What are the stages of the Retail Customer Journey?
The 5 stages of a retail customer journey typically include Awareness, Consideration, Purchase, Experience, and Loyalty.
This stage is about capturing the customer’s attention and making them aware of your brand and offerings.
In the case of fashion retail, a potential customer might come across an online ad showcasing trendy clothing and accessories from a specific brand while browsing social media.
In grocery retail, a customer might see a TV commercial highlighting a supermarket’s fresh produce and competitive prices.
At this stage, the customer shows interest and begins evaluating different options.
In fashion retail, the customer might visit the brand’s website to explore the product range, read customer reviews, and compare prices.
In grocery retail, a customer might research different supermarkets, considering factors such as location, product selection, and deals.
This stage involves the customer making the final decision to purchase a product.
In fashion retail, the customer might add desired items to their online shopping cart and proceed to checkout.
In grocery retail, the customer may visit the chosen supermarket, select the desired groceries, and complete the transaction at the checkout counter.
After the purchase, the customer’s experience and satisfaction become crucial.
In fashion retail, the customer may receive an order confirmation email and subsequent shipping updates. Upon receiving the package, they may try on the clothes and assess their fit and quality.
In grocery retail, the customer may assess the freshness and quality of the purchased items and evaluate the overall shopping experience.
This stage focuses on building customer loyalty and transforming them into advocates for your brand.
In fashion retail, a satisfied customer may leave a positive review, recommend the brand to friends, or post pictures wearing the purchased items on social media.
In grocery retail, a loyal customer may join a loyalty program, provide feedback, or share positive experiences with others, driving word-of-mouth recommendations.
An example of customer journey in Fashion Retail:
- Awareness: A fashion-conscious individual scrolling through their Instagram feed comes across an ad for a trendy clothing brand showcasing stylish outfits.
- Consideration: Intrigued, they visit the brand’s website, browse through different collections, read reviews, and compare prices with other similar brands.
- Purchase: After selecting the desired items, they add them to their online shopping cart and complete the purchase by providing payment and shipping information.
- Experience: They eagerly await the package, which arrives a few days later. Upon trying on the clothes, they find that they fit perfectly and are impressed with the quality.
- Loyalty: Delighted with their purchase, they leave a positive review on the brand’s website, share pictures of their outfits on social media, and recommend the brand to their fashion-forward friends.
An example of customer journey in Grocery Retail:
- Awareness: A person sees a TV commercial highlighting a supermarket’s extensive range of fresh produce, affordable prices, and convenient locations.
- Consideration: Intrigued by the commercial, they research the supermarket’s offerings, compare it with other nearby options, and read online reviews to assess the quality and selection of groceries.
- Purchase: They decide to visit the supermarket, select the desired groceries, and proceed to the checkout counter to complete the transaction.
- Experience: Upon reaching home, they assess the freshness and quality of the purchased items, check if all items are as expected, and evaluate the overall shopping experience.
- Loyalty: Impressed with the supermarket’s wide range of products, competitive prices, and pleasant shopping experience, they join the loyalty program, provide feedback on their experience, and recommend the supermarket to friends and family.
Here’s where it gets interesting: TOP customers deliver PROFITS
McCarthy and Winer also researched the profitability of their top customer segments. They found the top 20% of customers generated 105 to 113% of net income.
You might wonder how a small group of customers could be worth more that 100% of net income.
This is possible because not every customer is profitable. The customers who are highly profitable compensate for the customers who are served at a loss.
The power of customer retention through loyalty programs is amplified when considering research from Bain & Co., which showed that when companies improve their customer retention rate by as little as 5%, they see an increase in profit of 25 to 95%.
In other words, if you motivate just 5% more of your customers to stick with you, your profits can jump considerably.
How to influence the Retail Customer Journey?
Let’s look at 5 specific strategies to influence the customer journey
Find high-impact moments in the retail customer journey
We are talking about those “moments that matter”, the specific interactions that trigger a customers’ feelings and leave lasting impressions.
To identify high-impact moments, a retailer needs to map out the full customer journey with the various touchpoints, and only then highlight those that really matter most. In reality, not every touchpoint and every experience is as impactful as others in creating healthy and long-lasting relationships.
Consider the Peak-End Rule, which states the following:
The typical consumer’s memory of a customer experience is not the average of all moments but the feelings they experienced at the peak moment and at the end of the interaction.
High-impact moments often include:
- Delighting an unsatisfied customer with top level customer service. More often than not, servicing an angry or frustrated customer will turn dissatisfaction into an experience that well exceeds his or her expectations and will multiply the LTV manyfold.
- Finding the product they are looking for with speed and easy.
- Experiencing a moment of surprise and delight.
- Involving the senses.
Starbucks began a new effort called the Starbucks Reserve Roastery and Tasting Room which lets customers chat with coffee specialists, watch coffee brew from fresh beans, and try a variety of rare coffees.
What we like about Starbucks’ multi-sensory experience: This is a multi-sensory experience that takes customers to the next level. They feel like an active part of the Starbucks journey and are getting an inside look into the company’s product development process. It’s something exciting and unique that further engages customers and gives them a new appreciation for the brand beyond the same coffee every morning.
Recognize and celebrate your loyal customers
Everyone likes to feel appreciated and recognized. Your customers play an essential role in the success of your business, and they want to know that you appreciate them.
- A simple “Thank you” goes a long way! Many shops on Amazon and Etsy deliver heartfelt notes of gratitude after every purchase. This is a way to reach across the impersonal eCommerce barrier and remind them that there’s a grateful human on the other side.
- In our last webinar, Forrester VP and Principal Analyst shared the amazing example of Chewy.com, the online pet shop. Chewy.com has lifelong customers because they take customer appreciation seriously. They’re known for sending holiday cards, housewarming gifts and even handmade paintings of customers’ pets!
- Show what you stand for. Shoppers are looking to connect with society by supporting businesses that campaign for mutual causes. In fact, Google reports that 46% of shoppers say that they make a conscious effort to shop at businesses that align with their values. With this in mind, retailers should take the opportunity to engage their customers with messages that promote a good cause. Because people want to support good causes, they’ll seek out retailers that can fulfill that mission. Be sure to communicate on your website, social media, email, and in-store signage about your commitment to the cause—and pick one that resonates with both you and your target customer
Leverage personalized recommendations based on customer data:
Customer data includes info about each interaction with your brand, shops and products. As you know, not all customers are the same, and some are more valuable to your business than others.
Personalization is a powerful tool for influencing the retail customer journey. According to a study by Accenture, 91% of consumers are more likely to shop with brands that provide relevant offers and recommendations. Utilize customer data such as browsing history, purchase behavior, and demographics to deliver personalized product recommendations.
The way to understand the value of your current customer base and predict the value of new customers inevitably includes crunching your data. This is not info you can take from industry benchmarks, competitors or companies in your same space.
A customer data infrastructure is mandatory to enable business across multiple departments. By using a CDP with retail-specific use cases you will be able to collect, cleanse, enrich, store and activate data from all online and offline sources and create a single, automated and updated Source of Truth that empower your marketing, product, IT, sales and operations.
As a result of optimizing their data strategy, one of our clients increased 22% the average ticket spend, and another client identified 40% of their customers 3 weeks after launching their loyalty program.Javier Fernández, CTO and co-founder at Loyal Guru
Personalization requires you to segment your customer lists to avoid sending generic spam-like messages, offering irrelevant deals or advertising a product a customer already purchased.
A marketing automation platform can help you easily segment your customers into relevant categories based on demographics, purchase history, interests and other factors.
These segments allow you to follow up with communication and offers that are compelling and relevant.
These would be a couple of practical examples:
- Give personalized product recommendations
- If a preferred product is out of stock, show similar products
- Upsell a more premium version of the product
- Cross-sell an accessory related to the product
- Show popular items available on your shop now
- Send out reminders to regular shoppers.
As and example, Thread sends personalized emails, signed by it’s Lead Stylist, suggestion fashion items that will most certainly appeal to specific clients:
Create a seamless omnichannel experience:
Providing a seamless omnichannel experience is essential for influencing the customer journey. A study by Google found that 85% of online shoppers start a purchase on one device and finish it on another. Ensure consistent branding, messaging, and user experience across all channels to create a cohesive journey. For instance, Starbucks offers a seamless experience by allowing customers to order and pay through their mobile app, pick up their order in-store, and earn loyalty rewards, regardless of the channel they use.
Imagine your client is trying to buy 2 blue shirts on your online store and he gets a message that his selected size is out of stock. At the same time, he is prompted to go to the physical store where he can purchase these items immediately.
That doesn’t make sense in today’s day and age, and it doesn’t make your customer happy!
The concept of omnichannel implies that customers can access your products and services on any platform, device, or channel. So as new channels are introduced, and customers begin using those channels, there’s an expectation that brands integrate accordingly.
Today, technology allows leading retailers to make all product stock available to clients, with no distinction of the channel he is using.
Why is so significant?
Data shows that reducing the number of steps in your customers’ shopping journey increases the average spend. Shifting the orientation toward decision simplicity and helping consumers easily and confidently complete the purchase journey has a profound impact on customer experience, and also in revenue.
Once your business starts to harness the power of data, communication will play a large role in leveraging growth opportunities. Having a Customer Data Platform with a single customer view and integrated marketing features will allow you to reach out to your customers via email, push notifications or SMS to let them know of the promotions that will best convert.
Sephora Beauty Insiders can tap into the Beauty Bag on their phone or desktop and have access to a truckload of data. Consumers can shop, see their favorites list, view past purchases and rewards points, scan items in-store to see other options available online, watch tutorial videos, and locate stores near them.This extremely successful application of omnichannel retail strategy has nurtured 11 million members, who spend 15 times more money on Sephora.com than the average user.
How to start influencing the retail customer journey?
Collect data from all sources
Start by collecting the right data, analyzing that data to determine preferences, taking an omnichannel approach to your data ecosystem and customizing your promotions, discounts and coupons. Sounds like a lot of work? Don’t sweat. Technology helps you get this done with barely any resources from your team.
Make it easy for your customers to weigh options and take decisions.
To help consumers evaluate choices, most brands describe their differentiating features and benefits. Some go a step further, offering buying guides containing side-by-side brand or product comparisons. Reduce the overwhelm of too much information or too many options.
Recognize your customers’ expression of those values in different ways.
Your most loyal customers love your products, but they probably also love what your brand represents. Whether you are pushing forward values like coolness, health, aspiration, luxury, comfort, diversity or others, those are ideas your top customers will connect with.
As an example, you can let your customers support a chosen cause and donate their loyalty points or send his or her unused coupons to their favorite charity. This helps your customers do good and feel good and encourages positive word-of-mouth for your loyalty program.
Top customers are ultra-valuable, so it would make sense that retailers makes every effort to engage customers in meaningful ways, beyond a product-centric transactional relationship.
Still, many retail leaders undercut the value of emotional connection as a lever for customer loyalty. Some see emotion as the opposite of data. They think “data-driven” is always the best approach. But research shows that emotional connection is essential for building relationships.
These days, it’s just not enough to generate affinity, either it is not enough to sell great products, and it is not enough to deliver good customer experience.
Retailers need consistent systems to cultivate long-term customer loyalty. These systems include:
- Crafting authentic experiences that make customers feel appreciated by the company (beyond the purchase)
- Quantifying customers’ lifetime value and identifying groups of customers who are most profitable
- Expanding the relationship beyond the physical store so customers could also engage (and feel appreciated) when they are not there
- Training the team consistently so they are on board with the company’s loyalty initiatives.
- Analyzing key metrics to track initiatives for continuous long-term improvement
These techniques make a difference. The value of the average customer will shoot up. Customer referral rates will skyrocket. Although loyal customers are a small subset of retailers’ overall customer base, their value vastly exceeds their numbers. Customer engagement is the holy grail of retail profitability.
If you’re a retailer and you’d like to talk about any of the customer engagement strategies outlined in this article in more detail, then get in touch our team – we’ll be happy to show you examples or talk through your brand’s unique challenges.