6 Future-Proof Ways to Boost Customer Engagement in Retail

Photo of Radosław Szeja

Radosław Szeja

Sep 4, 2023 • 12 min read
shopping online

The ultimate goal of customer engagement is to cultivate a deep bond, one that leads to lasting loyalty and frequent returns. This can have tremendous implications for a retailer's bottom line.

Fully engaged customers bring a staggering 23% premium in terms of share of wallet, profitability, revenue, and relationship growth compared to the average consumer. This can cause a 66% rise in sales growth, a 25% boost in customer loyalty, a 10%+ surge in net profit, and an uplift of over 20 percentile points in customer confidence, as highlighted by Gallup.

Amazon represents the pinnacle of strong customer engagement strategies, their Prime memberships being the main one. Just how engaged are Prime members? With over 200 million of them around the world, over 60% take part in the yearly Prime Day. In 2022 they snatched up over 300 million items during the event.

Clearly, finding ways to engage customers is worth it, so how can other retailers replicate Amazon’s success in this area?

Understanding customer engagement in retail

Engagement is a key part of the overall customer experience. The goal of customer engagement is to build a long-term relationship with customers that goes beyond a basic transaction. The engaged customer voluntarily spends their time and effort on things that benefit the business, such as:

  • Rating and reviewing
  • Spreading positive word of mouth online or in-person
  • Providing feedback and ideas for improvement
  • Participating in activities and events
  • Exhibiting an emotional connection to the brand

Engagement is never the result of one campaign or loyalty program. Any interaction that the customer has with the business can create a positive or negative impression that influences the overall engagement.

It’s a marathon, not a sprint, so it’s all about consistency. Research from Salesforce indicates that 76% of customers expect consistent interactions across departments. However, 54% say it generally feels like sales, service, and marketing don’t share information.

From the first interaction with a brand, all the way to post-purchase support and communications, the customer takes all of it into account when deciding if they’re going to interact with you again. This makes customer engagement a cross-departmental effort with a wide scope of activities and systems needed to support them.

Customer engagement strategies

Special offers, loyalty programs, and similar tactics are the end result of a comprehensive customer engagement strategy. Here, we’ll focus on the strategic fundamentals needed to plan and execute such tactics effectively.

#1 - Brand voice

If your brand were a person, who would they be? How would they communicate? What would they love, what would they dislike?

These are the basics of establishing a brand voice, which is a big part of maintaining consistency across the whole customer journey.

For a good example of brand voice, look to Nike. Positive and inspiring, the brand is instantly recognisable and attractive to customers looking for sports apparel.

Couple that with a vast, connected marketplace of products, services and experiences, and it’s easy to see why the company’s profits keep growing.

Thanks to their powerful branding and smart digital expansion, Nike’s customer engagement grew by 27% in 2020, with 50% more repeat buyers compared to the previous year, and 79 million engaged members in the Nike ecosystem.

Since then, the membership numbers kept growing, though it’s not easy to find a verifiable, up-to-date number. Some sources say it’s over 100 million now, others that it’s over 300 million. No specific number was mentioned in their most recent earnings call, Nike’s CEO John Donahoe only stated that they expanded their membership base.

He also dropped a hint regarding the secrets of their success, saying that “no brand connects people to sport by putting all of the pieces together like we can. We stay in the lead because we combine innovation, brand, and the culture of sport and do it all at global scale.”

#2 - Training and collaboration

Nike’s brand wouldn’t have been so powerful if the whole company weren’t involved in pushing the narrative.

Having brand and communication guidelines in place, as well as systems that enable customer engagement activities, doesn’t mean much if they’re not used properly.

So, before you engage buyers, it’s important to engage your own teams and external stakeholders in the mission to provide the best possible customer experience. Plus, make sure that employees are trained in how to use any software involved in the process.

#3 - Data mastery

For retailers, both online and in-store experiences rely on data. This data offers insights into customer preferences, enabling tailored marketing, personalized offers, and precise inventory management.

It all sounds great, but it’s not easy to implement. In a McKinsey survey of analytics programmes, companies spent 80% of their time on repetitive tasks such as preparing data, with limited value-added work. Only 10% of companies believed they had data under control.

This is partly caused by a company culture not fully rooted in data-driven decision-making, combined with gaps in understanding and analyzing the information available.

The cure? DataOps, which McKinsey experts describe as three key changes:

  • Using culture and skills to empower employees to continuously use data and automate processes
  • Revising processes in order to reach streamlined and fully automated deployment of new analytics modes
  • Setting up an end-to-end suite of tools to automate the integration and deployment pipeline for data models

Rather than merely handing over tech tools to teams, DataOps emphasizes building data literacy, fostering collaboration across departments, and enabling real-time data-driven decisions. The goal is to seamlessly connect sales data with back-end supply chain and inventory information, creating a unified strategy for superior customer engagement.

For retailers, managing the avalanche of data effectively is a key challenge. Modern data architectures, powered by cloud-based systems, are proving invaluable. These systems gather data from various sources, ensuring that real-time analytics are both accessible and actionable.

The DataOps framework provides clarity on available data, ensuring teams across the board – from managers to customer service reps – can make informed decisions, ultimately enhancing the customer experience.

#4 - Customer Engagement Hub

It sounds a bit menacing. Another piece of software that you need? Kind of, but not quite.

Jon Picoult, founder of a leading customer experience consulting firm, explains that “a hub is rarely a single system. Rather, it’s an architecture, an elegant strategy for pulling together normally disconnected data to create a holistic view of a customer’s relationship, activity, and interactions with the business.”

According to Gartner, a customer engagement hub (CEH) serves as an architectural framework that connects multiple systems, enabling optimal and personalized customer interactions across all touchpoints, be it human, AI, or sensor-driven.

The CEH can break the barriers of disjointed customer experiences. Instead of a patchwork of software that may lack deep integration, CEHs consolidate product information, customer preferences, communication channels, and ordering into one unified experience.

Incorporating a CEH requires a blend of strategy and technology. To seamlessly incorporate CEHs into existing business infrastructures, companies should view them as extensions of current customer-centric processes. Budget-conscious managers will be pleased to know that legacy systems don’t all need to be replaced, as they can be integrated with CEHs to offer enhanced user experiences.

The benefits of CEH go beyond streamlining processes. At its core, it establishes a foundation for delivering richer customer experiences.

With a CEH, sales, service, and marketing teams have a clearer understanding of a customer’s entire journey with the business, making them more efficient. For the customers, this means they are more likely to feel valued and understood.

One example of successful CEH implementation is the footwear brand New Balance. After implementing systems from Aptos, Tim Walsh of New Balance said it made global expansion easier.

It enabled the company to open new stores with much less inventory, and create new customer experiences within them. It has also helped New Balance break down internal walls, which enabled them to branch out into siloed regions in the Asia-Pacific market.

#5 - Appropriate support

Excellent customer support, across all platforms, is a must. No matter how interactive or innovative an experience is, if the support isn't up to par, real-time engagement efforts can crumble.

Immediate responses, whether via live chat, email, or phone, are required to meet the modern customer's expectations of swift communication.

Engagement is about fostering genuine, end-to-end connections with customers, rooted in understanding, empathy, and listening. Support plays a huge part in this process.

#6 - Experiences, not discounts

Discounts and deals have always been the prime mover behind major shopping events. However, a closer look at emerging trends in lucrative markets suggests a fascinating evolution. The narrative is shifting from discounts to experiences.

Consider the luxury retail market in China, which houses a vast potential audience for luxury brands. Capturing this market's imagination requires finesse. According to Christina Fontana (Director, Strategic Partnerships at Alibaba Group), it's imperative for brands to understand their specific Chinese audience.

This demands a data-driven approach to understand shared values between brand and consumer. A 'one-size-fits-all' strategy, given the expansive population, is not the way to go.

The Chinese luxury consumer isn't solely driven by discounts, so the shopping experience leans more towards a social, explorative journey, one of discovery of new trends and insight into what others are buying.

This is social commerce, where livestreaming plays an instrumental role. Even prestigious legacy brands, such as Cartier, use livestreaming not just for product demonstrations, but to cultivate relationships with their consumers. This isn't just about the transaction, but the emotional interaction and excitement of online shopping.

Basketball superstar James Harden's recent experience is a good example. Promoting his J-Harden brand wine on a livestream with influencer Crazy Brother Yang, they sold 10,000 bottles in 14 seconds. With 15 million viewers, this event demonstrated the immense reach of livestreaming and the collective buying power that an engaged audience can have.

Livestream shopping has escalated in its influence, morphing into a multibillion-dollar enterprise in China. Merging entertainment with e-commerce, it presents a dynamic and interactive buying experience for the audience. And while discounts are still a part of the appeal, it’s all about the unique experience that such platforms offer.

All this shows that brands looking to make a mark in today's market, especially in regions like China, need to invest in experiences. The modern consumer seeks more than just a product. As the paradigm continues to shift from discounts to experiences, businesses must evolve as well, ensuring that they can meet and exceed consumer expectations.

Brave new world of retail

In the ever-evolving world of retail, deep customer engagement has become critical to success. Businesses must adopt a holistic approach as the landscape shifts towards more data-driven and immersive experiences, and the technology supporting these initiatives becomes crucial.

If you're looking to elevate your technology stack for enhanced customer engagement, reach out to our retail experts today.

Photo of Radosław Szeja

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Radosław Szeja

Engineering Lead | Retail at Netguru
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