platforms offer ways to start the conversation. We’ve seen numerous examples of where retailers are serving up styling advice to offering cooking or fitness classes as a way to connect and engage with brand loyalists. Activewear brand Vouri’s CEO, Jack Kudla, recently outlined his vision for how his organization planned to leverage Instagram to connect with their existing followers while also growing this base. Kudla views their digital efforts as a way to better understand a new audience, “The biggest datas point we want to understand concern who our audience is and if we can convert them to customers.” Other retailers are instantly connecting with customers by adopting live streaming video chats with local store employees. These live sessions provide the customer the chance the connect with someone from the brand, browse the newest assortment, and get any of their questions answered. Sephora and West Elm have created Zoom backgrounds, enabling customers to act as digital billboards for their favorite brands.

Reshaping the In-Store Experience

New traffic trends are quickly emerging across both essential and non-essential retail. As more stores reopen, early data suggest limited shopping hours, working from home, and safety concerns are influencing customer traffic patterns. These new trends were addressed in our most recent blog. These changes are causing retailers to rethink how they engage and communicate with their in-store customers as they emerge beyond BOPIS and Curbside Pick-up. To help drive revenue and optimize labor, while also limiting occupancy and operating hours, some high touch/ high service retailers are embracing an appointment based selling model. In a recent CNBC interview, Best Buy CEO, Corie Berry, articulates their decision to initially move forward with an appointment-based selling model, “the approach is a safer way to serve customers, the personalized sales experience is a better fit for the retailer. She went on to say, “when customers come in for their appointment, they get tailored one-on-one service.”

Other retailers have taken steps to communicate their traffic patterns with customers. Customers empowered with this data are able to make more informed decisions about when and where to shop.   Traffic data is also being used to optimize store hours by customer segment. Promoting dedicated hours for seniors or frontline workers during slower period of day delivers two benefits. Retailers are able to more evenly spread traffic throughout the day, allowing the retailer to invest their labor expense more efficiently. The retailer also experiences the benefit of an improved overall customer experience, increasing the customer’s lifetime value.

Operating with Transparency

Throughout this blog series we’ve outlined some wholesale changes to the way stores are traditionally operated. Most of these changes will impact your customers. The changes may be welcome because the customer believes they are for their benefit. The key word there is “believes.” Shoppers need more than belief; they need assurance that the implemented changes are for their benefit. The best way to accomplish this is to talk them as a partner and over communicate these changes to your customer.

The first question to be answered is “who is accountable for communicating these changes?” The short answer is everyone, but that answer doesn’t generally lead to a good action plan. Let’s start with the fact that the store team is on the front lines, most likely in the best position to have these conversations.   The sales and support teams need to be fully trained and aware of the new rules of engagement.  Furthermore, the team needs to model the correct behaviors. If facial masks are expected to be worn by everyone then the team must understand their role by complying with that standard. When they express confidence, your customers will quickly follow. Many retailers have moved to posting the updated rules of engagement at the door. Doing this in a conspicuous location in an easy to read format will go a long way.

We’ve heard other good examples from some of ShopperTrak’s clients. For one of our clients, the occupancy limits required customers to form a line outside the store. When this happens, an associate is placed outside with the customers. His/her sole responsibility is to give the customer an advanced notice of what to expect; for instance, the fitting rooms are closed for the time being.

Measuring Success

Unlike many retail KPI’s, the methodologies for measuring the voice of the customer is anything but constant. Sometimes I feel like I’ve seen every possible solution over my 15+ years in retail.  As we emerge from the current crisis, retailers will be once again required to rethink how to measure the customer experience. Traditional revenue metrics such as Same-Store Sales or Sales per Square foot give little insight into customer relationship. Traffic-centric metrics, however, like Shopper to Associate Ratio (STAR) and Sales per Shopper (SPS) account for the true selling opportunity.

Beyond selling or traffic KPI’s, most retailers rely on some form of customer survey, such as a Net Promoter Score, to help them better understand the voice of the customer. Considering the required changes to operating models, the surveyed questions may no longer address the current shopping environment. Retailers now should consider tailoring questions to gage how their adapting to the inevitable changes. Questions like “Did you feel like your health and safety was a priority while picking up your order?” or “Did we offer an appointment time that met your needs?”

This Blog Series:  What Does it All Mean?

Hopefully if you’re still reading, you’ve taken the time to read all four parts of this blog series, but perhaps still wondering “So what now?”

Let’s take a moment to understand where the customer is in all of this. Frankly, without her (or him), we don’t have any stores. To do this, I’d like to point to a recent survey conducted by McKinsey & Co., which measures various aspects of consumer confidence. There are two questions that get at the heart of how our customers are feeling right about now:

  1. How long do you believe you will need to adjust your routines before things return to normal?
  2. How long do you believe your personal household finances will be impacted by the COVID-19 situation?
What does Customer Engagement Look Like in Retail’s New Reality?

It is important to understand that 91% of those surveyed in the United States that believe their routines will be disrupted for a minimum of two months, with some indicating more than a year. Having said that, 72% of the respondents believe their personal finances will be impacted for a minimum of two months with 53% expressing concern their finances will be impacted for more than of four months.

For me, there is a clear takeaway from a holistic view of the data we’ve just looked at: the consumer needs assurances more than ever before. Think about it: we, as retailers, are all searching for that “new reality,” right?  The shopper is also looking to understand the definition of “new reality” and going to be doing it will less financial confidence.

Our key takeaways:

  • Shoppers will continue to determine their own personal timeline for their return to normalcy.
  • Consumer confidence will be rebuilt over time, limited by economic realities and concerns over social distancing.
  • Providing a clean, safe and operationally efficient shopping environment is not table stakes.
  • When the consumer is choosing to shop is evolving and will continue to do so. These changes need to be continuously considered.
  • The service model must adapt to the changing demands of the consumer.
  • Allocating labor to transaction history is a thing of the past. Traffic must become the new proxy.
  • Consumer adoption of alternative channels such as BOPIS has been accelerated. Are you keeping pace?
  • Engaging with customers is as important as ever; but has become more challenging than ever.  Digital connections must be a priority.
  • Consider your customer a business partner and communicate changes with transparency.
  • Finally – Measure for success, then do it again.

Click here to read the previous blogs in the series.

Read more posts by Grant Gustafson