7 Customer Experience challenges for the Retail Industry


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Being one of the fastest growing and most competitive sectors, the Retail industry and its impact on the end -consumer can ever be understated. With this in mind, the part played by ‘customer experience’ in shaping up the customer’s journey and delighting them is of highest prominence.

That said, only a few retailers have actually been able to create standout experiences that in turn drive customers and revenue to your store.

But why? Why haven’t a lot of retail brands been able to jump on the CX bandwagon and become Customer Experience leaders? It’s not as if it’s some big secret, like the recipe for KFC chicken or Coca-Cola! But it definitely is much more challenging than one might think – to be able to deliver great experiences consistently for your customers.

And talking about challenges, what are the top ones faced by retailers today? Let’s take a look here!

1. Taking an Omni-channel approach

We all know that the need for an omni-channel customer experience is a reality and not some fad. The challenge many retailers are facing, however, is how to go about it.
How does one go from the concept of an omni-channel experience to enabling it on an operational-level?

Retailers need to create a single, unified platform that offers a smooth, holistic customer experience across all touchpoints while eliminating the concept of individual customer channels if they want to thrive in today’s marketplace. This is where the need for a reliable and effective CEM platform arises.

And it all starts with learning more about the shopping habits of the customers you are serving, which will enable you to implement a retail model that works across all channels and enhances the overall customer experience.

2. Technological Upgradation of Business Processes

While most retailers understand the importance of optimizing and unifying the customer experience across all channels, a lot of them are facing a technological challenge.

Many retailers are still deploying outdated technology, which needs to be replaced and/or updated. Without the right technology, creating a unified, omni-channel customer experience will never happen.

Of course, the issue is investment. Another set of the challenges retailers are facing is connecting customer experience initiatives with tangible ROI and this makes many reticent to invest in updating their technology.

Unfortunately, we live in the digital age and we serve customers who are digitally savvy. When the majority of your target market walks into your store and researches a particular product you sell online right from your premises, you don’t really have a choice but to take the leap and make sure you’re providing them with an experience that will ensure they buy from you and not from your competition.

3. Calculating the ROI of Customer Experience initiatives

Many retailers want to see a direct connection between their customer experience initiatives and ROI. They want to know exactly how much return they’ll get on their investments.

Unfortunately, customer experience initiatives don’t translate into immediate results but they definitely provide a more significant long-term ROI. However, until retailers get out of the mindset of “I want to know exactly how much I’ll get back if I spend $1 on XYZ project,” they are doomed to be left behind in the marathon race.

In today’s market, customer experience is the game changer and failing to invest in improving CX will result in customers moving away. They no longer accept a mediocre experience and are willing to pay more to get a good one.

4. Understanding the Customer

Understanding the customer has become an issue for the retail industry. Not only do you have to make an actual effort to learn who your customers are, but you’re also dealing with people whose buying habits change dynamically, subjected to various uncontrollable factors.

A few years ago, for example, mobile represented a fraction of all online searches and transactions. Now? Well, let’s just say more or less everyone is glued to their phones practically 24/7! In other words, there’s been a massive change over the past few years. And keeping up with your customers and serving their ever-evolving needs is essential if you want to be competitive.

5. Shifting to a customer-centric approach

A large number of retailers are finding it challenging to transfer a customer-centric mentality to their employees.

For decades, buying decisions were more or less taken based on the product or price. A wide range of products, having a well-stocked inventory, selling for cheaper prices than your competitors often guaranteed success.

Some are finding it challenging, though, to switch from this product mindset to a customer mindset. They’re trying to overcome years of conditioning, and some don’t even want to make the switch because their product-centric approach gives them exact numbers. A customer-centric approach is slightly less quantifiable, though, in the long-run, the figures are certainly much more attractive.

6. Focusing on Employee Engagement

Creating a great customer experience starts with happy, engaged employees.

A highly engaged employee is 2.5 times more likely to stay at work longer than necessary to complete a job, 2 times as likely to help someone, and more than 5 times as likely to do something good for the company they work for, even if it’s not expected of them, according to Temkin Group (Engage Employees: Great CX Starts With Engaged Employees).

Furthermore, companies that rank well in terms of customer experience have 50% more engaged employees than the companies whose CX they outperform.

But creating employee engagement is a challenge for some, especially since they don’t seem to be aware of the vital connection between CX, financial performance and employee engagement.

7. Handling Resources and other Priorities

Retailers have trouble letting go. Instead of directing their resources towards improving customer experience, they expend them on maintaining outdated technologies and inefficient infrastructures that end up causing more harm than good. The result is skyrocketing costs, lower profit margins and a really unpleasant experience for the customer.

Likewise, there’s always some other priority that seems more important than customer experience. Unfortunately, in the end, there should be no greater priority than ensuring a great customer experience, because that’s what will make your customers happy, keep them loyal, improve your sales and your bottom line.

Ganesh Mukundan
I'm a content marketer at Hiver. I've been writing about customer experience for the past 5 years. I'm passionate about narrating delightful customer stories, researching CX trends, and deep-diving into concepts such as VoC and Customer Journey Mapping.


  1. Hi Ganesh,

    interesting post! While I agree I’d like to challenge your thoughts a bit: Aren’t all the other points consequences of shifting to a customer centric mindset – not only for the employees, but starting from the head (of the fish)?

    Just thinking


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