Why a unique customer experience should be the biggest priority for retailers

Recent Shopify research indicates that 93 per cent of Australian retailers consider customer experience as either important or critical for their business success. Shaun Broughton, Managing Director APAC at Shopify, explains why CX is so crucial.

This finding might not be surprising on its own, but when we took a deeper dive into the data, what we saw was that the most successful businesses — by revenue, longevity, and company size — were the ones that had overwhelmingly chosen customer experience as ‘critical’.

With many consumers now cutting back on discretionary spending, or at least being more discerning about where they spend their dollars, now is a crucial time for businesses to ramp up customer experience. Yet only slightly more than half (53 per cent) of retailers are planning to invest in customer experience over the next 12 months. This presents an opportunity for retailers who prioritise customer experience to gain an edge over the competition, increase customer loyalty and retention, and enhance profitability.

But first, let’s explore the elements of a differentiated customer experience.

The key components of a unique customer experience

When creating a unique customer experience, many retailers fall into the trap of putting the cart before the horse. Before adding in any elements of surprise and delight, retailers must first ensure they are meeting customers’ expectations.

Shopify’s Australian Retail Report found that when shopping in-store, consumers top expectations were knowledgeable (#1) and attentive (#3) staff, and enough stock of the items they wanted (#2). Two in five (40%) also expected stores to be able to issue instant refunds.

Australians’ expectations from an online store, on the other hand, were that it accepted all major cards (#1) and digital (#6) payments, special offers based on loyalty (#2), and multiple shipping options (#3). A separate study by BCG, found that providing customers with fast and convenient payment options such as Meta Pay, Amazon Pay, PayPal, Shop Pay, Apple Pay, and Google Pay can increase conversion rates by upwards of 50 per cent.

Once retailers have established these core elements, they can then consider ways to differentiate their customer experience to not only meet customer expectations but exceed them.

How prioritising customer experience can benefit a business

The majority (53 per cent) of Australian consumers stated that they would be loyal to brands that consistently offered low prices and/or promotions, according to our Australian Retail Report 2023. In another Shopify study, which focused on the Black Friday Cyber Monday (BFCM) shopping period, 70 per cent of Australians said they were more likely to shop during the BFCM weekend and upcoming peak sales moments to get more for their money, and 84 per cent of respondents said they will compare prices to see where the best deals and discounts are.

But offering low prices is not something that all businesses can prioritise, especially if they don’t have the sales volume to support it. In addition, consistently discounting in order to win over price-conscious consumers can have adverse effects on brand and profitability.

Retailers should take a look at their customer journey, and identify the key touchpoints their target consumers value most. By prioritising the elements of customer experience most important to their customers, businesses can win over hearts and minds both effectively and efficiently. 

Taking measures to differentiate and enhance customer experience can help retailers build a loyal customer base, and prevent customer churn due to reasons such as price. The longer a customer remains loyal, the more opportunities they have to not only purchase, but also refer new potential customers. Unsurprisingly, the Australian Retail Report found word of mouth was still the primary way consumers discovered new brands.

Even small improvements in customer retention can generate increases in profit, and brand-loyal customers often become brand ambassadors, more likely than other customers to refer new customers to businesses, thereby increasing the size of the customer base.

The role technology can play in crafting a unique experience

Australians are split on whether they prefer online (38 per cent) or in store (31 per cent) shopping — with another 31 per cent sitting on the fence. By leveraging a single commerce platform, businesses can deliver a better omnichannel shopping experience and capture as many consumers as possible.

Beyond the core commerce infrastructure, emerging technologies, such as AI, can be used to deliver an enhanced customer experience, and attract greater wallet-share.  In a recent study, we found that Australians who planned to spend over $855 this BFCM this year were significantly more likely than the average shopper to use chatbots (+123 per cent). As mentioned earlier, Australians do also appreciate attentive customer service, but given the 24/7 nature of ecommerce, providing instantaneous human customer support is not always possible.

Tools like Shopify Magic can quickly respond to live chat enquiries and drive conversions without human interaction. The trick is to find the right balance between technological features and human touchpoints.

Ramping up customer experience during times of reduced consumer spending can help retailers differentiate themselves, enhance brand loyalty, increase lifetime value, and drive word-of-mouth marketing — each of which can have a direct impact on a retailer’s profitability and long-term success.

Want more? Get our newsletter delivered straight to your inbox! Follow Kochie’s Business Builders on Facebook, Twitter, Instagram, and LinkedIn.