Putting emotional experience back into retail interactions

The evolution of the retail industry continues at pace. At the outset, new innovative competitors entering the market were seen as the disrupters — but it’s customers who are actually causing the real disruption.

This is a trend not lost on business leaders, with PwC research highlighting that 86 per cent of CEOs believe customers will demand more from their products over the next five years. This evolution is being powered by two key factors.

Firstly, a younger generation of millennial consumers are eschewing mass retail in favour of more personalised experiences. Secondly, the expectation of personalisation introduced by on-demand services and the speed of social media runs counter to the older retail model of mass consumption.

Previous advances in technology allowed global retail to improve production and optimise supply chains. As manufacturing capabilities improved, people were urged to consume more, but often in a cold and impersonal way. This loosened the bond between the customer and retailers, resulting in lower affinity and, in turn, a fall-off in loyalty.

Today, customers are actively demanding more personalised experiences, a retail concept that is not so new. Over a generation ago, shopping was by default a very personal experience. Communities shopped at local stores, which were hives of interaction.

The owner knew your name, where you lived, and what you might shop for on a particular day of the week. As a result, people didn’t view visiting the local shop as a chore. They enjoyed the experience.

The retail landscape is undeniably more complex now — with far larger and more dispersed audiences, and greater product variety. Yet as retailers, we can take inspiration from the local shop model by instituting a move “back to the future”. By that, we mean using the power of modern technology to create experiences as personal as those of old.

It is fitting that the rise of technology, which first led to the concept of mass production that created a customer disconnect, is now giving us the tools to respond to a customer-led revolution towards personal experiences. According to Deloitte, today, 22 per cent of consumers are happy to share data in return for a more personalised experience, and this figure will grow.

Advances in big data, analytics, AI and machine learning will together allow us to further customise the experience to the customer’s preferences, and in turn drive greater demand for personalisation.

While the creation of personalised shopping experiences requires technology-facilitated customer understanding to extract, it also requires drilling down beneath the surface needs to understand true customer wants in order to create more meaningful and delightful retail experiences.

For instance, a family that shops for groceries in Carrefour on a Saturday afternoon is expressing a need. But using technology and analytics to explore more deeply might tell us that what they really want is to have a fully-stocked fridge before a busy working week. Armed with this insight, we can then offer experiences that help them answer their wants — perhaps through seamless home delivery as soon as they have finished shopping — to create delight.

This customer-driven personalisation also makes the dichotomy between brick-and-mortar stores and online channels redundant. Both are here to stay as complementary platforms, which offer largely different journeys to customers.

To understand this, it’s helpful to consider the entire customer journey as the two-step process of shopping and purchasing. Shopping is a discrete activity of tactile and visual exploration where consumers browse the aisles and engage at their own pace.

Brick-and-mortar stores play the role of a social stage to catalyse this experiential engagement. The actual purchase might not be made in-store but the conversation with the customer may continue online, so there is seamless movement between the physical and digital world.

The need of the day is to consider how digital augments the physical to create seamless and personalised customer journeys.

This era of personalisation ensures customer expectation dictates what good experience is, where it should happen, and when. Those who consistently hit the mark in this environment — whether online or offline — will survive and thrive, while those who don’t will quickly become surplus to requirement.

Vino El Khatib is Chief Marketing and Brand Officer, Majid Al Futtaim Holding.