Engaging and communicating with customers in the digital age

How digitization of retail is influencing the retailer-customer relationship // By Sean Tarry

The recent digitization that’s been experienced by people living in communities all over the world has already resulted in a number of dramatic impacts, influencing the way we do just about everything. It’s facilitating the advancement and propagation of technologies like artificial intelligence that are enhancing predictiveness and increasing operational agility throughout organizations, from optimized supply chains and increasingly accurate demand forecasting to the development of a better understanding of the customer. However, where the digital acceleration seems to have had the most profound effect is concerning the ways in which people communicate with one another, the modes by which we share, receive and consume information, and the amount of it that we now have access to. As a result, according to the Retail Prophet, Doug Stephens, it’s dramatically changed the way in which retailers must engage with their customers.

“Retailers must recognize that we are rapidly moving toward a world in which all the traditional functions of retail stores - namely displaying assortments, providing product information and transacting sales can be more effectively and efficiently performed online,” he asserts. “As we move into the future with technologies like augmented reality, virtual stores and AI-driven customer support, this will only become more the case. Digital media is fast becoming “the store”. And it’s a store that sits in the palm of the consumer’s hand, and is open 24 hours a day.”

Digital permeation

Indeed. Despite the source, all of the most recent data that’s been generated concerning mobile penetration in Canada, and the ways in which mobile devices are being used, point to a significant shift with respect to the behaviour of today’s consumer and the ways they are connecting with the world around them. According to Statistics Canada, 88.1 per cent of Canadian internet users aged 15 years and over own a smartphone, with 45.4 per cent checking their devices at least every 30 minutes.

And, as most would understand, smartphones, and our use of them, is now woven, intertwined within our daily routines. The same Statistics Canada data reveals that 20.6 per cent of smartphone owners use their device while eating dinner, 53.6 per cent will do so while watching television, and for 56.1 per cent of them, the last thing they do before going to bed is a quick check of their phone.

Rise of mobile commerce

And, it’s not just our daily, mundane routines that involve the use of smartphones, permeating just about every facet of our environments. And that extends, naturally, to retail and the ways by which consumers are engaging and making purchases with them. According to a recent study conducted by Ipsos and PayPal, mobile commerce within Canada is starting to gain meaningful traction, revealing that of the 60 per cent of Canadian internet users that make purchases online, nearly 1 in 5 (19%) have made a mobile purchase within the last 12 months. All of this data goes to support Stephens’ observations concerning the demise of the traditional, strictly functional retail store. However, the veteran industry expert also sees a plethora of opportunity to leverage the brick-and-mortar store as a means to engage the consumer in new and innovative ways.

“The opportunity for retailers today is to transform physical stores into powerful, experiential media channels where brands can truly wow customers and draw them into their ecosystem,” he says. “This means employing technology at the store level that can really enhance the consumer’s time in the space. This should not be taken to imply that we simply fill the environment with screens. That’s a lazy approach. Rather, we have to really dissect each moment in the in-store experience to look for moments where technology can be used to inform, inspire, and empower customers and enhance their sense of delight.”

Evolution of engagement

In light of the digitization of the retail shopping journey, Stephens also suggests that communication with the customer has changed. In fact, recent data released by Sprout Social indicates that 64 per cent of consumers want brands to connect with them, and a further 91 per cent of those surveyed believe in the power inherent in social media to make those connections. In addition, responses revealed that as a result of a connection being made with a retailer, 57 per cent of consumers will increase their spending with that brand, with a further 76 per cent making purchases over their competitors. And, when it comes to the communication that’s attracting interest, 70 per cent of consumers admit to feeling more connected to brands whose leaders are active on social media, with 72 per cent experiencing the same feeling when employees of the brand share information online. Despite the message and the person behind it, however, Stephens suggests that retailers ought to understand what type of content their consumers will appreciate.

“This might sound obvious, but retailers should start by not developing communications based on what the brand needs and wants,” he explains. “Instead, they should focus on building content that the consumer finds useful, valuable or meaningful. If a brand begins from a place of self-interest, it won’t matter how the message is delivered. No one will care. So, start from the needs and desires of the customer and work back to the message, content and delivery methods that you can offer.”

Honesty and authenticity

Stephens goes on to explain that, in addition to building the content and communication with the needs and preferences of the consumer at the heart of the message, it must be done so in an honest and authentic way. And, if done so effectively, more data from Sprout Social suggests that the potential impact on a business’ current and future revenue could be immense, revealing that when consumers feel a connection with a brand, they are 68 per cent more likely to recommend the brand to a friend, 64 per cent will experience an increased sense of loyalty to the brand, and 38 per cent will even continue shopping with the brand after a bad experience. In the end, consumer response and reaction to the engagement a retailer offers them is all part of the relationship that’s been established. And, as Stephens points out, given the vast amounts of options present within an ever-expanding retail ecosystem that consumers can choose from, it’s a relationship that brands must treat with greater importance than ever before if they are to succeed in the digital age.

“Given the amount of choice available to consumers today, we have to work to develop a sense of friendship and connection with customers. Looked at through this lens, retailers need to ask themselves: do friends spam each other daily? Do they talk endlessly about themselves with little regard for the other person? Do they offer their friendship in a promotional or transactional way? Obviously, the answer to each of these questions is no. So why would we consider it acceptable for brands to communicate with their customers in this way? Instead, we need to ensure that any and all content shared is thoughtful, valuable and useful. Otherwise, it’s just more noise.”