Four in five (83 per cent) businesses view an engaging customer experience (CX) as a way to stand out against competitors, but 71 per cent of leaders are being asked to match or surpass last year’s performance with significantly reduced budgets.
This is according to Wunderman Thompson Commerce & Technology’s ‘A Vital Recession-Survival-Strategy for Digital Retailers’ report, which analysed the importance of a differentiated customer experience, amid the cost-of-living crisis, economic uncertainty and tightening purse strings.
Lack of budget isn’t the only dilemma facing retail leaders, however. A third (33 per cent) admit to providing an inconsistent experience across shopping channels; this figure rises amongst FMCG (80 per cent) and automotive (46 per cent) brands. The leading factors cited as preventing an improved CX include limited budget (46 per cent) and lack of time (36 per cent), with over two in five (42 per cent) claiming they do not have the resource to focus on customer retention.
With the advent of new technology and changed consumer habits, retailers must now invest in a truly unique customer experience. Fortunately, despite widespread economic disruption, budget cuts and redundancies, the appetite to satisfy customer needs remains undeterred as 71 per cent of organisations believe that with unlimited time, budget and expertise, they would completely overhaul existing customer experiences from scratch to maximise sales.
Rachel Smith, customer experience director at Wunderman Thompson Commerce & Technology, said: “Customer experience has sat in the shadows of retailers’ strategy for too long, previously an afterthought in a world where brand loyalty and digital proficiency were enough to get by. But recently, there has been a noticeable shift in the importance businesses place on customer experience, and those that do, are reaping the benefits. Covid-19 has eradicated brand loyalty, in favour of brilliant service, reliable operations and favourable prices.”
The research also showed that 76 per cent feel they have a clear understanding of key customer frustrations, 77 per cent have a clear view of their highest value customers, as well as their lifetime value and four-in-five (79 per cent), are confident in their ability to connect with high-value customers across channels.
Yet, while retailers may feel they know their customers like the back of their hand, the truth is that as little as 15 per cent conducted their own research in the past three months. That’s a major problem considering businesses typically plan their CX initiatives 12 months in advance.
Smith concluded: “CX enhancements offer a low cost, effective solution to improve growth and margin, fast. Only with a reliable, innovative CX strategy that combines insights gained directly from audiences, alongside industry foresight, can retailers meet and exceed shoppers’ needs and desires. It’s the only formula that will see retailers reap the rewards of customer acquisition, conversion and retention, irrespective of industry and size of business.”