How Covid-19 changed loyalty and what marketers can do about it
Kristina: How has customer loyalty changed since the world went on lockdown in March of 2020?
Kelli Harrison, VP, Account Management, Retail, Sitel Group: The pandemic has significantly changed consumer buying behavior and customer experience (CX) needs. This has been particularly true for the retail industry as ecommerce sales in 2020 were up 32.4% from 2019. The pandemic and lockdowns have accelerated digital CX and forced retail brands to be more present through chat, mobile app, social media and self-service channels. This means brands are connecting to customers in new ways, and customers have new expectations – searching for experiences to make up for the lack of face-to-face interaction. For example, 54% of American consumers found that curbside pickup and online ordering most improved their customer experience during the pandemic.
Kristina: What does that mean for brands’ customer loyalty strategy?
Kelli: Consumers are looking for convenient and fast customer experiences during the pandemic era and beyond. More than a third (35%) of all consumers- and 42% of millennials and Gen Zs – prefer to resolve their issues on their own with self-service options, and more than half (53%) of those consumers say it’s because the self-service option is faster. Since superior customer experience is a major driver of brand loyalty, retail brands should consider how to revamp their self-service strategy to create easy and quick experiences for their customers.
Additionally, increasing brand loyalty through CX relies on a seamless omnichannel experience. When a customer begins their journey with a retail brand through a chatbot or social media request, it’s critical that they can then move to another channel, such an email or voice, to resolve their issue without having to start the process over completely. As you can imagine, having to repeat information multiple times can be extremely frustrating for consumers and lead to lower brand loyalty, with three in four consumers expecting to be able to pick up their experience where they left off.
Kristina: Now that vaccines are out and more places are opening up, can brands return to pre-COVID strategies?
Kelli: While some elements of pre-pandemic life will return once more consumers are vaccinated, there are some areas that undeniably changed long-term. More than half (57%) of consumers who started shopping online due to the pandemic plan to keep doing so beyond the pandemic. Additionally, new technology like conversational AI, intelligent automation, augmented reality (AR) and virtual reality (VR), which have greatly accelerated during the pandemic, should not be reversed given the value they provide to both brands and consumers. In fact, 27% of consumers thought the retail industry was the most innovative when it came to the use of technology during the pandemic (compared to 16% prior to the pandemic). New technologies have also heightened consumer expectations for experiences with brands, and there’s no going back. This shift means that brands cannot return to pre-pandemic CX strategies to drive customer loyalty in a post-pandemic world.
Kristina: How is consumers’ increasing time spent in the digital space impacting loyalty strategies?
Kelli: This is certainly a major consideration for most brands as we move beyond the pandemic. The increasing time spent on digital will likely not change significantly when the pandemic ends. So, brands should consider it a more permanent change and get on board if they are not already. We know this is true for retail brands specifically, as e-commerce is here to stay and digital methods of shopping such as click and collect grew 106.9% in sales in 2020, and it is expected to increase another 15.2% in 2021. Integrating technology such as data analytics, AI/machine learning, and predictive analytics can provide retail brands with customer data that allows them to adapt their strategy specifically to their target audience and current customer base.
On the customer experience side, brands should also consider investing in technology that helps their human agents (whether via voice or chat) provide superior customer service. More than more than four in five (87%) consumers still want to talk to a human being (whether via email, chat or phone) to resolve critical issues. Technologies like speech analytics and robotic process automation (RPA) provide agents with the ability to better understand their customers faster and provide efficient service – a must in the CX industry.
Kristina: Is there a need for brand strategies to be friction-free, i.e. seamlessly crossing from in-store to desktop to mobile?
Kelli: This need for a seamless omnichannel experience is absolutely crucial moving forward post-pandemic. We’ve seen this need already among digital channels and voice, but it will certainly expand further into in-person experiences as the world opens back up – especially for retail brands as visiting brick-and-mortar stores gain popularity again. The consumer frustration of constantly needing to repeat information when changing channels or platforms will eventually drive them away from brands that do not provide a seamless experience. For example, a consumer who is looking to pick up an order in-store may want to order the item online via the website, then use their mobile app to confirm the order and scan a code with a cashier in the store for an easy in-person experience. If there is friction between any of these steps, it could cause customer frustration.
Kristina: How can brands ensure their loyalty strategy is strong as we head toward the second half of 2021?
Kelli: A strong strategy relies on the right combination of technology and the human touch. Many retail brands have troves of consumer data that are not used to their fullest extent and thus do not provide as much strategic value. Understanding the shopper journey for the specific brand and leveraging data to understand how customers prefer to interact can uncover inefficiencies or areas where issues could be better solved by technology versus a human being (or vice versa). This deeper understanding of customer needs is critical in maintaining and growing customer loyalty for retail brands moving into the second half of the year and beyond.