Transforming Your Retail Business through Customer-Centricity

Catherine Palmer
Guest Contributor

Shopper-centric is success-centric, and a few tips to better direct your focus toward shoppers can transform your business into one shoppers return to time and again.

“Putting the customer first” and “the customer is always right” are retailers’ mantras used for so long they have become worn out. Retailers are always talking about delivering the best possible product, service and experiences to their customers, but this is easier said than done, as there is no one way of measuring customer-centricity. It goes both ways: how you treat your customers and how your customers respond to those actions.

Considering the financial impact of customer-centricity is enormous, it is strange how few retailers are genuinely devoted to strategies that put the customer first. The estimated cost of customers switching to competitors due to lack of good service is $1.6 trillion. On the other hand, businesses that use customer-centric strategies are 60 percent more profitable compared to businesses that are not focused on the customer.

If knowing these facts and numbers has opened your eyes and showed you just how important is to be customer-centric, here are a few tips that will help you transform your business into one shoppers will always come back to spend their money.

The first pillar of customer-centricity: know who your customers are

You cannot direct your efforts toward satisfying the needs of your customers and providing them with a pleasant experience if you do not know who are they and what they want.

The benefits of properly conducted customer research are numerous:

  • Understanding what your customers want,
  • Developing marketing campaigns which target and appeal to the right audience,
  • Identifying potential customers,
  • Guiding everything from store design to site selection.

There is no easy way to do this because it requires thorough research. Fortunately, with today’s technology and analytic solutions that use enriched customer data, this is much easier than in previous eras when companies used surveys and telephone calls for research.

However, there is a need to invest in data analytics platforms and experts.

Retailers have no use of raw data and they need to strive for creating a full view of customers which includes adding interactions, context, intent, and insights to the data. In simpler terms, you need to fully understand shopper demographics, lifestyle, values, behavior, and engagement.

In the era of globalization, go for personalization

With the nearly unlimited potential market all retailers have today in the form of the almighty Internet, we may have become too obsessed with globalization and appealing to everyone.

A customer-centric approach is on the opposite end of the spectrum because it is focused on each customer individually.

Some of the things that are crucial for customer-centricity, both online and offline, are communication that aligns with your brand (this includes how your employees communicate with the customers, but also visual things, such as banners, doormats, ads, etc.), personalization of the site or shop appearance (brick-and-mortar shops can also be personalized, in the sense that its appearance is designed based on shopper ages, interests, etc.), and making engagement easier (for your website, that can be pop-up chat, and for the store, workers who approach store visitors and ask how they may best serve).

This poses an enormous challenge for everyone except tiny local brick-and-mortar shops which sell mostly to their neighbors. However, by applying what you’ve learned from data and analytics, you can create a strategy that targets your audience’s needs and wishes.

Online, these technologies include traditional tracking tools like cookies, pixel targeting, site tags, and click redirects, which are all already well established in e-commerce stores. Nowadays, marketers are also using people IDs— unique, anonymous code that unifies across all browsers and devices. This tool links interests and demographics, and contributes to creating unique consumer profiles.

Together, they make personalization of the customer experience easier. Hyper-targeting can welcome returning users by name and display new products that will be interesting to them based on previous purchases or viewing history. When they get an email, message, or ad with relevant content, they’ll be enticed to keep exploring and buying from you.

As for brick-and-mortar stores, train your employees to treat every customer as an individual they are happy to see and serve. And, of course, there are some useful tools brick-and-mortar stores can also use. For example, RetailNext partners with retail stores to measure performance by integrating physical and digital data, delivering the same e-commerce-style metrics that online stores have enjoyed for years.

Aim for their irrational side

Danielle Schindler, co-owner of Scandia Home in Birmingham, Michigan, said a very important thing: “Retail is about connecting with people emotionally.” That’s why she doesn’t rush to make a quick sale; instead, she aspires to create a long-term relationship with customers.

According to Psychology Today, emotions often determine purchase decisions, and they come in the form of previous and related experiences. Brand representation and the story you communicate are also vital to how you connect with your customers on an emotional level.

While purchase decisions are made emotionally, they are still justified rationally, so don’t go too far with your marketing messages and customer treatment. First, try to pull on the emotional heartstrings, and then present the actual benefits of your product/service and calls to action.

Revolutionize your customer loyalty program

The first form of a customer loyalty program was established in the late 18th century – it centered on giving buyers copper tokens that could later be redeemed for future purchases. This customer retention strategy paved the way to loyalty programs as we know them today.

As we can notice, things have changed and they still need to change, because much of the industry has not gotten much further than where it was at what is considered to be the age of modern loyalty programs (the early 1900’s). The only significant change since then is the rise of e-commerce.

Modern consumers want personalization, interaction, and shared values, but also new experiences. Therefore, modern loyalty programs need to encourage engagement, reward specific milestones, provide meaningful surprises and individualized incentives drawn from purchase histories.

Some great examples of such strategies are Sephora, Starbucks, and Ulta. Their programs incent sharing and social interactions. They are not aiming for one size fits all reward, but for personalization.

The goal, however, is always the same – customer retention. To make it work, retailers need to find out why their customers aren’t loyal. It can be the product price, customer service, or something else.

These strategies may be called customer-centric, but knowing their benefits, we can also call them success-centric considering loyal customers are five times more likely to purchase the same product again, seven times more likely to try something new you are offering, and four times more likely to recommend you to their friends, family, and colleagues.

About the writer: Although web design is Catherine Palmer’s formal education, business management, success and small business growth in the digital age are topics she is quite interested in lately. Catherine has been researching and learning for some time now, and she is always happy to share her knowledge and inspire others by writing quality content.

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