Last chance saloon

Q&A with ReachFive’s Russell Loarridge on how stores with an online shop must learn to engage with their customers.

Is the writing on the wall for eCommerce?

Customers have relied on online retail for 18 months with repeated lockdowns contributing to an extraordinary spike in growth - online now contributes 36% of retail revenue compared to just 16% pre-pandemic. Yet, while some of this new buying behaviour is likely to stick, online is no longer an emergency destination and retailers have failed to take note.

Why?

People are missing the quality of the shopping experience. Buying online is a mechanical process at best, excruciatingly frustrating at worst. With growing confidence to return to the high street, the decline in online retail is inevitable. The big question is just how steep that decline will be.

As the peak season excitement of Black Friday and Christmas approaches, retailers have one last chance to take a serious look at the online experience and deliver the level of personalisation customers expect.

Surely many retailers have worked hard on their online offering?

Sure, websites are more robust and can handle increasing customer numbers without delays. Logistics processes have been overhauled. From diverse delivery options to an improvement in picking accuracy, fulfilment is more efficient.

But the essential buying experience remains the same 'inadequate, perfunctory, exasperating. Why are individuals still compelled to wade through piles of irrelevant items in an increasingly desperate bid to find the required product, only to discover it is out of stock? A jumble sale would be more fun - and more productive. Is it any wonder basket abandonment and product returns continue to spiral?

Online is no longer an emergency destination - and consumers expect something better. A lot better. Yet retailers have simply accepted the new customer base and assumed it's here to stay. There has been little attempt to truly discover who these customers are - over and above an uninformative email address and a telephone number.

A good retail experience has always been predicated on providing a product that meets a customer's needs. Yet the vast majority of online retailers still have no real understanding of the individual preferences of each customer.

What's gone wrong?

The pandemic-induced sales growth is masking the reality: online retail isn't working. It's not working for customers who are missing the quality of a personal interaction in-store. What's more, it isn't working for retailers facing an ever-escalating cost of sale. From the logistics disruption due to both inbound shipping delays and a critical lack of HGV drivers, as well as an escalating cost of sale with labour, fuel and marketing costs on the rise, those small margins are under serious pressure.

OK, so what's got to change?

Retailers need to create a loyal customer base that is also profitable. They need to create the positive brand loyalty and environment that actively encourages customers to come and browse - both online and in store. What is the best way to move from the chaos of the online jumble sale to a virtual store that can use customer knowledge and your expertise to take customers straight to the products they love?

It's all about creating a personal connection. Asking the customer their gender and age bracket, for example, immediately allows the health food retailer to present a far more relevant subset of the overall product mix. Find out what their health concerns are and the retailer begins to create a valuable profile that can be used to nudge customers towards the most suitable items. Add in a ‘only show available stock' button and time-pressed customers will avoid the frustration of clicking on items only to discover at check-out they are no longer available - or not available within the timeframe they want them by.

How can stores engage better online?

Customer information can transform the quality of the shopping experience. This is not about using super intuitive AI tools which may at best conclude a customer has a 98% chance of being female and a 5% chance of being vegan. Why not just ask questions? Find out about their preferences, problems and lifestyle choices, then use this behaviour as a trigger to engage and interact. This information can then be captured and used to enhance the customer experience every time, with a personal identity that becomes deeper with each visit.

Those retailers with an online and physical presence can make it an event. Inviting customers to a pop-up shop opening where they can have a free cup of coffee and a chance to engage with expert staff, or even a therapist, is a great way of building engagement and improving personalisation - and ensures the customer knows what supplements or healthy food to choose next time.

Can you give some examples?

Personalisation could and should be built into every stage of the online experience. Why, for example, are retailers not using returns information to improve their individual customer understanding? While some companies capture that data at a generic level to provide insight into issues with product quality and packaging, linking it to each individual customer is also hugely valuable.

Adding it to a customer's profile will help individuals with their next buying decision. They can check their buying history, what they kept and what was returned, which will help them choose correctly first time and improve the experience. Or why not present a simple pop up reminding the customer which products he or she tends to keep, to provide a quick nudge in the right direction?

A customer searching for children's lunchbox snacks at the end of summer is probably getting ready for the new school term. Why not make the process quick and simple with a pop up saying, ‘Looks like you're buying for back to school, here are the latest snacks we have in stock now and can get to you before term starts'. Creating a personal connection isn't complex - it just requires the right mindset.

How would you sum this up?

The speed with which online sales increased when the pandemic hit shows retailers just how quickly customer behaviour can change. And right now, what is the reason for customers to keep buying online while the quality of experience remains as perfunctory and impersonal as ever?

Those retailers who invested heavily in online operational processes now face a rapid decline in demand at a time of diminishing margins. Nurturing a loyal customer base should be a priority. With peak season rapidly approaching, retailers are in the last chance saloon - action is required now.

ReachFive offers an identity and access solution for improved customer experience. ReachFive.com

Read more articles from our latest issue...