Nobody likes losing customers, but in this world of rapid change, it’s never been easier.
2017 has been a year of transformation for the retail sector in particular. An estimated 89,000 US jobs were lost in retail last year, and that’s mostly put down to a reported 50% decline in visits to shopping malls - so customer behavior has changed, as well as the experiences they expect from us.
From the 1800s right up to the 1960s, we had an affinity to local stores, mostly down to a lack of transportation. But as that evolved and economies grew, we saw the growth of shopping centers and then mega stores - a focus on ease and convenience, which lasted through to 90s. The new millennium brought us an e-commerce revolution; the internet was more widely available, and then, of course, the smartphone changed shopping habits forever. And today, we’ve reached another stage of that evolution: the experience era.
The experience era
It’s a point of real differentiation - in fact, experience is the most effective way for businesses to stand out from the competition.
Customers’ expectations for the experiences they receive have changed significantly. And although there are many positives to take from all that change, we should be concerned by the brands and organizations who are not keeping up with the needs and behaviors of their customers. There is a real risk of them falling behind, and in such a fast-paced e-commerce environment, no-one can afford to do that.
Anything we want to buy online today, we can find in multiple places very quickly, and we can switch loyalty almost by the minute too. It’s worth remembering this. As behavior evolves, so must we.
There is a long list of companies who led from the front and had real dominance in the retail sector, but they failed to adapt to their customers’ needs - and they failed, fast. In this new experience economy, being a leader means you’ve disrupted something. Amazon is a leader, and a site to which customers return over and over again. There is a fitting quote from their CEO that has really stuck with me since I first heard it:
The philosophy of the experience era
More recently, it’s been interesting to observe a shift in those attending industry events - for example, digital marketers from financial services are going to retail-focused events, and there’s plenty of cross-sector pollination going on. Experience doesn’t have any boundaries, and it’s fantastic to see different sectors learning from each other.
Losing customers has never been easier - yes. Conversion rate is cited as being the metric of choice, and the main value proposition of most marketing technology companies, like ours, is to improve conversion rate. We’re looking at this the wrong way around.
Experience over conversion
There is an average online conversion rate of 3% thrown around the industry. If we take this as gospel, that means that 97% of customers didn’t convert - and it’s this which is the more important figure.
If we were talking about a physical store and we saw 97 out of 100 customers walk out without buying anything, we would ask, why? Digitally, we’ve convinced ourselves that a 3% conversion rate is good, when the truth is, it isn’t.
But the real question we need to ask ourselves is: how do we find the people who really want to buy from us, but don’t? Once we’ve discovered and analyzed their digital behaviors, we can improve their experiences. And this is where we can see a huge improvement in business results.
The answer comes with this application of human insight into the digital world. The answer comes in understanding digital body language.
I discussed this topic in more detail on a recent webinar with the American Marketing Association, which is available to download by clicking on the banner below.