Sergey Kozhevnikov, VP Product Development, Teamwork Commerce.
Retail sales can have peaks and valleys throughout the year. However, busier periods, such as the festive shopping season, present strong opportunities for retailers to expand their customer base and maximize sales. While many may view this opportunity in the short term and focus solely on their performance within that short period of time, the reality is that these periods can act as a catalyst for long-term customer retention and sustainable business growth.
The festive shopping season is a good example of this. From Black Friday through January sales, retailers have three months to attract new customers, deliver exceptional experiences and build strong relationships that sustain sales.
In the lead-up to these opportunities, retailers must of course prepare accordingly. Increasing inventory levels, offering overtime for staff and offering attractive discounts and promotions can seemingly put pressure on short-term success. However, it is important to keep an eye on the broader retail view and use these periods for longer-term growth.
The importance of customer relationships
According to Bain & Company, consumers spend an average of $132 per month at retailers that have earned their loyalty, while they spend only $71 per month at brands they rate lower. When customers feel valued by a brand, they not only continue to spend money with that company, but the trust they have built makes them spend more. Meanwhile, Gartner research shows that receiving value during a service interaction increases the likelihood that a customer will share positive word of mouth by as much as 97%.
Strong customer relationships are crucial for retailers. By offering customers high-quality service, retailers can positively influence their relationships with customers. These relationships not only increase the likelihood of higher and repeat spend with their current customer base, but also increase their chances of expanding their customer base through word of mouth. At this point the process can be repeated and retailers can quickly find themselves on a virtuous cycle, continually growing and retaining the number of customers they reach.
The challenge of retaining customers
Strong customer relationships are important, but don’t necessarily materialize, especially during busy periods. With high store traffic, delivering a high-quality customer experience can be difficult: crowded areas, lots of waiting for customers and long queues all come at the expense of the level of service retailers should strive for. Busy stores also create potential stress for store associates, who, rather than focusing on creating exceptional experiences, might instead rush interactions to maximize the number of customers they can serve.
These periods also create the possibility of struggles beyond in-store sales. Many retailers today have developed an omnichannel presence, giving customers several options to complete their shopping needs. In theory, this is a highly effective practice that allows fulfillment options such as buy online, pick up in store (BOPIS), or buy online, return in store (BORIS). However, during peak shopping periods, inefficient order management can quickly lead to retailers failing to fulfill omnichannel orders, which can be catastrophic for customer relationships.
Effectively manage relationships during peak periods
A few key retail adjustments can effectively help retailers deliver high-quality shopping experiences despite high store traffic. This transforms a potentially stressful environment into one where every customer who walks through the door is cared for and valued.
Everything starts with the staff and the tools they make available. Preparation is key and the human element is crucial to delivering an optimal customer experience. Therefore, retailers need to ensure that, firstly, they have enough employees on the shop floor to manage a surplus of customers, and secondly, that they are all properly trained in how to deal with different customers and how to best use any tool. with which they can serve visitors in the store.
From here, two factors become critical in relationship building: personalization and speed.
According to McKinsey, 71% of consumers expect companies to communicate with them on a personal level. With the right customer relationship management (CRM), retailers can use secure customer data to tailor interactions and empower in-store associates to deliver tailored interactions that make customers feel valued. This may include making product recommendations or alternative suggestions based on previous purchase history. With the right data, retailers can also create personalized loyalty programs, offering discounts and promotions on specific items relevant to customers.
In a cost-of-living crisis, loyalty programs are proving highly effective for retailers, attracting repeat customers while allowing consumers to get great deals. They also help retailers attract younger generations. Deloitte found that 60% of consumers aged 18 to 24 claim they value points-based loyalty programs, while 20% also claim they would stop shopping with brands if they ended their loyalty program.
A personal experience is crucial, but combining that with speed provides convenience that few other retailers can offer. Mobile point-of-sale (POS) technology allows retail brands to effortlessly transform their entire business operations. Mobile POS solutions are able to interface with a retailer’s broader technology stack and enable real-time insights around inventory and order management, CRM and broader data and analytics. At this point, employees can create personalized experiences, provide up-to-date inventory information to customers, and activate customized discounts and promotions, all from one device. Importantly, mobile POS allows associates to conduct transactions anywhere in the store.
Suddenly, employees can provide highly customized service and facilitate quick checkouts at the customer’s pace, eliminating queues. The time of both customers and store employees is optimized. Customers leave the store having received a top experience and employees can quickly move on to the next customer.
Remember the long-term goal
Relationships in retail are crucial. While peak shopping periods can be stressful, they are also the perfect breeding ground for long-term relationships to blossom and expand a retailer’s customer base. If retailers can deliver real value during these seasons, they can seamlessly build a strong foundation for future growth.
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