A 5 Part Series
- Chapter 1: Digital Elevates Physical Shopping
- Chapter 2: Stores Become Experience Differentiators
- Chapter 3: Intelligent Insights Spark Personalized Engagement
- Chapter 4: Excellent Customer Service is Table Stakes for Shoppers
- Chapter 5: Retailers See Increasing Value in Loyalty Program Data
In today’s fiercely competitive retail landscape, providing excellent customer service isn’t merely a business nicety; it has become a necessity. How retailers engage with their customers can make all the difference between building a loyal customer base and losing them to rivals.
Insights into the trends of the behaviors of shoppers and decision-makers in the retail industry highlight the effects of excellent service. Companies that utilize digital advancements and leverage customer data can tailor experiences to unique shopper needs and preferences.
In this article, we will delve into the influence of customer service on shopper loyalty. We will also discuss the evolving expectations of today’s consumers, who increasingly demand exceptional service, both online and offline.
Bad Service Erodes Loyalty
Poor customer service can harm a retailer’s reputation and bottom line significantly. It’s the retail experience that 53% of consumers dread the most. What’s more, a staggering 74% of shoppers admit they would abandon a brand after just three unpleasant service encounters.
These statistics underscore the vital role of retailers to deliver customer service as consistently and exceptionally as possible to foster brand loyalty. It draws the line between losing business and retaining new and existing customers.
Factors Contributing to a Poor Shopper Experience
A closer look at the elements that contribute to a negative shopping experience can give more insights into the importance of good customer service. The following percentages come from extensive Salesforce research, which involved survey results of 2,400 shoppers and 1,125 retail industry decision-makers:
Poor Customer Service
Inadequate customer service, ranked at the top with 53%, encompasses issues such as unhelpful staff, slow response times, and a lack of personalized assistance. Shoppers value prompt, friendly, and knowledgeable support. When this is lacking, it can lead to frustration and a reluctance to return.
Receiving damaged products, which accounts for 48%, can result from poor packaging, mishandling during shipping, or inadequate quality control. Such incidents not only disappoint customers but also erode their trust in the retailer’s ability to provide quality goods.
Out-of-stock products, at 26%, can be particularly frustrating for customers who have specific items in mind. When shoppers cannot find what they are looking for, they may turn to competitors who can better meet their needs.
A challenging return process or poor return experience, with a 24% rating, includes difficulties such as unclear return policies, restocking fees, or lengthy processing times. These obstacles can deter customers from making future purchases, as the convenience of easy returns becomes a key consideration.
Long checkout lines, accounting for 23%, can lead to frustration, especially during peak shopping times. Retailers need to optimize their checkout processes to ensure a smooth and efficient experience for their customers.
Having to pay for returns, at 21%, can be an unexpected expense that turns customers away. The additional cost of returning an item may discourage shoppers from making purchases, particularly when they are unsure about their selections.
Similarly, having to pay for shipping, with a 16% rating, may deter customers from completing their purchases, especially when they have come to expect free or discounted shipping from many online retailers.
Limited Product Variety
A limited assortment of products, at 13%, may not cater to the diverse needs and preferences of customers. Shoppers appreciate a wide selection that allows them to find exactly what they need, and a limited product range can lead them to explore other retailers.
For 8% of shoppers, environmentally unsustainable practices by retailers can be a deal-breaker. As environmental awareness grows, retailers should consider sustainable sourcing, packaging, and practices to retain eco-conscious customers.
Lack of Personalization
Lastly, 5% of shoppers seek personalized experiences and products. They appreciate tailored recommendations and offers that match their preferences and past shopping behavior. Retailers that fail to provide this level of personalization may lose out on these discerning customers.
Shoppers Expect Superior Service Everywhere
In the era of e-commerce and online shopping, practical perks like free shipping, participation in loyalty programs, and hassle-free returns have become essential prerequisites for attracting and retaining shoppers. However, retailers face a dilemma, with 88% of them planning to implement stricter returns policies.
One might ask, how can retailers maintain loyalty while making these changes? Based on shopper responses, diverse product offerings, access to exclusive events, and promotions are some of the factors that can bridge the gap and keep customers engaged.
Shoppers Seek Practical Benefits
In today’s highly competitive retail landscape, shoppers are not just looking for products; they are seeking a complete shopping experience that offers practical benefits. Let’s take a closer look at the factors that drive shoppers’ preferences:
The expectation of free shipping has become ingrained in the modern shopping psyche. Beyond mere convenience, it signifies cost savings for shoppers. Retailers offering free shipping are seen as more customer-friendly, as this perk reduces the total cost of a purchase.
Loyalty or Rewards Programs
Loyalty programs have evolved from punch cards to sophisticated systems that reward customers for their continued patronage. Shoppers are increasingly drawn to retailers with loyalty programs that offer tangible benefits, such as discounts, exclusive access, or early sales notifications.
Simple and Free Returns
The ease of returning a product can significantly influence a shopper’s decision to make a purchase. Retailers that offer a hassle-free return process, including pre-paid return labels, inspire confidence in their customers. This convenience demonstrates a commitment to customer satisfaction, reassuring shoppers that their post-purchase experience is equally essential.
Wide Product Variety
A diverse product range speaks to shoppers with varying needs and preferences. Retailers with extensive product offerings can cater to a broader customer base. This diversity enables shoppers to explore different options, fostering a sense of exploration and discovery during their shopping journey.
Exclusive Shopping Events
Access to exclusive shopping events and promotions adds an extra layer of excitement to the shopping experience. Shoppers appreciate the feeling of being part of a select group, gaining early access to sales, limited-edition products, or VIP events.
Sustainable Business Practices
As environmental consciousness grows, shoppers are increasingly concerned about the environmental impact of their purchases. Retailers that adopt sustainable business practices, such as eco-friendly packaging, responsible sourcing, and carbon-neutral initiatives, align with the values of eco-conscious consumers.
Service Is the Top Differentiator for Shoppers
What sets apart your favorite brands? While product quality and price matter, the key distinguishing factor for shoppers’ favorite brands is excellent customer service. It’s the key factor that sets apart shoppers’ favorite brands and retailers.
Provides Great Customer Service
Shoppers’ favorite brands consistently provide excellent customer service. This extends beyond just resolving issues promptly; it encompasses creating positive interactions at every touchpoint. Friendly, knowledgeable, and attentive customer service representatives leave a lasting impression on customers.
Has Easy Returns Process
Offering a seamless and straightforward return process is an integral part of excellent customer service for shoppers. They are more likely to return to retailers that make returns hassle-free, eliminating the stress and uncertainty often associated with product returns.
Offers a Loyalty Program
Loyalty programs are not merely a marketing gimmick; they are a testament to a retailer’s commitment to rewarding customer loyalty. Retailers that offer compelling loyalty programs build a community of devoted customers who feel appreciated and valued.
Offers Exclusive Shopping Experiences and Promotions
Retailers that go the extra mile to offer exclusive shopping events, early access to promotions, or personalized discounts cater to shoppers’ desire for special treatment. These experiences make customers feel like VIPs, strengthening their bond with the brand.
Caters to Unique Needs
Personalization is a cornerstone of excellent customer service for shoppers. They appreciate retailers that understand their unique needs and preferences. Whether it’s tailored product recommendations or personalized communication, retailers that cater to individual tastes stand out in the eyes of their customers as they deliver customer service that meets their standards.
Service Goes Digital, But Voice Still Matters
In an increasingly digital world, consumers are more likely to turn to digital channels when they have questions or complaints. Email, chat, social media, and text messaging have gained prominence as customer service channels, with 57% of shoppers preferring these digital customer service channels.
However, it is crucial to note that when an issue is particularly complex, 81% of service professionals still consider the phone as the preferred channel for customer interactions. This preference for voice support from a human customer service representative underscores the importance of offering a diverse range of customer service options to cater to varying needs.
Retailers Leverage Digital Channels for Service
Recognizing the shift in consumer preferences, retailers have adapted by integrating digital channels into their customer service strategies. This adaptation is evident in how they utilize a variety of digital channels to enhance the customer experience. Let’s delve into the importance of these digital channels:
Email has established itself as a reliable and efficient means of customer communication. Retailers use email not only for marketing campaigns but also as a channel to address customer inquiries, resolve issues, and provide order updates.
The phone remains a fundamental and trusted customer service channel. When customers encounter complex issues or require immediate assistance, they often prefer speaking directly to a human representative.
While online shopping dominates, in-person interactions remain crucial for specific retail sectors, such as brick-and-mortar stores and service centers. Face-to-face interactions allow for a personalized touch that can be challenging to replicate digitally.
Online Chat or Live Support Website
Live chat functionality on websites has gained popularity due to its real-time nature. It allows customers to seek immediate assistance during their online shopping journey. Retailers deploy chatbots or a human customer service team to provide guidance, answer questions, and promptly resolve issues.
Social media platforms have evolved into powerful channels for customer service. Customers turn to platforms like Twitter and Facebook to voice concerns or seek assistance. Retailers actively monitor their social media profiles, responding to inquiries, addressing issues, and even processing orders directly through these platforms.
Text or SMS
Text messaging offers a convenient and familiar way to engage with customers. Retailers use SMS to send order updates, delivery notifications, and even promotional offers. It’s an unobtrusive channel that allows customers to receive essential information without the need for dedicated apps or email checking.
Customer portals provide a centralized platform where customers can access their account information, order history, and support resources. Retailers invest in user-friendly portals that empower customers to manage their interactions independently, from tracking orders to initiating returns.
Mobile apps have become extensions of the brand experience. Retailers offer feature-rich mobile apps that enable customers to browse products, make purchases, and access customer support on the go. Apps often include in-app chat support, further enhancing the convenience of mobile shopping.
Knowledge bases or FAQ sections on websites serve as self-service resources for customers. These repositories contain articles, guides, and troubleshooting information that empower customers to find answers to common questions and resolve issues independently.
Retailers provide online forms for customers to submit specific inquiries or requests. These forms streamline the communication process, ensuring that customers provide essential details upfront, and enabling quicker issue resolution.
Messenger apps like WhatsApp and Facebook Messenger offer additional avenues for customer engagement. Retailers extend their reach by offering customer support through these widely used messaging platforms, accommodating customers’ preferences for real-time communication.
Online Communities or Discussion Forums
Some retailers foster online communities or discussion forums where customers can engage with one another and with brand representatives. These spaces facilitate peer-to-peer support, product discussions, and feedback sharing.
Video support options, such as video chat or video tutorials, offer a more visual and interactive approach to customer service. Retailers use video to demonstrate product features, walk customers through troubleshooting steps, and even provide virtual consultations.
AI Streamlines Service
Retailers are under immense pressure to efficiently scale their customer service operations as they face rising case volumes and increasing customer demands. To meet these challenges head-on, service organizations are increasingly turning to the capabilities of artificial intelligence (AI). In fact, 88% of service decision-makers have reported an uptick in their use of AI in recent times.
Retailers See Possibilities in Generative AI for Service
Generative AI, with its transformative potential, stands out as a beacon of hope for service organizations seeking to streamline their operations. Retailers are now exploring the possibilities of generative AI in several critical areas, including:
1. Generate personalized responses for agents: Using generative AI to draft personalized responses to shopper inquiries can significantly enhance the customer service experience.
2. Empower chatbots for service: Generative AI can empower chatbots to engage with customers more effectively, providing quicker and more accurate assistance.
3. Automate the creation of knowledge base articles: By automating the creation of knowledge articles, retailers can ensure that both customers and service professionals have access to up-to-date information.
4. Create summaries of customer service cases: Generative AI can assist in summarizing complex customer service cases, enabling service professionals to make informed decisions more efficiently.
As these points indicate, retailers are not only using generative AI but also actively evaluating its potential to improve customer service for shoppers.
The Bottom Line
In a retail landscape characterized by relentless change, excellent customer service has transitioned from being a mere add-on to a business imperative. Retailers must prioritize customer service, address key pain points, and adapt to evolving shopper expectations to remain competitive.
Leveraging digital channels and embracing emerging technologies like generative AI can help retailers provide the exceptional service that today’s customers demand. By doing so, they can build shopper loyalty and secure their position as industry leaders. As the retail world continues to evolve, excellent customer service will remain the cornerstone of lasting success.
Read the full 2023 Connected Shoppers’ Report available on the Salesforce website for more information and insights into the best marketing practices.
If you need assistance or have questions about marketing your business, feel free to reach out to the PERC Digital Marketing team. We’re standing by to help your business navigate the industry’s ever-changing trends. Contact us today.