Emotional Customer Connections: The New Retail Imperative
Editor's Note: This post was originally published in Retail Technology Innovation Hub. View the original article here.
The customer connection lies at the heart of successful retail, creating loyalty and driving sales.
Traditionally, this connection has been built around the transactional relationship a customer has with a retailer: the multi-channel approach allowing customers to shop the way they want, when and where they want; the personalised communication to make them feel valued; and the loyalty programmes that reward continued custom with discounts or gifts.
But the world of retail is moving towards an experience-based model. As a result, the more forward-thinking brands are looking at how to develop emotional connections with customers in a bid to engage with them differently in order to drive sales.
We're witnessing this on the High Street as retailers start to provide a more experiential setting to encourage customers in store to buy. Bookshops are a great example of this. Brands such as Waterstones are recognising that their audience will appreciate a quiet and comfortable place to sit and read after they browse the shelves. As a result, many bookshops are incorporating comfortable areas or opening up coffee shop concessions within the store.
We're also seeing sportswear brands such as Lululemon offering free in-store classes that will appeal to their clientele's fitness needs and encourage them to spend time on-site.
Both these approaches are an excellent way to get customers in store and in front of your products. And they offer shoppers the opportunity to speak to sales assistants and meet other like-minded individuals who share a similar passion, creating a sense of community around the brand.
The development of the emotional customer connection is also coming through digital initiatives. Under Armour is a perfect example of a business evolving into a ‘lifestyle' brand by tapping into its customers' hobbies, passions and interests.
The fitness brand launched a body dashboard known as UA Record. It's a free app which tracks steps, nutrition and sleep as well as real-time workout statistics such as heart rate, pace, distance and calorie burn – perfect for its customers with their passion for sport and fitness.
"Research from Forrester found that 85% of consumers buy from companies they have strong emotional connections with, and that they are likely to spend more because of this connection"
And, whilst this is a great perk for customers, it also brings real benefits to Under Armour as a business. It allows the brand to connect with customers outside the store or website environment.
By interacting with their wider influences and activities, Under Armour can connect indirectly with the shopping journey. The data available through the app allows the company to make personalised recommendations. An example of this is getting in touch when it might be time for a new pair of trainers based on the number of miles run over a specific period.
Data is driving the move towards more emotional customer connectivity. Retailers have access to mountains of information on their customers, such as when, where and how they shop as well as what they buy and how much they spend. But this is ‘hard' data, which is focused on the transactional relationship.
Whilst this has done the job so far by providing brands with valuable insights to help them understand buying behaviour, it's time for customer insights to move to the next level. This means enhancing this hard data with ‘softer insights' into customers' passions, hobbies and interests to build accurate personas. In this way, retailers gain a greater understanding into the needs, desires and motivations of their audiences, gaining insights they may not have seen before.
Some are using this approach to develop the in-store experience by knowing their customers and adapting accordingly, others to heighten the personalisation of offers, emailers or reminders. But, the most innovative are using these insights to look for and develop complementary offerings that match their customers' needs and tap into the buying journey, both directly and indirectly to drive sales. To be successful with this move, it's vital that these offers align closely with both the retailer's proposition and the hobbies and interests of its customers.
Given the challenging conditions, retailers are looking for new ways to survive and thrive. They can't afford to rely on the traditional way of doing business. Research from analyst firm Forrester found that 85% of consumers buy from companies they have strong emotional connections with, and that they are likely to spend more because of this connection. As a result, we're seeing the customer experience growing in importance as a brand differentiator, set to overtake both product and price in the future.
With this in mind, it's vital that retailers look at the overall experience they offer and go beyond traditional customer insights – by being much more closely aligned with their customers with a much more emotional connection – to improve interactions, grow engagement and drive sales.
