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Customer experience

How retail is evolving and why customer feedback data is essential

At the start of 2020 when the world went into full pandemic mode, the future of retail was uncertain. With it, came rapid innovation that saw businesses around the world accelerating the development of technologies and processes, like Buy Online Pick-up In Store (BOPIS), curbside pick-up, and contactless payments, to name a few. 

These retail ‘trends’, or now considered the evolution of retail, has brought about shifts in customer behaviors and expectations, coupled with operational changes. This means that companies will need to pay special attention to their customers’ experiences by using honest and omnichannel customer feedback data to ensure there isn’t a disconnect. 

Let’s look at the top four retail trends we’ve seen, and why customer satisfaction, and their feedback, is essential for the re-emergence of retail:

1. Physical adaptations will stay

The pandemic has changed the way people shop and the way they think about buying things in-store. Consumers are increasingly doing their research online before visiting shops, leading to less in-store grazing and the expectation of fast and safe customer service. This change in customer behavior towards more focused and necessity-driven shopping has forced many retailers to rethink the way they not only draw customers to their stores, but keep them coming back and maximize the value of each trip.  

Retail trends like BOPIS (which grew more than 500% during the pandemic) will stay and are redefining convenience and safety in the shopping experience. Though total global in-store retail sales in 2020 dropped approximately 1 trillion USD from the 2019 total of 19.4 trillion USD, it is estimated to bounce back to pre-pandemic values this year with projected growth to 21.4 trillion USD by 2024.  

This is a strong signal that retailers should not shift focus away from their physical retail locations, but instead strategize how to further develop their offerings and turn these changes in consumer behavior into revenue generating opportunities. Additionally, with the growth in e-commerce, the realization that an omnichannel approach is necessary has definitively hit home, yet with it brings the challenge of delivering a seamless customer experience between the physical and digital. 

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2. E-commerce will continue to grow

With the restrictions or closures that COVID-19 brought with it, more people turned to online shopping. E-commerce will continue to shape the consumer and retail industries-and not only changing shopping behavior but contributing to the digital transformation of retail business models.  

In 2020, over two billion people shopped online and retail e-commerce sales worldwide amounted to 4.28 trillion USD.  By comparison, in-store retail sales still, by far, generates the lion’s share of sales, bringing in 18.5 trillion USD in 2020. So while e-commerce is on a clear growth trajectory, traditional brick-and-mortar stores will still be growing strong, especially when considering the high cost of customer acquisition when operating solely online. 

What this means is that it is crucial for retailers to develop strategies to ensure their customers can continue to shop with convenience across all touch points and with the least amount of friction. Many retailers who have had to either create or expand their digital offering will need customer feedback data to further develop this channel, learn how the online customer experience compares to in-store, and make action plans on how to close any gaps in customer satisfaction. 

3. Differentiation by cultivating customers’ preferences

As the partition between the digital and physical continues to fade, blending ever more into a ‘phygital’ retail world, monitoring and adapting to customer experience feedback has become indispensable. With the restrictions in the ways consumers were able to shop, retailers have had to pay close attention to their customer needs and behaviors in order to enhance their offerings, maintain – or even strive to increase – their customer base, and develop their digital footprint.  

Retailers should ask themselves three questions: 1) How can we better connect with our customers; 2) how can we drive engagement with the brand; and 3) how can we offer a frictionless customer experience? Cultivating customers’ preferences and delivering a great service experience in whichever channel they prefer will be an essential part of the retail recovery.  

In addition, smart retailers will identify and implement ways of connecting and/or streamlining the avenues (or entry points) of their customers into their other channels. This is why being able to capture customer feedback across all touchpoints will be crucial, as the trends in the customer satisfaction data act as the compass towards the north star of developing a differentiated and experience-driven retail brand. 

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 4. More focus on ‘the human touch’ and personalization

Social distancing, lock downs, and restrictions meant much less social interaction and a sense of loneliness. For many people, visiting their local store or an essential business became their only form of social interaction and opportunity to have face-to-face conversations. Large retailers, like US convenience retailer Good 2 Go stores, recognized this need and decided to shift from the ‘in-and-out’ practice and encouraged staff to offer an even more personal and friendly approach to daily interactions with customers. 

Other retailers, like US charity and retail organization Goodwill industries, who were seeing customers come back that had stopped shopping since lock down, provided additional support from staff to help customers understand new policies so that their return to shopping was an easy, pleasant experience.  

Additionally, retail and technology trends like mobile and social media shopping, live messaging and chatbots, AI driven ads, and an ‘online presence for offline customers’ will play a big part in personalization and the customer experience. As retail heads towards a totally connected phygital world, really knowing your customers will define success.

Customer satisfaction data showing positive signs 

When analyzing HappyOrNot’s global retail data, a positive sign of retailers placing the right focus on their customers is that the customer satisfaction score in 2020 for the retail industry did not decline, but improve. In fact, compared to 2019, customer satisfaction increased by 4 percentage points from 87% to 91%.

Many of the retail customers we spoke with admit that they had anticipated a dip in sentiment during the pandemic but saw the opposite. This, they said, was attributed to customers showing appreciation that companies were quickly adapting to continue to meet their needs while also demonstrating care for their safety. 

Additionally, signs remain positive as our Q1 2021 data recorded global retail customer satisfaction at 93%. However, as restrictions ease and more customers return to the stores, retailers will need to remain vigilant in offering the same level of service experience that customers have become accustomed to.  

So what does it all mean? It goes without saying: customer feedback is your greatest source of learning. And while the pandemic threw a monkey wrench into almost all business’ plans, being able to validate, correct, and learn from honest customer feedback data is invaluable on the road to recovery, and growth, for the retail industry. 


Additional resources

Watch our informative on-demand webinar session with Geoff Given of Good 2 Go Stores and Julie Deming of Goodwill Industries discuss the future of retail post-pandemic and how retailers can prepare for the new normal. Click below!

Good 2 Go, Goodwill Industries, HappyOrNot on-demand retail webinar image

  • Customer experience