For retailers, trust is key to accelerating out of COVID-19
Companies will have to understand consumers in the context of the crisis and optimize experiences to earn their confidence.
Photograph by miodrag ignjatovic
Retailers have long known the formula for economic success: Win the trip, grow the basket, and deepen loyalty. In the current pandemic environment, though, winning the trip has taken on new meaning and is dependent on optimizing customer experience in distinct ways — and in so doing, re-earning people’s trust.
As people grapple with the effects of COVID-19, they’ll put their faith in your company if you keep them safe, communicate clearly, and hold up your side of the bargain: having the items they need in stock, setting reasonable prices (resisting the temptation to increase your margins on in-demand goods), and providing a consistent level of service, especially convenient delivery times and pick-up windows. Trust also implies a relationship, and you can’t have a relationship with customers if you don’t know them. So, it’s important to understand how the pandemic is changing people’s behavior and their demand for your products and services.
Vast swaths of consumers are newly accessible because loyalty to their usual brands and locations has been disrupted by closures, new travel patterns, and items being out of stock. To win over potential new customers, it will be critical for you to get the trade-offs right among price, assortment, convenience, and other forms of experience, and to reassess regularly as you manage through the stages of this crisis, from restarting your operations to redeploying investments. If you do so successfully, you can emerge from the crisis stronger than before.
Strengthen your demand sensing
As a business leader, you face a strategic imperative to accelerate some existing initiatives and build new capabilities through this crisis. When it comes to experience, this means sharpening your organization’s nervous system both to sense the level and mix of demand in this rapidly changing environment and to react to it. Accordingly, you must drive greater enterprise agility. Doing this won’t be a one-time exercise; it will require a fluid approach over an extended period as consumers react to the pandemic-induced recession and settle into a new equilibrium for shopping habits and brand preferences.
A highly tuned demand-sensing capability will help generate key insights. Building this proficiency will mean that you have to combine scenario planning with adjustments to demand-sensing models that incorporate company and third-party data. You can then apply insights to determine how to realign and accelerate strategic initiatives, balancing short- and long-term priorities. Certain plans can be optimized this year, but others will need longer lead times so you can reimagine your value proposition in innovative ways.
Create a faster feedback loop
It will be easier to optimize experiences to reinforce trust and win the trip if you can act more quickly on demand-sensing insights, which means creating a faster feedback loop. More immediate, actionable demand signals will enable retailers to see at a local level how specific customer segments are behaving and how their attitudes and behaviors are evolving.
Vast swaths of consumers are newly accessible because loyalty to their usual brands and locations has been disrupted by closures, new travel patterns, and items being out-of-stock.
Beyond mining social sentiment and creating a more agile approach that combines these insights with other demand signals, retailers can speed up the feedback loop by listening to their employees. Frontline employee experience greatly influences customer experience — and brand reputation.
When you combine customer and employee experience data with your operational data, you can get a more complete picture of your return on experience (ROX), or the measurable result of the investments you’ve made in reinforcing trust through improved experiences. In our next column, we’ll elaborate on ways that you can drive innovation in the experiences you provide to customers, enabling a more agile approach to drive ROX as you navigate through and beyond the crisis.
PwC US principal Nicholas Hodson also contributed to this column.
