How retailers can win over butterfly consumers.
For decades, the retail model worked: Open a store and consumers will come. Put a brand name or a logo on the item, and consumers will pay more.
But then two seemingly unconnected events shook up the long-trusted model.
“After the dark days of austerity, consumers began to lack brand loyalty.”
First came the iPhone, a novel telephone with a touchscreen. This hit the market as the financial markets were feeling pain. Then the collapse of Lehman Brothers ushered in a crisis that led to bank failures and millions of home foreclosures.
From the resulting dark days of austerity came a new type of consumer.
Generations prior had often been loyal to a particular brand. Now butterfly consumers – who moved seamlessly and swiftly from one brand to another – became the norm.
Combine that trend with the iPhone, and little did we know this device would drive a retail transformation.
Suddenly, customers were always connected and could broadcast from anywhere at any time. With a lack of brand loyalty, they didn’t mind posting negative reviews or complaining online.
The iPhone is a decade old. The financial crisis is long gone. But consumers remain changed. They are so quick to share negatives about a company socially. And even though the economy has improved, most shoppers remain price conscious.
But retailers can use this to their advantage by engaging with consumers. Consumers not only need to feel engaged with a brand, but they should have trust in it and feel that they are being listened to. Customer engagement leads to customer retention.
Research by Rosetta Consulting, for example, found that engaged customers are five times more likely to buy only from the same brand in the future.
“Engaged customers are five times more likely to buy only from the same brand in the future.”
They can also offer experiences. While the Baby Boomers gathered stuff and tended to value themselves based on things and status symbols, millennials and Generation Z value experiences. By the year 2020, customer experience will overtake price and product as the key brand differentiator, according to a Walker study.
Not convinced yet?
Consider this: 62 percent of companies view customer experience delivered by the contact centers as a competitive differentiator, according to Deloitte. Therefore, if retailers want customers to stay loyal, they have to invest in the experience.
As a result, Gartner predicts that by 2018, more than 50 percent of organizations will redirect their investments to customer experience innovations. What’s more, positive experiences will more likely be shared on social media, a win-win.
Driven by emotion
Why does this all matter?
Because we’re humans. And as humans, to an extent greater than we perhaps realize, we’re driven by emotion.
When we leave the house to go shopping, we may feel we have a conscious plan in our heads of what and where we are going, what we are going to purchase. But as soon as we shut that door behind us, psychologists will tell us that the majority of our decision making is driven by our subconscious mind.
And what better way to access that subconscious than by providing great experiences?
And while impulse merchandising and buying have been recognized for many years, now is the time to merge the physical with the digital to deliver an extraordinary, inspiring experience.
In a digital age where experienced is valued over experience, getting it right each and every time has never been more critical.
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