The retail industry landscape continues to evolve as we muddle through an era of high inflation and economic uncertainty. Consumers continue to make choices about where to cut back their spending, which is affecting retailers as they battle to maintain their share of a shrinking wallet.
Verint recently conducted a survey of 2,000 U.S. shoppers which supports this trend and shows that more than two-thirds are less confident in the economy than a year ago and 76 percent are spending less, trimming retail purchases, particularly in the areas of entertainment and clothing.
This research report analyzes the effects of inflation on consumers’ concerns and spending habits, detailing how retailers can adapt to ensure they’re delivering superior customer experiences.
Shifts in Consumer Shopping Habits
Over the past six months, consumers have experienced disruption, such as higher gas prices and supply chain issues leading to items being out of stock, that has altered their shopping behaviors. In many cases, they are trying out new retailers for the first time. Savvy retailers will work to ensure these “first-time shoppers” become long-term shoppers.
The survey revealed that 91 percent of consumers shop at their favorite mass market retailer at least once a month, with 83 percent spending $50 or more on average.
However, three-quarters of consumers who tried a new mass market retailer for the first time in the past six months shopped there more than once, with 90 percent of first-time shoppers making purchases at least once a month thereafter.
Amazing Customer Experiences Curry Favor
Struggling with inflation and economic uncertainty, 56 percent of shoppers surveyed said “value for the money” was a key consideration in their loyalty to mass market retailers, however customer experience can be another way retailers can win wallet share in this era of austerity.
After having an “amazing” customer experience, 88 percent are likely to make a repeat purchase, 82 percent are likely to recommend to friends or family, 68 percent are likely to join a loyalty program, and 63 percent are likely to write a positive review.
Reasons consumers say made them likely to stop purchasing from a retailer included: if a customer service issue isn’t resolved in a single attempt (62%), if unable to communicate on their channel of choice (57%), if forced to repeat themselves (55%), and if they have to endure long wait times (50%).
An Action Plan for Engagement in Times of Economic Uncertainty
To win today and sustain profitability, retailers need to impress first-time shoppers while keeping existing shoppers happy, building positive experiences across multiple engagement channels. Retailers can retain loyal customers through hybrid engagement strategies coupled with modern working practices, ensuring their entire workforce engages with customers in the right way, at the right time.
The first step is understanding exactly how a company can deliver outstanding omnichannel customer journeys and to analyze which areas of their customer engagement strategies are working well, or not so well, so they can make the corresponding changes.
Speed is essential, so collecting customer feedback in real-time is critical. Gathering customer insights in the moment enables retailers to take immediate action, often through customer self-service or a hand over to a contact center employee for assistance. Real-time digital feedback data means issues can be identified and handled early before becoming widespread.
Automation also plays a key role in the delivery and analysis of customer insights. The ability to drill down into recurring customer issues to identify areas for improvement across each touchpoint and channel is crucial. And, with the level of automation growing for eight in 10 companies, ensuring it’s deployed on the right channels, for the right use cases, will be key.
