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July 22, 2024
Ever wonder why your customers seem to have one foot out the door?
The current retail market is hyper-competitive, and it is a no-brainer that meeting customer needs is not enough. Hence, it's crucial to cultivate sustainable customer relationships, earn their loyalty, and deliver your offerings in an irresistible package.
This evolution is encapsulated in the rise of experiential shopping, where the shopping journey becomes an event. For CX leaders, CEOs, and top-level customer experience experts like you, integrating experiential elements into your omnichannel customer experience strategy is not just an untapped opportunity anymore—it's a necessity.
You must create digital and physical environments that are not merely places to buy but to experience, explore, and enjoy!
Experiential shopping isn't just a trend; it's a seismic shift in how consumers are communicating with brands. Today's consumers, particularly millennials and Gen Z, crave meaningful connections and unique experiences beyond mere transactions. They demand that their retail journey be immersive, interactive, and memorable. And this shift is driving retailers to blend experiential shopping with their omnichannel strategies, creating a cohesive and compelling customer journey.
An omnichannel customer experience allows your customers to interact with your brand across multiple channels—online and offline—in a unified and consistent manner.
This means that whether they shop in-store, browse online, use a mobile app, or interact via social media, they receive a cohesive, uninterrupted, and personalized experience.
However, implementing an omnichannel strategy has its challenges. It requires significant investment in tech and infrastructure, a unified vision across departments, and continuous cx data monitoring and adaptation. Since the benefits far outweigh the costs, it is a worthwhile endeavor for forward-thinking retailers and leaders.
Discover how some leading global retail brands are leveraging multi-channel cx strategies.
"AR is the next big thing that will pervade our entire lives." - Tim Cook, Apple CEO
AR or Augmented Reality and VR or Virtual Reality transform customer interactions across channels. Retail giants like IKEA and Sephora leverage AR to enhance their mobile apps, allowing customers to visualize products in their own spaces. This not only bridges the gap between online and in-store shopping but also significantly improves the customer experience.
A study by Retail Perceptions highlights that 61% of retail shoppers prefer to buy from stores that offer AR experiences, and 40% are willing to pay more for a product if they can experience it through AR.
Physical stores are evolving into experiential hubs where customers can engage with products in novel ways.
Nike By You: Easy online customization using AI Technology
Nike's flagship stores, for example, feature customization stations where customers can design their own sneakers. Additionally, pop-up shops and in-store events, such as live demonstrations and workshops, drive more foot traffic and provide unique, hands-on experiences. These strategies not only attract customers but also foster deeper brand loyalty.
According to a McKinsey report, 70% of purchase experiences are based on how you treat your customers and what they feel about it. Creating interactive and personalized in-store and online experiences can significantly enhance customer satisfaction and market presence, leading to better conversion rates and more repeat business.
Personalization is at the core of experiential shopping. Retailers are using advanced data analytics to understand customer preferences and tailor experiences accordingly.
As Amazon's Jeff Bezos puts it, "We see our customers as invited guests to a party, and we are the hosts."
You can create a memorable customer journey by offering personalized recommendations, targeted promotions, and customized in-store services. Nordstrom, for instance, uses customer data to provide personalized online and in-store shopping experiences using technology (such as virtual stylists and tailored product recommendations). This ensures a consistent and delightful experience across all touchpoints.
In fact, 80% of consumers are more likely to make a purchase when brands offer personalized experiences (Epsilon). Additionally, personalized marketing can deliver five to eight times the return on investment and lift sales by 10% or more (Deloitte).
Did you know companies that excel at omnichannel engagement retain 89% of their customers, compared to 33% for companies with weak omnichannel strategies?
Hence, creating a unified brand experience across all channels is crucial for effective omnichannel cx strategies. Retailers like you must ensure that your online and offline presence complement each other.
Offer click-and-collect services, where customers order online and pick up in-store to offer more convenience and drive in-store traffic. Further, integrate your mobile app with in-store experiences to help customers transition smoothly between digital and physical interactions.
With advancing technology, seamless channel integration is more than just a convenience; it’s the only strategic way. After all, omnichannel customers spend an average of 4% more on every shopping occasion in the store and 10% more online than single-channel customers.
High-quality, engaging content is vital for experiential shopping. Many retailers are investing in immersive digital content that narrates a story and connects with customers emotionally. That’s why virtual store tours, interactive product videos, and engaging social media campaigns are becoming standard.
Glossier, for example, uses storytelling and user-generated content to curate a sense of community and enhance the shopping experience.
The effectiveness of immersive digital content lies in its ability to capture and hold the consumer's attention. A report by Demand Metric found that content marketing costs 62% less than traditional marketing and generates about three times as many leads (impressive, right?)
By capturing customers' attention and keeping them engaged, brands can foster longer, more meaningful interactions. This engagement boost results in higher conversion rates and repeat business. Studies have shown that highly engaged customers represent a 23% premium in share of profitability, wallet, relationship growth, and revenue in comparison to the average customer.
As Richard Branson, founder of Virgin Group, puts it, "The key is to set realistic customer expectations, and then not just meet them but exceed them—preferably in unexpected and helpful ways."
Offering an experiential shopping experience can set you apart in a crowded market. By crafting unique and memorable experiences, brands can differentiate themselves and attract loyal customers. This differentiation is critical in maintaining a competitive edge.
Differentiation through experiential shopping also has a direct impact on brand perception. A report by PwC found that 73% of people consider customer experience a deciding factor in their shopping journey, yet only 49% of U.S. customers say companies provide an excellent customer experience.
This gap presents a significant opportunity for retailers to stand out by investing in experiential shopping.
Loyal and engaged customers usually spend more over their lifetime. By creating positive and memorable experiences, retailers can improve customer lifetime value and drive long-term growth. The financial impact of increasing customer lifetime value is substantial!
Bain & Company conducted a study analyzing the costs and revenues associated with serving customers throughout their purchasing life cycle. The study found that increasing customer retention rates by 5% can substantially boost profits, ranging from 25% to 95%.
The future of retail is experiential, and those who lead this charge will be the architects of tomorrow's most successful and beloved brands.
But, leading the charge into this new era requires more than strategic thinking—it demands a commitment to refine how you engage with customers. It's about transforming every interaction into an opportunity for delight, every experience into a story worth sharing, and every customer into a loyal advocate.
Lastly, remember that the human touch remains irreplaceable. Personal connections will set your brand apart in a world increasingly driven by technology. Exceptional customer service, personalized interactions, and genuine care will forge emotional bonds that technology alone cannot achieve.
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