It only takes three bad experiences for a customer to abandon a brand – Connected Shoppers report

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It only takes three bad experiences for a customer to abandon a brand – Connected Shoppers report

74% of consumers say it only takes up to three bad experiences with a brand for them to abandon it. This is one of the key findings of the fifth edition of the Connected Shoppers report. Despite the difficult times and still uncertain economic situation, retailers can prevent such cases. They just need to be mindful of a few issues that are included in the report – we present them for you in this post.

Combining online and offline channels with AI in the background

Digital technology is becoming an integral part of the in-store shopping process: 60% of consumers say they have used mobile devices there to search and compare product prices, scan a QR code or make a payment with Scan&Go. Customers are also interacting with store staff who use mobile devices, for example, to check if a product is in stock, finalize a transaction or answer a question.

This trend is also a result of the spread of generative AI. It helps consumers search for products, get recommendations and get inspired – 17% of them admit that they have used generative AI to find inspiration to buy a product. Retailers are also benefiting from its advantages, with as many as 92% saying they are investing in AI to improve their customers’ shopping experience.

Nearly 60% of retailers use AI to present recommended products to customers in-store. And when it comes to online channels, most retailers are using generative AI to create a digital assistant to help find the right products for online shoppers.

Customers expect retailers to be very flexible when it comes to contact channels. They want to make purchases in places where they spend a lot of time every day: on social media, messaging apps or live streaming services. This trend is called „shopping at the edge” – customers are starting (and increasingly ending) their shopping path outside the physical and digital space of the store.

The customer journey now often begins on social media – already half of consumers are discovering new products there. In two years, the number of people finalizing transactions directly on social media has almost quadrupled (from 15% in 2021 to 59% in 2023). Equally dynamic growth has been observed in the case of purchases made through messaging apps such as Messenger and WeChat. In this case, 36% of consumers have already decided to make a purchase, compared to 11% in 2021 – an increase of as much as 227%.

Physical stores are becoming a differentiating factor in the experience

Physical stores continue to be key in increasing shopper engagement. More and more retailers are reminding customers of the benefits of visiting a store in person. They are beginning to prioritize additional services and experiences that differentiate their outlets from the competition. From personal shopping to organizing events with exclusive products and offers, such activities build loyalty and allow customers to feel recognized, understood and, above all, appreciated.

As the role of physical stores changes, so do the responsibilities of employees. Nearly three-quarters of their working time is now spent on non-cash register activities. Helping shoppers sign up for loyalty programs, posting on social media, handling customer inquiries, processing online orders and last-mile delivery have become part of the responsibilities of physical store employees.

Customers are increasingly using stores as fulfillment centers. 57% bought a product online and picked it up in a store, and 53% went to a store to return a product. The number of consumers who returned a product in-store has increased by 13% since 2021. In 2023, already 64% of retailers offered the option to return online purchases at a stationary outlet, and 58% the option to buy online, pick up in store.

Intelligent insights help spark personalized engagement

Customers expect companies to understand their unique needs and expectations. One-size-fits-all communication is no longer enough to attract their attention. That’s why its personalization is a top priority, with 93% of retailers surveyed saying they are investing more in it than ever before. Within two years, the percentage of retailers that claim a full ability to use customer data to personalize customer engagement has risen from 32% in 2021 to 57% in 2023.

However, there is still room for improvement for many retailers. 59% of consumers surveyed believe that marketing, e-commerce and service functions are being handled by different systems at retailers. And 83% of customers are more loyal to companies that provide consistent interactions between departments.

Generative artificial intelligence can help retailers more effectively capture consumers’ attention while saving time and money. This is especially true when it comes to quickly creating content for display ads, social media or mailings.

Excellent customer service is key for customers

Nothing discourages customers from a brand or store more than bad service – 53% of consumers say that poor customer service is the worst retail experience. Moreover, as we mentioned in the introduction, 74% say they will abandon a brand after up to three bad experiences. However, excellent service turns customers into brand enthusiasts – as many as 94% say it makes them more likely to buy again.

A customer’s decision to stay with a particular retailer is also influenced by, among other things, a wide selection of products and access to exclusive events and promotions. Practical benefits such as free shipping, loyalty program membership and easy or free returns also increase the likelihood of making another purchase.

Loyalty program data is increasingly valuable

Members of loyalty programs are the most valuable customers because they tend to spend more than others. 58% of consumers say that participation in a loyalty program increases the likelihood of a purchase. Loyalty programs are already very common, with 75% of surveyed companies offering them to their customers, and another 22% planning to implement them in the upcoming 24 months.

In the face of rising inflation, loyalty programs that offer savings are most important to customers. In 2023, programs that provide earning points to shop, special discounts and free shipping were the most popular. However, it is worth mentioning that last year the average consumer belonged to an average of 3.4 loyalty programs. This number has decreased by 21% since 2021.

What is the reason for this? First and foremost, the lack of in-depth customer knowledge necessary for segmentation and proper targeting, as well as the inability to respond quickly to market opportunities. Retailers looking to retain customers in their loyalty programs may want to consider more diverse models. Tiered, hybrid or coalition programs can appeal to a smaller but still significant group of customers.

Loyalty programs also allow retailers to monetize the data they have. Retail media networks, is an example of a growing high-margin business. Already 54% of retailers are investing in such networks, with another 40% planning to launch them in the next two years.

For the fifth edition of the Connected Shoppers Report, Salesforce surveyed 2,400 shoppers and 1,125 retail industry decision makers. It was conducted from June 18 to 21, 2023, among respondents from North America, Europe, South America and Asia-Pacific.

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