By Anastasia Lloyd-Wallis
Chief Operating Officer and Head of Consumer Insights, Retail Doctor Group
Customer Engagement: Pre-, During-, and Post-Purchase
The Australian consumers’ needs are changing.
Pessimism is on the rise. Though not yet alarming, pessimism is fueled by wars and conflict elsewhere in the world, by the ongoing Covid-19 threat, and the heightened global economic recession.
Optimism is also on the rise. And although consumers are somewhat cautious about it, the rise of optimistic spending trends has increased, along with shoptimism and renewed out-of-home activity and spending. These trends are complemented by the steady rise of the importance of personalisation and stories in brand and channel loyalty, the phenomenal increase in omnichannel platforms and touchpoints, and a somewhat more-mindful consumer.
About the Emerging Australian Consumer
Emerging Australian consumers are a diverse group of people who are shaping the future of the retail landscape down under. Where Generation Y (Millennials, born 1981-1996) had most of the buying power until the early-to-mid 2010’s, their children (Generation Z, born 1997-2012) have begun earning a living and are looking for ways to make meaningful purchases.
But this is where it starts getting interesting… Generation Alpha – born sometime between 2013 and 2027 – are set to be the generation with the most powerful of all buying powers. They’re living in a world where their parents are more digitally savvy, more socially conscious, and more demanding than previous generations of consumers.
Their parents are also more likely to be influenced by peers and social media. They’re also more likely to be influenced by trends and technological advances that enhance their children’s lives.
These parents are Gen Zs (or Zoomers). They are comfortable shopping online and using mobile devices to research products and make purchases. They also expect retailers to offer a seamless and personalised shopping experience across multiple channels – known as omnipresent retail – because they’re starved for time and prefer to have all their spare time taken up by meaningful activities and pastimes.
They’re socially conscious, choosing brands that align with their values, such as those that are sustainable or ethical. They’re demanding enough to expect high-quality products and services at a fair price, and are quite willing to switch brands if they aren’t satisfied with their experience.
But best of all, they’re teaching the next generation – the emerging consumer – how to have exacting standards, what to shop for, and what to demand on a service level. And… they’re showing their children how to have even less time for frivolous nonsense than they ever did.
Retailers who are able to understand and cater to these emerging needs will be well-positioned for success in the future.
Consumers and their Omnichannel Experiences
Digital consumer engagement remains a constant in consumers’ omnichannel experiences, and has been since 2022. In fact, 2 out of every 3 customers state they have interacted with a retailer’s omnichannel tools in the last 12 months.
That said, of the 5 omnichannel tools used or tried in the last year, only one shows any real growth in interest. Consumers continue to demand personalised product recommendations. Consumers want to be treated as individuals.
Retail Concepts used in last 12 months
3 in 4 of Gen Z consumers have used click and collect services in the last 12 months, with Gen Z consumers also leading the demand for subscription services.
While the younger generations may have all the omnichannel buying power and technical know-how out there, it’s still the older generations who top the charts in-store. Retailers with an ageing audience demographic can cultivate trust and loyalty by sharing knowledge, teaching users how to use their apps, and showing them what omnichannel options are available to them.
To speak the language of the older generations, retailers must focus on:
- the safety and security aspects of having foods and medicines delivered
- the convenience of not having to carry heavy bags all alone
- the immense vehicle, fuel, wear-and-tear, and parking cost savings in paying one delivery fee
- and personalisation options, such as repeat orders of favourited items or prescription medicines.
Instore Customer Service
Friendly staff is of #1 importance when visiting in-store. More and more, consumers are looking for educated staff who are knowledgeable, helpful, and genuinely interested in the consumers’ needs. In other words, they’re not just offering to help so they can sell a product.
However we can see that different consumer Limbic Insights™ personalities* are looking for different forms of customer service in-store:
- 69% of all Harmonisers want to be assisted by friendly staff.
- 64% of all Adventurers want their questions answered in a knowledgeable way.
- 50% of all Hedonists need help to find the specific product they’re looking for.
*For more information on Limbic Insights™ see blog XXXX – Sophie please link to a relevant Limbic Blog.
Worth noting is that more than half of those polled want to be assisted by a human on their terms, with some even preferring digital help channels to human assistance.
Retailer Focus on the Customer
When asked to what extent retailers felt their company’s current operation was ‘customer-focused’, e.g. by deploying customer metrics and understanding feedback for continuous improvement, 60% of Australian retailers felt that they were ‘on the ball’ with their customer focus strategies. This result is significantly higher than retailers worldwide (45%).
However, one third of Australian retailers (34%) couldn’t really decide if their customer focus strategies were in the right place, almost mirroring retailers around the world (35%). One in every five retailers (19%) polled around the world felt that their customer focus strategies were not in place, three times as much as Australian retailers (6%) with the same answer.
Customer-Focused Capabilities
Gartner defines customer centricity as the customer being “the focal point of all decisions related to delivering products, services and experiences to create customer satisfaction, loyalty and advocacy”.
According to SuperOffice customer-centricity as a business strategy means “putting your customer first and at the core of your business in order to provide a positive experience and build long-term relationships”.
Customer-centricity focuses on providing the customer with a positive experience, pre-sale, during the sales process, and post-sale.
Source: SuperOffice: How to Create a Customer-Centric Strategy
The results from RDG’s 2023 Consumer and Global Retailer Sentiment Survey indicate that CRM & loyalty programs are the primary capabilities that retailers, both in Australia (69%) and around the world (73%), are focusing on to enhance the customer experience. Actually, RDG survey brought some interesting facts to light:
Australian retailers are less inclined to use the data right there at their fingertips than their global counterparts do! Of the customer-centric capability-related categorical questions asked of retailers, 5-in-7 categories scored remarkably lower for Australian retailers when compared to global retailers’ capabilities.
Australians are either hesitant to use the data, don’t know that they are able to, or just don’t understand the importance of using it.
Personalised marketing is a marketing strategy that connects target audiences and existing customers to personalised shopping experiences. It delivers individualised marketing messages based on patterns of buying behaviours in existing customers, and projected patterns of buying behaviour in potential customers.
Personalised marketing is therefore a persona-based approach to managing segments of your customer base in a unique and personal way. It is also one of the best marketing tools for brands who wish to speak directly to loyal customers.
Yet only 44% of Australian retailers are currently working on (or planning to work on) personalised marketing strategies. The figures for retailers worldwide aren’t much higher (63%), despite evidential research by RDG Insights Division as well as McKinsey, Gartner, Deloitte, Statista, and many more research firms that personalisation is one of the most influential drivers of brand loyalty.
The same trend holds true for Australian retailers in terms of other customer-centric capabilities, like:
- customer-focused metrics (41% Aus vs 63% global)
- customer-focused management (34% Aus vs 62% global)
- customer-focused segmentation and profiling (31% Aus vs 43% global)
- and customer-focused leadership (22% Aus vs 45% global)
If retailers are to provide a better experience for their customers, while also driving engagement and loyalty, they will need to focus much more on the data management side of their customer-focused capabilities than they have been doing of late. Statistically, it’s clear that global retailers consider data to be more important to brand loyalty than their Australian counterparts do.
Retail Loyalty Consumer Sentiment
Loyalty programs have a lower influence on consumers than they did in 2020/2021.
1-in-4 shoppers are reportedly not influenced at all by loyalty programs, while 1-in-10 shoppers are not members of any loyalty program.
Retailers will need to fine-tune their offers to be even more personalised and targeted to their ideal consumer segments and shopper emotions than ever before if they expect their brand to remain relevant in this fiercely-competitive space. Using the data means that retailers will have to look at consumer personalities to understand just why their customers are loyal to them.
Retail Doctor Group’s Limbic Insights™ – Neuroscientific Consumer Personality Profiling division utilises neuroscience to assist with creating personalised loyalty offers for your highest value customers. Click here for more information.
Next Steps for Retailers
Consumers are more engaged than ever before and continue to interact with retailers across several channels. They are seeking increased personalization in exchange for their loyalty. It is no longer “one size fits all” in their journeys with brands and they seek out brands that can offer a differentiated experience.
Customer-focused has become the new retail buzzword, however how many retailers are making noticeable changes? Loyalty programs are of #1 focus for retailers everywhere, creating an engaging and stand-out experience for their most important consumers.
RDG Recommendations
- Loyalty is personal to every consumer and it cannot be a blanket approach of points and discounts.
- Understanding the emotional drivers of your consumers in their everyday life will allow you to determine “why” they are loyal.
To download the RDG Retailer and Consumer Sentiment 2023 – Click here.
Want to know more about what’s on your consumer’s minds? Schedule an appointment with our Insights division by e-mailing us at businessfitness@retaildoctor.com.au or calling 02 9460 2882.