The growth of retail in the business landscape is nothing new. However, many challenges and opportunities still exist for entrepreneurs and professionals working in this segment.
It's undeniable that the way people choose and buy their products has changed a lot in recent years – and the retail sector is no different. Direct contact with the customer forces the sector to constantly reinvent and innovate.
With that in mind, we decided to study retail in depth and develop this basic guide with plenty of content for you to apply to your business. Let's go?
Exploring Retail
Retail is a highly competitive market , and because it focuses entirely on the end consumer, it requires continuous and direct service. Companies in this segment need to be constantly aware of changes affecting the needs of their target audience, capturing these trends to transform them into a positive customer experience.
Companies that become complacent lose significant market share due to intense competition. Therefore, if your company doesn't meet the minimum requirements, consumers will spend their money elsewhere – and that's not what you want.
One of the points frequently mentioned here at Harmo is the customer experience. This concept is used as a means to achieve certain objectives, such as customer loyalty and building trust so that they recommend your brand to others.
To achieve this, there are numerous ways to understand consumer behavior. From analyzing purchase data, website or social media visits, to advanced neuromarketing. It all depends on the size of your business, your objectives, and your budget.
Listening to the customer is very important for retail, because by solving the problem of one specific customer, you may be helping other customers with the same difficulty.
One case cited by Kotler in his book " Marketing Management " is that of the 3M company , in which he claims that more than two-thirds of its ideas for improving products and services arose from customer complaints .
This highlights another important factor: simply listening to customer feedback is not enough. Actions for improvement must be taken.
By creating a direct channel with your target audience, you will gain insights into how consumers research or purchase products, and you will also learn what factors influence the buyer's decision.
Tips for improving the customer experience
Step 1: Feedback
Customer feedback is extremely important to your company. Besides indicating areas for improvement, it can also generate insights for your operations. The best surveys are short, with a maximum of 6 questions.
In this way, there isn't enough time for the customer to get bored, and your chances of engaging the clientele increase.
Step 2: Empathy
I bet you have opinions about the products and services you use, right? Putting yourself in your customer's shoes will give you a new perspective on how they think about your product, and you'll also see how communication with your store works for them.
Lack of communication between company and consumer can create problems, since the target audience needs to feel important. Furthermore, by taking customer opinions into account, it will be possible to create increasingly personalized customer service.
For example, when you visit a store and the salesperson calls you by name, that's very personalized service, isn't it?
Step 3: Agility
On the other hand, it's very uncomfortable to arrive at an establishment and not have anyone serve you, isn't it?
Perhaps you're having a busy or stressful day, and waiting for service is the last thing you want right now.
customer service is a key differentiator that will make customers like your storeand significantly increase the chances of them doing business with your company again.
Step 4: Customer Service
This sector is the front line of your business, so it's crucial that they are in perfect harmony. The people who make up the customer service area are the face of the company, as they are the customer's first point of contact in your store.
Therefore, good customer service is essential for businesses that intend to last for generations and maintain high visibility. Furthermore, over time, your service representatives can develop a baseline of customer satisfaction .
With these tips, you will not only improve your sales, but also gain more customers. This will allow you to grow intelligently, that is, in a way that makes your brand stronger in the market.
Point-of-sale service
Companies that excel in retail sales understand the importance of customer service at the POS ) to delight and retain customers.
It's no use having an attractive store layout, or even low prices, if the customer isn't well served and leaves with a bad impression of the store.
In addition to never returning to the establishment, the dissatisfied customer may also make negative comments about the brand to their acquaintances, either through conversation or on social media.
Whether at a point of sale or in e-commerce, personalized service is increasingly valued by consumers.
In the case of a physical store, the salesperson should be available to the customer and act as a kind of consultant, recommending the products or services that best meet the customer's needs. And the establishment should provide the customer with a pleasant shopping experience, so that they feel motivated to do business with you again.
E-commerce customer service
With increasing access to social networks and websites, online shopping has also evolved significantly. After adapting to the virtual world, stores face the challenge of keeping up with mobile to deliver a good browsing experience to their customers.
When making a purchase or conducting a search, users want to exert as little effort as possible, especially those using mobile devices.
Therefore, it is crucial that retail companies develop tools to obtain this user feedback and understand the areas they need to optimize/improve
Be where your customer is
It is impossible today to think of retail simply as a collection of physical stores where customers go every time they need to buy a product.
With new technologies, omnichannel retail is gaining more and more ground, requiring retailers to make a greater effort to attract customers and take advantage of opportunities.
Today, consumers compare prices on their computers, access store apps, or make purchases via mobile phone, and even research inside physical stores. The way we consume has changed, and these consumers demand that brands adapt to their habits and customs.
To give you an idea of the importance of combining online and offline experiences, a Google study confirms that 3 out of 4 consumers who find retail information obtained through web searches useful are more likely to visit a physical store.
We then observe that this behavior increases the consumer's decision-making power, since they have all the necessary information to negotiate the best deals. Thus, the bargaining power rests entirely in the customer's hands.
So, you need to find the communication channels your target audience uses most and establish a presence there as well. For example, if your customer uses Facebook and Instagram, create pages for your brand on these networks, make posts , and create valuable content for the viewer.
By doing this, you will create a much closer and more personal communication channel with your customer, generate more empathy, and your brand will gain increasing authority with consumers.
Experience at every point of the journey
Today's consumers, especially younger ones, demand a more focused in-store experience and shop with a select group of retailers who meet their expectations.
A good way to start analyzing the experience with fresh eyes is to collect feedback on customer opinions after the purchase.
Companies like Uber are able to do this effectively, using a star and tag where each user rates the driver after the ride. Because it's simple, this model has high response rates and allows for the automatic generation of reports, saving time from other activities.
Another interesting aspect of the customer experience that Uber utilizes is the various integrations and partnerships the company has with other services. For example, it's possible to request rides and get trip information without having to open the app, making life easier and faster for the customer.
So, for your business to stand out and stay ahead of the competition, invest in selling experiences. Discounts are great, but they work as a short-term strategy. When you improve the customer experience, you can gain fans for your brand, thus leaving much less room for competition.
Sales strategies to build customer loyalty
So, after you get to know your target audience and understand customer experience, let's talk a little about personalized sales strategies.
Let's discuss Cross-Selling and Up-Selling in a very practical and straightforward way, and what has allowed companies like Amazon and McDonald's to sell significantly more. So let's go…
Cross-selling
Cross -selling occurs when your customer has already entered your establishment and chosen what they want to buy. After the customer purchases a product from your company, the salesperson offers an "additional" item related to the goods already purchased.
These are suggestions that salespeople make, related to what the customer has just purchased. It's like asking if you want french fries to go with your snack, or if you'd like to get headphones for the cell phone you just bought.
This even happens when the gas station attendant asks if you've recently checked your engine oil level when you're filling up your car. The product offered doesn't always belong to the same group as what the buyer is already purchasing, but it complements the new acquisition.
A very common practice that works very well in most retail stores is to strategically display items next to the checkout lines. This way, merchandise from various categories can complement any product already being purchased.
Upselling
Upselling , or details of the device. And even if they seem to have no doubts, that's where the salesperson comes in.
With this technique, the seller's goal is to expose the consumer to more personalized products, and possibly add value to a purchase that the buyer is already certain they will make.
Using a common example, it's when you take your pet to a pet shop and they offer a special bath with grooming included, probably for a special price.
Another interesting upselling tip you can apply is to increase the perceived value of your product by offering merchandise bundles.
For example, by grouping together a number of products into a single package with a small profit margin, you will attract the customer's attention more quickly, rather than trying to sell a single item. Thus, people who initially wanted to buy only one of these items end up buying the others because they are perceived as "cheaper" as a whole.
In summary, cross-selling offers extra products or services that complement the purchase, while upselling is a technique that seeks to "improve" and add to the final purchase of a product or service.
Customer Retention
In most companies, it's common to see a great deal of effort and investment in acquiring new customers, while retaining current customers is often relegated to a secondary priority.
Adopting strategies for customer retention means thinking about the longevity of the company. A loyal customer will continue consuming and generating revenue for the company for a long time. Therefore, when acquiring a new customer, you should consider the consumption potential in the coming years, not just at the moment.
This concept is also known as Lifetime Value (LTV), which can be translated as the value of the customer lifetime. In other words, it's about evaluating how much, on average, your customers invest in your products or services during the period in which they have a relationship with your company.
To give you an idea of the costs, retaining a customer is about five times cheaper than acquiring a new one.
Therefore, focusing on customer retention, thinking about their experience, listening to and fulfilling their needs is the most efficient and cost-effective way to grow your business.
Undoubtedly, there's a restaurant or business in your city that's been operating for over 20 years, doesn't do marketing, and yet makes more money than any other that invests heavily in media. What's the logic behind this? The customer comes to your store, buys something, is satisfied, shares the experience with friends, and returns after a while.
Without a doubt, customer retention will bring numerous benefits to your company, offering an excellent experience and many advantages that customers likely won't find with the competition. This added value created can be the key to keeping your customers loyal.
How do you measure customer loyalty in retail?
It is undeniable that strategies aimed at building customer loyalty are essential for the success of a business; after all, loyal customers buy more, provide free advertising, and reduce customer acquisition costs.
And these are just some of the advantages that can be identified in this strategy.
So how do you measure customer loyalty in businesses where most of the purchasing steps are done by each consumer individually? This is the reality for self-service retail stores operating on a large scale.
Reasons why a customer becomes loyal to a store:
To measure customer loyalty, it is necessary, first of all, to know the reason for their preference for a particular store or product.
Customers may be loyal to a store because of its location, specialization in a particular product, or because it provides a pleasant and complete shopping experience.
For structural reasons related to the 4 Ps of marketing, satisfaction surveys help map the characteristics that build customer loyalty. But for other reasons, of an emotional nature, the analysis needs to be done from a different perspective
The crucial question and the Net Promoter Score®
On a scale of 0 to 10, how likely are you to recommend our store to your friends and family?
Applying an electronic questionnaire with this simple question at the end of a sale allows the company to classify the level of customer loyalty on a scale, the Net Promoter Score®.
This metric assesses how much the respondent recommends a particular company, product, or service to friends, family, or colleagues. The idea is simple: if you enjoy using a product or doing business with a particular company, you want to share that experience with others, right?
Depending on their response, customers will be divided into three categories:
- Promoters (score 9-10) are loyal enthusiasts who will continue to buy and recommend your products to others, fueling the growth of your business.
- Neutral (score 7-8) satisfied customers who buy with average frequency and are vulnerable to competitive offers.
- Detractors (score 0-6) are dissatisfied customers who can damage your brand and hinder growth through negative word of mouth.
Satisfaction and experience in retail: A look to the future
Imagine how much information your business is generating at any given moment, regardless of the size of your company. Have you thought about that?
Today we can gather data on business activity such as emails, marketing campaigns, strategic planning, financial data, satisfaction surveys, profit and loss statements, and customer databases.
Looking at all this content in general, it's normal to feel lost, as there's no way to tabulate, cross-reference, and optimize so much data to the point of generating relevant information and knowledge that impacts the consumer experience.
Global retail companies, by tracking and interpreting all the data they generate, leverage cognitive technology and processing power to transform data into business knowledge.
The goal is to have a 360-degree view of what's happening in the company and even to know the future, based on internal and external data, allowing you to focus on what matters: the customer.
The way to deal with the consumer becomes clearer, and thus we find patterns, problems and solutions, taking customer satisfaction to another level.
When we understand the customer, intangible characteristics such as transparency, respect, security, and trust become part of the buying experience, because that's what the customer truly acquires.
Something fundamental to keep in mind: no matter the size of your company, technology can and should be present in your business.
There are several affordable tools available that will make your business smarter and help you understand your audience.
Watch our webinar on the 4 key metrics to measure customer experience and when to use them in the journey.
Conclusion
Begin your journey by understanding the specific characteristics of your consumers and your customer satisfaction. Knowing the factors that drive purchases helps you efficiently measure all channels.
Good customer service is the beginning of a lasting relationship with your clients. It's the initial step towards building loyalty.
From this point on, you should focus your efforts on keeping that customer a friend of your company, creating opportunities for them to do business with you again and even bring in new customers.
By focusing on the desires and needs of your consumers, you will create a flawless experience that will likely boost sales significantly.
Since the future of retail is the combined experience, we need to pay particular attention to the smartphone, because with each passing day, the device increases its importance in the consumer's purchasing journey.
Google data shows that mobile shopping clicks surpassed desktop clicks , as consumers made their purchasing decisions wherever they were.
Another relevant point is that through research conducted by Google in conjunction with Ipsos MediaCT and Sterling Brands, they discovered that 71% of consumers who use their smartphones for in-store research say that the device has become an important part of the shopping experience.
Without a doubt, the mobile brings a new approach to all businesses, including retail. Measuring and tracking customer satisfaction is fundamental to business success.
By following these steps, you'll know if you're on the right track and what problems are occurring in your store. Don't fall behind your competition, start using technology to your advantage!