RESEARCH REPORT

In brief

In brief

  • The pandemic has accelerated key retail trends that were already well under way, igniting a new surge of digital customers.
  • There is a tremendous opportunity for retailers to connect with today’s digitally focused customers and rethink their engagement strategies.
  • Retailers need to adapt their ways of working to deliver personalized interactions that lead to lasting relationships with these customers.
  • The key question to ask is how do retailers keep these new digital customers over the long term for sustained growth through 2021 and beyond.


The value of customer engagement in retail

Many of today’s retailers are grappling with a large increase in digital customers as a result of new shopping habits brought on by the pandemic. This is creating challenges but also huge opportunities for retailers to rethink their digital customer engagement strategies.

In this new climate, retailers need adapt their ways of working to deliver personalized interactions that lead to sticky, lasting relationships with these more digitally focused customers.

And while there are other factors that influence loyalty, a differentiated customer engagement strategy will be critical for retailers to maintain brand relevance and cultivate stronger allegiance with these new customers, through 2021 and beyond.

Today’s consumers increasingly define value as a personal connection between themselves and a retailer or brand, often founded in shared purpose or values and nurtured by reliability, service and trust.

When many retailers think about customer retention, it’s generally in the form of one-size-fits-all communications and promotions. This is distinctly different from the experience customers receive in a best-practice digital channel.

Retailers that don’t specifically engage with their new digital customers are blowing a golden opportunity to retain these new customers by turning insights into action and providing an experience that recognizes their value.

A surge in digital customers is creating huge opportunities for retailers to review and adapt their customer engagement strategies.

Three waves of retail customer engagement

In our experience, retailers are spread across the customer engagement maturity curve, which has three distinct waves.

Wave 1: Know thy customer

Retailers are just starting their digital journey, with a primary focus on understanding the customer. Most retailers are in this wave.

Wave 2: Begin to take action

Retailers are deliberately structuring their data and insights engines to fuel personalized action.

Wave 3: Full personalization for each customer

Retailers deploy one-to-one personalized journeys in a seamless and automated way at scale, often running on cloud-based systems.

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1. Understand where you are today

Assess whether you are adapting to consumer behavior by using analytics and making data-informed decisions.

2. Align on customer strategy and gather insights

Put in place the right KPIs and analytics to measure truly customer-centric and retention-focused behaviors and activities.

3. Assess your technology and partner strategy

Determine current gaps in the technical architecture and how best to close these, such as using partners for speed to value where appropriate.

4. Turn insights into action, at scale

Summarize insights into key themes and outline specific actions that different business teams can own and act upon.

5. Establish clear governance

Assign clear ownership and incentives to equip your organization to deliver on the customer strategy.

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The transformation required to sustain customer loyalty is substantial. But retailers that master individually personalized interactions at scale will be best positioned to capture the hearts and minds of consumers for sustained growth.



Eric P. Shea

Managing Director – Retail Strategy


Matt Jeffers

Managing Director – Retail Strategy

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