Retailers, especially those who rely on brick and mortar for most of their sales, face challenges due to the pandemic. Firms revised sales forecasts and re-shaped business strategies multiple times. Thankfully, businesses have started to rebound as people have slowly resumed their usual shopping activities. As per NetSuite’s data, consumers are spending on immediate goods as well as non-essential items.
Now, it’s time for retailers to double down their relationships with consumers. And that’s the reason; customer loyalty has turned into an integral part of every strategy for business survival. But it is not going to be a cake-walk. E-selling has introduced a new set of problems for customers, and they have become less forgiving.
1. Sudden rise in displeasure
A study jointly conducted by WisePlum and Wharton’s Jay H. Baker Retailing Center has pointed out that retailers failed to keep customers happy during the pandemic period. Some of the most highlighted reasons behind displeasure were cumbersome return policies, unrewarding loyalty programs, poor customer service, and sticky web/app navigation.
The same study also highlighted the overall loyalty towards a brand or store has decreased during the pandemic. Online sales have increased since the introduction of worldwide lockdowns, and a more significant number of consumers are reporting problems when they shop. Unfortunately, buyers are often less forgiving and may not consider the fact that retailers are scrambling, finding it difficult to tweak their business models.
One of the researchers, Professor Thomas Robertson, recently interacted with journalists. He pointed out that the decrease in loyalty was visible since May this year. Shoppers are more sensitive about shipping charges, returns procedures, and website navigation-related problems. Online sales increased, but some retailers were not ready to deal with issues and still find it challenging to cope with it. No matter if the retailer sells online or at physical stores, in order to retain customer loyalty, they need to improve the overall consumer experience.
What should retailers do to improve their position?
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Loyalty programs need better customers’ service
Individuals enrolled in a customer loyalty program often face more problems with regard to points. Some customers find these programs complicated. The daily number of calls or emails to customer service remains high as members wish to keep themselves updated about points they have earned and options to encase them.
Consumers who enroll themselves in loyalty programs expect retailers to treat them uniquely while discussing problems. They also expect a quick resolution and feel frustrated when they fail to get so.
Most customers prefer calling customer service to check details for redeemable and non-redeemable ones. Thus, consumers enrolled in loyalty programs are often found dissatisfied compared to those who are not enrolled in such initiatives. Dedicating a team of experts to handle loyalty program related emails and calls can be a good idea.
Also, opting for a Loyalty management platform can help firms in designing and managing loyalty programs. Such software programs can analyze consumer data and create tailor-made incentives for each set of customers.
2. Customer experience needs to be prioritized
As pointed out in several studies, retaining existing consumers is better than acquiring new ones. The prospect of gaining new loyal consumers appears uncertain as discretionary spending is minimal due to the pandemic. Thus, keeping current buyers happy is crucial for brands to ensure it does not lose its core profit.
The best and trusted way for businesses to show they care and value customers is by promptly responding to emails and phone calls. Offering priority support to loyal customers can help in fulfilling their support needs. An omnichannel support service approach can be the best suitable one as consumers get more than one option to interact with the business.
Businesses should also consider looking at ways to overcome purchase-related barriers. Ensure the company has an infrastructure for frequent product sanitation. Employees should follow all the local health safety guidelines at in-store and curbside pickup facilities, as well as while delivering goods at customers’ door-step.
3. Re-evaluating the demand and adjusting marketing strategies
Customer demands have changed drastically since March, and retailers need to analyze the trend. Orders of repeat customers should be prioritized when it comes to making changes in product offerings. Businesses should consider re-evaluating inventories and prioritize marketing and sales of products that are in demand to get the best ROI. There is no point in continuing unprofitable products and services.
Depending on the spread of the virus, some parts of the world are more affected than others. Customers’ demand can change depending on the pandemic situation. For example, European nations are entering the second phase of lockdowns. Thus, their needs will be different compared to consumers in Asian countries. Depending on re-opening and shutdown situations, a regional approach can help in inventory management during the coming months.
4. Reducing marketing budgets is a bad idea
Both small and large organizations often consider cost-cutting as a factor that can help in improving profits. After all, saving is equal to earning. However, slashing marketing spending during the pandemic is a bad idea. As pointed out earlier, customers change their buying habits during hard times and do not mind trying a new brand. Buyers may quickly forget the business if they do not come across the brand on social media.
Marketing helps customers locate products and services during lockdowns. Plus, a business can increase its market share by increasing marketing in areas where competitors have slashed advertising budgets.