Retail Success in the Experience Economy

By Ian Steyn, Product Executive at Innervation Pan African Payment Solutions

Want to succeed in the retail game? Then focus less on the products you sell and more on the experiences you offer your customers.

We have now officially moved into the Experience Economy, where customer experience outranks price and product in importance regarding how and where consumers choose to shop. According to Gartner, 50% of product investment projects will be driven towards customer experience innovations, as companies recognise the importance of an experience as a key differentiator.

Physical stores no longer hold a monopoly over the access to products. Online retailers – and brick-and-mortar retailers with ecommerce offerings – today offer nearly every product you would find at a physical store, often at a lower price and with the convenience of door-to-door delivery included.

It’s not enough for retailers to simply offer products.

More than a trend

If a retailer’s only reason for existence is to sell products, it’s unlikely to survive the next decade. Consumers now care more about the customer experience than any other single aspect of shopping.

Some studies even suggest that this shift to experiences is more than a trend; there is growing evidence that experiential purchases bring consumers more enduring happiness than material purchases do. The focus, for consumers, has shifted from having things to having experiences.

Researchers in one study cited by the World Economic Forum found that experiences create more happiness because they tend to become more meaningful parts of one’s identity, and do more to foster social relationships.

In the US, Millennials have been driving the advance of the Experience Economy for years. One study found that 78% of US millennials choose to spend money on experiences over material goods. Big-ticket expenses such as cars that were a rite of passage for young adults as recently as one generation ago have now been largely replaced by services such as Uber that offer access to experiences over ownership.

Building customer loyalty, ensuring customers spend more money more regularly and tell their friends and family about the positive experiences they have has become a top priority for retailers. But to deliver the kind of consistent, memorable and individualised experiences consumers seek, retailers need to transform.

Transforming the retail customer experience

The retail customer experience can be transformed physically – by creating an engaging environment, offering great service, ensuring a convenient store layout, etc. – and digitally, through a positive online browsing and shopping experience, the delivery of relevant incentives and rewards, and communicating with customers in a personalised manner taking their individual preferences into account. This should be supported by a frictionless payment experience supporting payment innovations such as mobile payment.

However, it is through using data to generate insights about individual customers’ needs and preferences that retailers unlock the true power of the Experience Economy.

Surprises and delights

Using data, retailers can gain a better understanding of each customer’s habits, preferences and needs, and offer individualised customer experiences through specific offers, tailored rewards and hyper-personalised communication.

These experiences play out across multiple touchpoints, including:

  • Card and account management – This is often a retailer’s most significant opportunity to gain information about individual customers and their preferences. Having the appropriate data and analytics tools in place to build accurate individual customer profiles enables richer and more meaningful engagement from the retailer.
  • Payments – It’s no longer a question of “cash or card”. Today, consumers have an array of payment types, from mobile to card to cash. Retailers should allow customers to make any payment type in a safe and convenient way to ensure customers’ individual preferences are catered for.
  • Checkout – In one study, 87% of shoppers said they’d abandon their carts if the checkout process was too complicated. A suitably experienced retail payments partner can provide tools and strategic advice to improve the checkout and ensure a seamless experience.
  • Customer communication – Think ‘personalisation’ is about remembering the customer’s name and sending them a birthday message? Think again. In one global study, more than three-quarters of consumers said receiving personalised incentives based on their purchasing history is important. In another study, 80% said they were more likely to purchase from a company that offers personalised experiences. By building accurate customer profiles linked to their preferences and purchasing history, retailers are far better able to deliver individualised customer communications that build deeper loyalty and brand affinity.

Building seamless and positive customer experiences create engaged customers, boost profits and increase retail market share as more people spend more money with you, more regularly.

Ultimately, you want to work with a team of specialists that provide access to safe and trusted solutions to bring you closer to your customer, understand what they want at an individual level, and offer relevant offers and experiences.

This calls for a reinvention of the retail customer and payments experience. Get in touch with Innervation Pan African Payment Solutions to get started.

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