The generation with the most buying power will soon be Generation Z.
This generation is growing up with customer-centric services such as Netflix, Google and Apple. Soon, they will only want to use customer-centric products and brands. We’re already seeing it happen: consumers want to buy products from brands they identify with and have a mission they relate to. They want to feel connected to the retailers they purchase from and they want to have access to personalised services.
Customer centricity will soon be a necessity in order to attract the right customers. But how can a retailer implement true customer-centricity? What does it mean to focus on the customer? We’ll cover those questions in the article below.
What is customer-centricity?
Nowadays, every retailer and company say they are working towards being more customer centric. But what does that really mean? Put simply, being customer-centric means putting the customer first by understanding their needs and purchases. Instead of pushing a product and explaining why your product is the best, customer-centric is about asking the customer first: what is it that you need?
This kind of thinking is a strategy and approach, as well as a business model. By focusing your business on the customer, all your products and services are aligned with their needs and preferences. This type of strategy helps increase profit in the long term. According to research by Forrester, simply improving customer experience (a type of customer centric tactic) can help improve loyalty metrics, which in turn increases the value of every individual customer.
Examples of customer centricity include Starbucks adding names to disposable cups, Sephora using AR and VR so shoppers can try on clothes virtually and Amazon offering same-day shipping and easy returns.
Here are some ways retailers can take customer centricity to the next level:
Take data and analytics seriously
There is a lot of talk about Big Data and the importance of personalisation, but the truth is that it can be a little more complex when first starting out. Aggregating and accumulating data is essential, but it’s meaningless if there is no structure or system in place to analyse the data appropriately.
As a retailer, you want to learn how to put your data to work and actually collect actionable customer insights. The good news is that you don’t need to spend thousands on fancy data platforms. You can start by simply tracking the data on your website using Google Analytics, or keeping a record of the various demographics your customers come from. At Recash, we do all the data tracking and insights ourselves to make sure you have all the right information from the beginning - and we only charge a transaction fee, which means we only make money when you do.
An example of a retailer putting this into practice is Next, a clothing retailer. They gathered their website data and decided to personalise the website depending on a user’s location and past history. Instead of seeing the same homepage as everyone else, a customer’s homepage would be tailored to their own personal preferences. According to Next, this small amount of personalisation increased their sales by 1% and helped promote other items that customers eventually bought.
Use it for innovation
Being customer-centric means it’s actually easier to innovate: you start by asking your customers some questions and then experimenting with their suggestions. One of the best ways to gain a competitive edge is to experiment and try something completely new, as crazy as it may seem.
Burberry was the first retailer to implement a buy online, pick up system (BPOS). Taking the first step towards innovation allowed them to stick out from the crowd, as well as encourage further digitalisation. Another example of innovation is the use of chatbots offering personalised recommendations, rather than just customer service.
With technological innovation, more opportunities are evolving to offer customers personalised services. Personalisation is the ultimate definition of customer-centricity: a service or product that only exists for the customer. For example, do you know any other retailers that allow their customers to receive cashback straight onto their bank card? That’s the type of personalisation and innovation we offer with Recash.
Find ways to interact with your customer
It’s difficult to be customer-centric if you aren’t talking to your customer. But getting to know your customer is easier said than done; how can you engage with them without being spammy or too corporate?
Some strategies are to simply interview potential customers, or even organise focus groups and encourage customers to come and chat. Instead of just doing polls and using the usual traditional methods, in-person interviews can help gain a better understanding of the general attitude and also encourage your team to talk to the customer.
This is something that Sainsbury’s recently engaged in. They launched a survey that covered over 8,000 people, with questions regarding their personal health, finances, and situation at work. From the data gathered, they were able to make better choices about how to best serve their customers and stakeholders.
Niche down
It’s a lot easier to be customer-centric when your target market is a very specific niche. That’s because the more concentrated you are on a group of people, the more identified they feel and the more tight-knit the community is.
Companies like Nike do exactly that: they’ve made it clear that they focus on two very specific areas: women and athletes. By having a clear picture of who they’re targeting, they can create products that customers are much more likely to value and use.
Focusing on a specific niche can also help build loyalty with customers. It offers retailers an opportunity to create much more tailored and targeted loyalty schemes, as well as discounts that encourage them to consume products related to their niche.
At Recash, we are taking customer centricity to a whole new level. By implementing the Recash tool, you can automatically upgrade your customer’s bank card to a cashback card - no extra work needed from their side. You can then offer personalised cashback on certain products and items, and even offer promotions when they are shopping at your competitors. With our all-in-one dashboard, you can clearly see the demographics of your customers, and pick which segments to target and when.
Implementing customer-centricity is easier now than ever. It’s also harder than ever. There are a lot of tools to help you offer personalised services, but customer needs are constantly changing and innovation can be seen as risky. Start with your customer needs, and build from there. It’ll also be a lot easier to experiment and build a successful product if you are in constant communication with your customer base.