Categories: Retail

Retail Focus Turns To Re-Engaging Customers

Call it “The Great Re-engagement.” Now that physical retail is open throughout the U.S., the spotlight moves toward re-engaging the most valuable asset any company has: customers. Retailers of all sizes have their work cut out as customers come back to new safety rules, social distancing and a whole new set of fears.

Several experts have focused on that re-engagement issue. One of the most notable comes from Harvard Business Review, where professor Rohit Deshpande and two colleagues write that retailers need to be more customer-centric than ever.

“Past research demonstrates that firms who maintain or accelerate customer-centric philosophies consistently outperform firms that do not,” he says. “In fact, they gain market share from competitors who cut back on customer-centric investments. During this COVID-deaccession, it is even more critical for firms to become more customer centric by researching and understanding their customers’ new problems caused by fear, isolation, physical distancing, and financial constraints, and attempt to structure their offerings to meet these new unmet wants and needs.”

How to do that? Deshpande and his colleagues have created a five-point plan that ranges from a digital capabilities inventory to recognizing capital restraints on the business. Most importantly, he says, retailers need to accept the reality that consumers may not feel safe in any store and retailers must have options in place to accommodate that. Along those lines, expending the digital footprint must include delivery and pickup options and even incentives to use them. He calls out Dunkin’s extra loyalty points to customers who pre-order on mobile apps.

“Firms can introduce special offerings to customers requiring special considerations because of their risk level, creating more loyal customers for the longer term,” says Deshpande. “The Knot Worldwide is providing financial assistance to its vendors (like caterers, flower companies, and apparel brands) to help them get through hard times. Netflix set up a $100 million fund to help creatives like actors, producers, and writers whose jobs are affected by COVID — making Netflix the likely preferred destination for future work by creatives. Walmart is paying suppliers more quickly. Costco, Whole Foods, and Dollar General introduced shopping hours for senior citizens while Woolworths Supermarket in Australia closed a number of stores with less traffic to better enable deliveries to seniors, those with disabilities, and those in quarantine or self-isolation.”

The contactless theme appears more frequently now that stores are open. It’s a story clearly illustrated by surveys PYMNTS has conducted of more than 12,000 American consumers every two weeks since March 6. That research shows that since the shutdowns began, 42 percent of consumers are using digital channels to engage in activities more often than they did before the pandemic broke out. What may be unexpected is the percentage of those who say that many of those digital habits will stick — roughly 75 percent.

“I think stores that are going to adapt are going to recognize that consumers still want to see and feel the product and find ways to facilitate that either digitally or in person, but that the actual touching in the mechanics of the payment will change dramatically,” Robert Clarkson, senior vice president of global account, business and global partnerships at PayPal, told PYMNTS.

Wired Magazine has also picked up on the need to eliminate friction from the shopping and payment experience, and makes a strong case for contactless cards as well as expended digital capabilities.

“Striving for a frictionless experience for your customers, employees, suppliers, or other stakeholders isn’t just something that the digital era has enabled you to do. At this point, it’s a requirement. If you aren’t reducing friction in every part of your business, you will soon be done,” says Wired. “The reason is simple: When you remove friction from a process or a system, you give the people in that system back one of the only things that is utterly non-renewable, time. And as more and more time has been ironed out of almost everything we do — the most recent example being the elimination of commuting for much of the planet — people have realized that for far too long they’ve let someone else choose how they are going to spend their time. Those days are gone.”

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NEW PYMNTS STUDY: LEVERAGING THE DIGITAL BANKING SHIFT – SEPTEMBER 2020

The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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