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The last few years have seen retail and consumer packaged goods (CPG) companies deal with multiple challenges, such as pandemic-induced operational disruptions, supply chain bottlenecks, geopolitical tensions, heightened inflation, and recession fears. However, their biggest and most pressing challenge has been understanding and adapting to the rapidly evolving customer sentiment.
In this article, we’ll discuss how retailers and CPG players can anticipate the shifting trends and capitalise on this with the right insights.
Changing Customer Expectations:
Digitisation has drastically changed consumer behaviour and their expectations of a business. Today’s customers demand self-service capabilities, personalised offers, relevant interactions on their device/platform, and an omnichannel experience. They also hold companies to a much higher standard and will readily switch loyalty if a brand falls short of their expectations.
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A recent Gartner survey found that 62% of customers will switch products if the brand compromises on the product to cut costs. A Mckinsey study further found that when faced with out-of-stock items, 39% of consumers switched brands, 32% switched retailers, and just 13% waited for the item to come back in stock.
While this data is alarming, it also shows that businesses that relentlessly focus on enhancing customer experience have a higher chance of success.
Using Data to Create a Customer-Focused Enterprise
In an ever-connected digital world, the customer journey (their path to sales and service) is constantly evolving, and businesses that do not keep pace will get left behind. However, a recent study showed that customer-focused companies could retain satisfied customers for five years longer than their peers.
There are three primary contributing factors to customer experience: the perceived value of a product, the wants and needs of the consumer, and customer interactions across different online/offline channels. Understanding the first two factors allows businesses to streamline the third and provide an effortless experience. So how can businesses gather these insights?
Today, companies have access to a treasure trove of customer data, including their purchase history, smartphone data, and past interactions with the business. Analysing this information will help companies to generate predictive insights to anticipate customer behaviour, identify real-time issues and opportunities, and connect closely with their customers. Here’s how they can do this:
Start quickly: Businesses often face issues with data quality and availability. Others feel they need to collate large data sets before analysing them to derive insights. However, businesses can start small by collecting primary customer-level data and information collected over online and offline interactions. Over time, this data can be bolstered with other sources across the customer journey, such as chats, calls, emails, social media, apps, and IoT devices.
Build consensus: Leaders often rely on traditional methods, such as surveys, to gauge customer sentiment. CX leaders must move beyond that and adopt predictive systems that generate detailed customer insights. And they must also get other stakeholders on board to create a scaling impact.
Break down data silos: This is a continuation of the previous point. Today, data is spread across multiple functions, such as operations, marketing, finance, and technology. So, building a cross-functional team will be essential for seamless data access and management.
Focus on the low-hanging fruits: Data-driven insights allow businesses to align customer experience strategies to quantifiable business value. When starting, it’s essential to identify a few specific use cases that can give immediate results. Then, organisations can review challenges and opportunities across the customer journey and use the insights to create solutions to improve loyalty, up-sell, cross-sell, and cost to serve.
Ensure Data Security: Regardless of the source, companies must ensure that all information is collected, stored, and users must follow privacy and cybersecurity best practices. Today, customers are cautious about sharing their data and avoid doing business with companies with shady data-security practices.
How can technology help?
80% of American consumers value convenience, speed, friendly service, and knowledgeable help as the essential elements of a superior customer experience. Consumers in other geographies value speed even more and expect customer-facing technologies to always work seamlessly.
To create a truly connected customer experience, businesses need to create a customer-centric culture and an operational model. To achieve this, they must use all the available technologies. Using AI, ML, and predictive analytics is helping retailers and CPG companies deliver personalised and immersive customer experiences. In addition, these technologies further help you enable digital commerce, create recommendation engines, manage revenue growth, and out-execute your peers.
Access to the right insight at the right time can allow you to understand user behaviour better and make the necessary changes to boost customer experience.
For example, the changes in customer behaviour mentioned above are more pronounced among younger and high-income customers. Access to this information can help you create separate marketing, sales, and service strategies for this age group to either arrest this trend or take advantage of it.
At the end of the day, it’s how you execute these insights that will make all the difference to your business.