4 Lessons From Retail about Managing Customer Relationships
The retail industry has taken a hit in recent years, thanks in part to changing customer preferences, the rise of online shopping, and increasing pressure from global competitors—not to mention the devastating economic impact of the ongoing pandemic. For better or worse, the past decade has affected retail in a big way. While some companies adapted and survived, others were forced to cut their losses and close up shop.
The fact is that retail as we once knew it is dead. Yet there’s plenty of knowledge we can gain from its demise. As consumers, business owners, and employees, we can learn from the mistakes of recently bankrupt retailers as well as from the success stories of those that adjusted their strategy to suit the new market—especially when it comes to customer relationships.
Let’s take a look at the lessons we’ve learned from the retail industry over the years.
1. Adapting to Changing Customer Needs Is a Necessity
Over the past few centuries, the retail industry has changed in major ways. From the mom-and-pop shops that dominated the 18th and 19th centuries to the big department stores that followed (some of which continue to do business today) to every city having a shopping mall (or several) to the advent of e-commerce.
There was one major driving force behind all of those changes—evolving customer needs.
People loved mom-and-pop shops, but they couldn’t compete with the expertise and convenience of bigger stores. As other types of work began to replace agriculture as the dominant industry, more people began to earn better wages and move into the cities. This shift in lifestyle was reflected in their preferred shopping experience. In the cities, consumers craved upscale experiences with experts at their side. Department stores started popping up with the added appeal of in-store events, trained staff, and a one-on-one approach.
As customer needs continued to change, so did the industry. After all, the customer comes first. And those who didn’t want to (or couldn’t) accommodate those changes are no longer in business.
Just look at Toys “R” Us, for example. Once the most popular toy store on the market, it failed to update its strategy to keep up with the times. Toy “R” Us continued treating stores like warehouses, instead of creating a better in-store experience for kids when the market was heading in that direction.
The lesson here is to focus on understanding what it is that your customers really need. Invest in analytics and forecasting tools that can help you predict shifts in the market. That way, you can adapt and keep your business going for years to come.
2. Give Customers Reasons to Stick by You
Nowadays, it’s hard to find a unique product no matter the industry. People can almost always easily find a cheaper variation online. So in order to maintain a steady flow of customers, you need to give them a reason to stick with you over any number of potential competitors.
Your point of differentiation will depend on your industry. Perhaps you can offer more for a cheaper price. Perhaps you have a feature that no other offer has. Maybe you can create an unforgettable customer experience or provide expertise that no other business can.
Again, we can look at the example of Toys “R” Us. Their stores sold the same exact toys that all other toy stores sold. Nothing about their products made them stand out. If they had created their own line of toys, for instance, or offered play centers in their stores, it would have made them unique and could have kept them afloat.
3. Personalize for the Best Customer Experiences
Custom-tailored service is often the key to good customer experiences. Did you know that 80 percent of customers are more likely to buy from companies that offer personalized experiences?
Both stores and online retailers have used this knowledge successfully. For example, e-commerce sites might show customers suggested products based on their previous purchases or display personalized marketing messages.
You can use similar strategies for your own business, but also improve upon them. Train your staff to work one-on-one with your customers and get to know their personal needs. That way, you can anticipate what they might want next and upsell if necessary.
4. Make It Easy for Your Customers
In general, people don’t like not knowing things—and they definitely don’t appreciate things that confuse them. But what most people do like is simple and convenient experiences, especially when it comes to spending their hard-earned money. Here are some ways to make the customer journey easier for your customers.
- Highlight your most important products. When you walk into most clothing stores, you see mannequins everywhere—and for a good reason. They serve several purposes, but showing off the most important products is on the top of the list. And most of the time, those are the items people go for. Similarly, you should make things easier for your customers by highlighting your most important products in ad campaigns and on your homepage.
- Show what your products can do. The second purpose of mannequins in a clothing store would be to show an example of what can be done with those items. Most people aren’t fashion experts, so they don’t always know which items go well together. Displaying a full outfit on a mannequin gives shoppers a clear example of how to wear unique items and makes their shopping decisions easier.
- Set customers up to succeed. Food retailers often have kitchens on site so customers can try meals and, if they like them, buy all the ingredients to make them at home. So instead of simply selling your products or services to customers who might not know what to do with them, give them a taste of the end result. For instance, you could highlight testimonials on your website to emphasize the type of outcome you can help customers achieve. Or offers demos where your staff work one-on-one with customers to show them the benefits of using your product or service.
- Bank on convenience. Most people walk out of retail stores with more items than they intended to buy. For example, shoppers might grab a pack of gum at the grocery store register, just because it’s there. A similar effect can be achieved in the online shopping experience. You could offer related product suggestions before the final checkout page or promote additional services that make using the product easier for the customer.
Put These Lessons Into Action
Though retail as we knew it may be on its way out, its legacy lives on in several important lessons for the future of commerce. Most notably, the retail industry has proven that a positive customer experience is the most valuable element of achieving long-term success.
When you provide your customers with an unforgettable, seamless journey, you can expect that they will come back time and time again. By adapting to changing needs, differentiating your brand, and personalizing your services, you can build relationships with your customers that will persevere through any market disruptions.
Kristina Perunicic is a freelance writer with Plytix, a headless product information management system designed for fast-growing product brands. She has a background in marketing. In addition to writing and editing, she occasionally consults local startups on their digital marketing strategy. She loves reading, volunteering, and spending time with her family.