Through a special arrangement, presented here for discussion is an excerpt of a current article from Retail Paradox, Retail Systems Research's weekly analysis on emerging issues facing retailers.
With uncertainty still reigning supreme and words like "frugality" and "austerity" coming into vogue, this year will be more about keeping customers you already have - certainly making sure that you don't lose those customers - than about gaining new ones. New customers seem to be a rare species these days.
So how does a focus on existing customers change retailers' priorities? I have a few thoughts:
Know your (existing) customers well. Just as few things are more frustrating than entering all of your information into an automated phone tree only to have to repeat it when you talk to a customer service rep, consumers do and will take note when they loyally provide a retailer with their shopping behavior, only to have that retailer make offers that are completely irrelevant. You don't need to provide customers with an excuse to defect.
Online is no longer a salve for sales. Early results seem to indicate that online retail sales fell for the first time ever this holiday season. For a lot of retailers, that means that online no longer bolsters poor store sales. It also exposes a lot of rocks under the water within online operations. While e-commerce operations are long overdue for some streamlining, if you pursue cost savings there without an eye for creating cross-channel processes, you're setting yourself up to fail the minute customers re-open their wallets.
Pay attention to customers wherever they are. Customers have more channels available to them to provide feedback about shopping experiences than ever before, and if you're not listening, you'll only give them an excuse never to come back. I had a close brush with missing out on a hot gift item for my son, thanks to a snafu with Target's e-commerce operation. As an experiment, I joined an "I hate Target" fan group on Facebook and told my story. I wanted to see if someone from Target was paying attention. But I forgot that my every action is broadcasted to all of my Facebook friends - which span everyone from high school friends to business friends. I got a ton of feedback from people who had no idea what I was up to - offering sympathy and their own sordid tales of bad customer service. The lesson? Just because a tree falls in the woods and nobody you know is there to hear does not mean that it doesn't make a sound.
It's easy to forget about sins of customer service to your existing customer base when hordes of new (or unknown) customers are walking through your door every day. I think it will be awhile before a time like that comes around again.
Discussion Questions: Do you agree that these times call for retailers to renew their commitments to existing customers? How does a focus on existing customers change retailers' priorities?