4 Ways Retailers Can Improve Customer Experience

Understanding consumer behavior is key to finding success

by Staff Written

August 12, 2016 at 1:59 pm

Another sign of the drastically changing retail landscape came when Macy’s announced yesterday it is closing 100 stores nationwide. It’s no secret brick-and-mortar stores have been struggling for the last few years. Trying to compete with retail disruptors and online powerhouses, such as Warby Parker and Amazon.com, has driven many retailers to a tipping point, which has included store closures, online expansions and a new way of thinking about the consumer-retailer relationship.

With consumers shifting their focus to brands that provide more than just an average shopping experience, the time has come for retailers to transform and invest in the individualized customer experience that is in such high demand. To dive deeper in to what this means for brands and consumers, we sat down with Todd Young, OMA’s director of behavior design.

Why is understanding consumer behavior critical to the retail industry today?

The reason why retail exists in the first place is to elicit a certain outcome, specifically getting people to spend money. When you want to induce this behavior, you first need to know who the person is you are trying to persuade. What motivates them? What discourages them? What scares them?

Having a pulse on where your customers derive pleasure, experience pain, and understanding what gives them hope or what causes fear is extremely valuable.

The next step to understanding customer behavior is knowing what a person’s scarcest resource might be. For example, a value brand like Walmart plays upon the fact that its customers’ scarcest resource is money, thus a constant reminder of its positioning, “Everyday Low Prices.” Now, a customer experience brand like Postmates, one that delivers a variety of food options to customers in a short amount of time, depends on consumers who’s scarcest resource is time.

These values are all relative and all equally important to that one particular individual, in turn making them equally as important to retailers.

Everyone in the retail industry seems to realize the importance of honing in on individualized customer experiences. Is there a good example of a company that has already reinvented their customer experience in this way? 

Spotify. The brand observes all behavioral data – from artist and genre, to the time of day when listening happens most – to consistently augmenting the UX from the Spotify into your Spotify. Over time, your playlists, curated recommendations and connections with friends create an experience so rich that the cost of abandonment far outweighs the monthly subscription fee.

What does the future look like for the consumer retail experience?

I’d characterize the future of retail by the evolution from broadcasting to narrow-casting. Or, about the destruction of typical marketing demographic targeting. No longer will brands attempt to cater to millennial moms or Gen X guys. Those persona-based profiles are a soon-to-be obsolete method for categorizing people for purposes of influencing them.

How will retailers create and add value for consumers?

Technology allows us to create cohorts of one, where we can parse explicit and implicit data to determine exactly what real, individual people do; what they like and where they spend their time, energy and money. Combining this information with tools like artificial intelligence and algorithmic technologies, we can curate experiences, recommendations and environments that are truly one-of-a-kind for each independent user.

August 12, 2016 at 1:59 pm

Staff Written