The average consumer today is empowered. As retailers, your customers assume that their shopping experiences will be personalized, streamlined, convenient, and unique. However, sometimes it’s not just about having the most innovative new technologies to facilitate these elevate shopping experiences. As we’ll see in this article, most customer-centric retailers today are still defined by their likeability, friendliness, and individualized engagement with their customers across different channels.
The true innovation of customer-centricity, therefore, lies in using data-driven insights and technology to understand what customers love about your products and optimizing the customer experience (CX) of your entire brand.
With that in mind, here are a few commonalities that define the customer-centric approaches of these nine different retailers:
As you’re about to find out, it’s not about having a “think digital-first” mindset. Instead, retailers need to integrate business best-practices with marketing best-practices to profit from a holistic picture of their customers.
Let’s see how customer-centric retailers put this into action.
According to Peter Fader in “Customer Centricity”, Nordstrom has been keeping its customers happy since The Dawn of Time. Peter Fader didn’t say that exactly, but Nordstorm did start in 1901, which is well before The Dawn of My Time. And yet, over a century later Nordstorm is still delighting their customers:
With their friendly return policies, personalized thank you cards, app enabling customers to find products based on images, and legends about Nordstrom employees “going the extra mile”, Nordstrom is the traditional company whose customers keep coming back for more of these intimate experiences. And despite their recent store closures, Nordstrom is actually doing better now after investing in digital initiatives.
At the MarTech conference in 2019, Jason Mestrits (senior data science and analytics officer at Nordstrom) shared how leading marketing organizations are winning because of their renewed focus on data, customer analytics, and AI-driven innovations.
This shows how data-driven Nordstrom has become, especially concerning innovation in CX and personalization. Whilst they remain in the eyes of their customers a traditional company they still get ahead of the curve by investing in advanced retail analytics and customer data.
Founder of Amazon, Jeff Bezos, has the goal to be the “most customer-centric company on Earth”. This ambitious mission-statement drives all of their innovations from delivery drones to Amazon Prime. They start with the customer and work backward. Amazon’s customer-centricity is well documented, but I wanted to cover it here because of how they use data to drive innovation.
Having a fully integrated UX team, Amazon datafy’s every customer interaction to enhance online shopping experiences. They provide appropriate recommendations and reviews that are served on the right products, at the right time.
Everything about Amazon’s customer-centric approach is digital: the benefit of a pure-player eCommerce platform. Amazon capitalizes on customer data to personalize the webshop experience. They’ve now even expanded into brick-and-mortar using the same online data to inform which products they sell and what product tags they show.
Sephora’s customer success is digital-first. In 2012, their mobile orders were 167%. Since then, they have built on this success by catering to their digital customers first and foremost (that is, prioritizing digital campaigns, targeting mobile customers, leveraging IG ads).
They also leverage AI and VR by allowing their customers to virtually try on makeup pre-purchase, have a huge and impactful presence on social media, and integrate technology within their brand to elevate the CX.
Sephora also has an innovation lab where they test a broad range of digital experiences designed to inform and enhance shopping across different channels. Cosmetics brands are famous for their Innovation “Hubs” (like L’Oréal). This represents their digital-first strategy, always keeping the customer at the forefront of these experiments.
In comparison, Zappos has a different approach to innovating customer-centricity. They turn inwards and break down departmental silos within the company so that everybody is working with customer data to improve CXs from the frontend to the backend.
For instance, Zappos employees work on projects that they care about, giving employees agency in their creative direction. This revolutionizes the corporate structures and gives a fresh perspective on traditional working environments. It also facilitates data-sharing across departments and therefore consolidates a more holistic picture of their customers.
Coupled with customer data, Zappos also does home-visits, self-report surveys, usability testing, and in-depth customer reviews to better understand who their shoppers are. All of these things point to one-on-one interactions with their customers and fashion a 360-degree view. They also have a customer research group called Voice of the Best Customer, which was initially a grassroots initiative that is now transformed into a working group.
With only two physical stores globally, Glossier has a D2C approach, owns its entire sales funnel, and distributes its products independent of resellers or department stores. This means that a third of Glossier is digital, and they engage exclusively with their customers on social media and other digital platforms. Glossier communicates effectively with their millennial consumer base, allowing them to build at scale.
Did you know that Burberry was the first retailer ever to allow customers to buy online and pick up in-store? It seems like an obvious choice for most of us digital consumers, yet many retailers still don’t have this option in place. This is the first step towards omnichannel retailing, a cross-channel shopping experience that today’s consumers demand and Burberry pioneered.
Who wants to buy your product and why?
Burberry’s luxury trench-coat was originally thought to be marketed to the “upper class”. But actually, their established target base is millennials. By targeting millennials, Burberry seizes an opportunity in young, working-class professionals. This disruptive strategy has proved strategically beneficial to them.
Now, Burberry has gone from selling beige coats to being a leading voice on trends, fashion, and beauty in general: The Burberry Beauty Box is their concept store in London and has a “Digital Nail Bar” to help select your nail color via an iPad.
IKEA has always had an immersive in-store experience with its “vision-quest” that takes customers through the entire store. IKEA customers are allowed to touch, see, and smell all products whatever their age-group, shopping goal, or eventual purchase-intent. IKEA is aptly attributed to the psychological concept of the IKEA-effect, where an individual feels more attached to an object that they have built with their own hands.
Additionally, IKEA innovates the online experience together with technology partners. In the Netherlands, IKEA partnered with Crobox, a data company that leverages psychology and AI to learn what customers love about retail products.
IKEA uses this technology to better understand what product attributes are most likely to drive purchase behavior so they can promote the best product benefits in their omnichannel promotion. For example, they can use this product data to create microsegments for email or social media marketing, showcase localized product messages in-store, or run retargeting campaigns.
IKEA also has an AR-app called “Place” that lets customers see how well their products fit within their interior living spaces and an “advice center” in London which is totally separate from its product warehouses.
Nike is one of those brands that use technology in such forward-thinking ways that other retailers must be thinking: uh-oh. Nike’s economic profit has actually doubled in the last 10 years. A lot can be attributed to how they foster brand intimacy on such a mass scale, as well as their investment in technology.
However, investing in technology is expensive and requires that a brand has the scope and appeal as Nike does. That being said, there are still a few subtle things that can be copied from this business brand behemoth.
Selling “why” vs. “what”
For example, early Nike strategies sold benefits over products. They sold the idea of health, wellness, and exercise, suggesting that things like their “air max” or “swoosh symbol” would help their customers achieve these goals. This strategy has stayed with them ever since, a vision that puts the customer’s health and lifestyle first.
Being a customer-centric company that is now more than just the products they sell, Nike also takes a stance on political and social issues with their commercial ad strategies. While digitizing their omnichannel CX, they have built a Nike loyalty App that serves product recommendations, as well as charting wellness and activity (once more highlighting their focus on selling benefits over products).
Key Takeaways for Marketers
Aside from Disney, Wegmans has been ranked as the most powerful word-of-mouth marketing company in the world. People love Wegmans. This food retailer is still known as a family-owned company, which commits to their staff in unparalleled ways – $50 million was contributed in 2017 to employee development.
Wegmans’ supply chain is unique because they control the entire distribution process. They also effectively sync their data with local and national suppliers, which means that their product data is consistent and harmonious. This leaks down to their customers, of course, because shopping at Wegmans becomes streamlined, the stock is always established, and there is never an unhappy customer. Wegmans also has community outreach donation programs, and they pride themselves in their physical presence (brick-and-mortar stores).
Customer-centricity is key for any competing business. But innovation in customer-centricity defines the success of these bigger retailers. What these nine brands have taught us is that customer-centric approaches are a key defining feature in customer loyalty and retention, as well as brand equity and intimacy. What we’ve learned from customer-centric success is the following:
Nikole Wintermeier is the Copywriter at tech-company Crobox in Amsterdam. She invests in beer, basketball, and books. Big fan of psychology and alliteration.
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