5 Strategies for Understanding Customer Needs While Competing in Digital Retailing Sure, you're ready for the holidays. But what are you doing about next year and the year after?
By Bernard Luthi Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
The digital space is changing the face of traditional retailing as we know it: Brick-and-mortar retailers face a steady uphill climb as they compete for consumer dollars against incumbent digital giants like Alibaba, Amazon, Rakuten and Apple. And customers are more savvy than ever because they've begun to really understand the pricing and markup landscape, some of which the influx of overseas suppliers has helped propagate, lowering electronics prices along the way.
Related: 3 Ways to Increase Customer Loyalty
As retailers, we need to prepare for and think about the short term, but perhaps more importantly, we need to think ahead to the long-term future of retail. What it truly comes down to is, how well do we know our customers? For any e-retailer, the long-term growth objective has to be to gain and maintain a loyal base of high-value customers -- a scarce commodity, no matter how compelling the brand.
E-retailers have their work cut out. Today's customers are less loyal and far less trusting, and they have more power than ever before. Despite the difficulties involved, gaining and maintaining a customer base is mission-critical for today's digital businesses, given the fact that truly engaged customers are a company's best online evangelists.
Finding ways to truly understand ingrained consumer behavior, then, is essential. To succeed in today's ecommerce landscape, the following five factors are crucial when it comes to reaping benefits from your customer base:
1. Effective targeting
Understand your customers from both a demographics standpoint and a lifestyle perspective. Why are they shopping with you, and how do you as a retailer satisfy that need, then add to it by continuing to target the customer with meaningful promotions? Do you utilize email campaigns to deliver relevant data and craft promotions which are unique to your brand's customers? You need to go beyond just asking customers what they want in a new product or service. If you don't, you're making a major mistake.
2. Forward-looking relevancy
From a products perspective, you should be identifying trends which allow you to stay relevant. Focus on what customers will want tomorrow, not necessarily today. USB C is the the digital industry's newest connector and cable. By recognizing the important of this changing technology early on, our company, Monoprice, took advantage of our ability to be quick and nimble, to be first to market.
Introducing/and or scooping the market on where customers are heading allows you to stay fresh and top of mind. The key is to develop and deliver a discoverable product, and then make your value proposition strong enough, so that when you are discovered, people will visit you, transact with you and consume what you're offering now and into the future.
Take a consumer-centric approach to your innovation and don't just launch a product and see if it takes. Instead, talk to your customers first and then launch, knowing they will come.
Related: 25 Tips for Earning Customer Loyalty
3. Simplicity and honesty
Make the shopping process easy and simple. As more people turn to online channels for shopping, it's important to make sure they understand how to shop. Whether it's an HDMI cable, a pair of headphones or the latest 4K monitor, we shouldn't just splash products on a page and leave it up to customers to figure out what they want. Brand loyalty is built from a company delivering against its brand promise 365 days a year, not just during the holiday season.
4. Consumer-centric design
Never discount the process of shopping. Be easy to find, easy to shop with and easy to buy from, to reduce unnecessary anxiety. Each of these shopping stages has to provide customers with the ability to quickly identify your brand, find the products they desire, seamlessly check out products and then rapidly receive them via shipping, will call, retail, etc.
According to a new study, by the end of this year, digital interactions will influence 64 cents of every dollar spent in retail stores. That said, it's important to have a mobile-responsive site to cater to consumer shopping behavior anywhere, anytime and on any device. A retailer must focus on site optimization and user experience to curate its shopping destination, where customers can try a new product, and if they like it, come back and advance with the company.
So, understand and track your customer's experience; and track if and where conversion breakdowns occur. Further, make sure your website is designed as a complete entity: No one page is designed by itself but rather as a total, connected experience taking into consideration both your current customers and those you are looking to acquire.
5. Service and support value proposition
What is likely to be the be-all and end-all battlefield is how you take care of your customers. Online commerce was once all about price and availability, and service was an unexpected plus, if it occurred at all. Today, however, customers demand the ability to interact and be treated exceptionally. They want a brick-and-mortar experience online; and those who do this well make that experience easy, by incorporating chat, customer service reps and tech support that offers pre- and post-sales assistance.
We are living in an exciting yet challenging time. The Internet and mobile devices have forever changed how consumers buy and retailers sell. In today's digital retail, consumers are more empowered to make their buying decisions; and given the prevalence of social media in everything we do and say, those consumers are perhaps more influential than ever before.
Changes that the digital space has created are providing retailers with deeper, longer-lasting relationships with their customers. And retailers are allowing those relationships to drive greater disruption and innovation.
Knowing what customers value is a tireless challenge, to be sure. But if you concentrate your efforts, you can develop a solid understanding of how to serve those customers better.
Related: 7 Tips to Knock Your Online Customer Support Out of the Park
