Achieving Customer-Centric Retail Growth

Significance of Customer-Centric Growth in Retail

In today’s super-competitive retail environment, customer-centricity has become a strategic necessity for survival and growth. This approach characterises a pivot from a product-based philosophy to a paradigm where the customer has become the focal point of all strategic decisions. With a precise understanding and anticipation of the diverse needs, expectations, and behavioural tendencies of customers, retail brands can come up with value propositions that go beyond the realms of transactional retail. This shift demands winning brand loyalty and transforming customers into brand advocates paving the way for achieving organic growth. Moreover, a customer-centric model leads to leveraging data for personalisation and a more fulfilling and resonating shopping experience covering every online and offline touchpoint. With factors like market fragmentation, rising competition, and increased adoption of D2C and O2O at play, the ability to create and sustain authentic and enduring bonding with customers emerges as a formidable strategy for both growth and survival. This blog highlights four approaches to achieving customer-centric retail expansion and growth with an emphasis on the Middle East market.  

Build a Loyalty-Driven Brand

One of the key characteristics of customer-centric brands is that they focus on building and sustaining a base of loyal customers in the long run. Concerning the Middle East market, retail brands must emphasise the cultural factor, the region’s tech-savvy population, and localisation and personalisation.

The Cultural Factor

Hospitality, etiquette, and community strongly shape and influence the general culture in the Middle East. Retail brands cannot afford to deviate from these standards, and the nuances must be visible in their every big and small loyalty-building endeavour. This begins with a strong focus on the element of hospitality that can include offering traditional welcome coffee and snacks, superior staff training, and creation of places inside stores to relax, socialise, and interact with brand representatives (staff).  Another important area to focus on is prioritising the concept of family, which often encompasses including the family members of customers to be a part of the loyalty programs and redeem benefits from special brand campaigns and promotions. Last but not least is the respect for trust, privacy, and confidentiality.

Delivery of Loyalty Programs – Mobile-First and True Omnichannel

With one of the highest mobile and internet penetration rates in the world, retail brands must emphasise delivering their loyalty programs and making the overall shopping experience mobile-first and true omnichannel in the Middle East. The loyalty program should be accessible via a mobile app. It should serve as a tool from which customers should be able to manage all of their brand interactions and activities. Reward point collection should be made automatic after customers complete their purchases. When it comes to eligibility for any benefits or redeeming them, there should be no distinction between online and offline shopping. Sometimes, different brands from different sectors in a market come together to create one system or app to let customers manage their loyalty benefits from one single place. For example, a food delivery service provider and a cinema hall can join hands to offer cross benefits to their customers (E.g. you buy a movie ticket, you get a certain discount in that restaurant and vice versa).

Localisation and Personalisation of Rewards

Localisation and personalisation do not work with a universal approach. The rewards and incentives emanating from localisation must resonate with local culture and tradition, prevalent values, and standards of living and lifestyle; and in the case of personalisation, with the buyer behaviour of individual customers. For example, during festive seasons, retail brands can focus on communicating the festive message via their loyalty and reward programs and incentives. Or a lifestyle fashion brand could partner with any popular local café with similar target segments under a coalition loyalty program. Many retail brands nowadays also use hyper-personalisation with the help of analytics and AI to offer loyalty benefits curated for individual customers. For example, if a customer routinely purchases a particular product, they may be offered additional discounts – not available to other customers who do not exhibit such a buying pattern.

Drive Personalisation at Scale

Making Use of Customer Data Platform (CDP)

The heart of personalisation is a Customer Data Platform (CDP). A CDP brings together customer shopping journey data from all channels and touchpoints. This makes CDP an essential tool where retail brands and businesses offer an omnichannel shopping experience to customers. For example, a customer might explore an item on a smartphone app while they are at home, then physically visit a store to check the product, and finally buy it online after using a personalised offer.

Various sources from which a CDP may collect data include browsing history, sessions, time stamps, clicks, impressions, abandoned carts, POS data, use of loyalty programs, response to product recommendations and personalised offers, email interactions, social media engagement, etc.

CDP helps create an all-inclusive and holistic view of individual customers, which then could be used for coming up with more effective hyper-personalised solutions.

CDP-Based Personalisation at Scale

With the help of CDP data, AI-based product recommendation models can help brands and customers zero in on the right products. For instance, let us say that the buying history of a customer exhibits a higher likelihood of making a purchase if the price of a product in their saved shopping wishlist is subjected to additional discounts. Now, it becomes easier for that retail brand to better understand and predict the buying decisions of that customer in the near future. This may not be true for all other customers. Different customers may exhibit different purchasing patterns.  

When it comes to in-store experience, customers could be informed on their smartphones, welcoming them, reminding them of their abandoned carts, products they had explored on the store’s website, recommending them products of their potential interest, personalised offers, deals of the day curated for them, etc.

Combined with AI, CDP-led personalisation can also help retail brands guide customers in stores to the sections of their interest instead of having them check out every shelf and aisle. YRC’s retail growth consulting experts maintain that, in deviation from the traditional tactic of letting customers spend more time in stores, today, brands that value customers’ time and effort are appreciated more.

Another crucial outcome of using AI and CDP-based personalisation is more effective dynamic pricing. Now it is possible to adjust real-time prices based on learnt buyer behaviour. For example, AI can help predict at what time of the day a customer is more likely to make a purchase and what they are likely to purchase while keeping in mind their price sensitivities to different products/categories and real-time factors like demand, competition, avoiding overstocking, etc.

Shift from Transactional Retail to Experiential Retail

When talking about customer centricity in achieving   in today’s retail environment, the element of experience is gaining ever-increasing importance.

Modern retail has risen above its utilitarian meaning. It has evolved from being a mere transactional endeavour into a self-indulgent pursuit. Even the straightforward act of buying groceries now involves expectations of gratification.

In present-day retailing, the integration of experience elements into a store’s setting qualifies as a strategic attempt to foster a more appealing and fulfilling shopping journey. Retailers can integrate the element of entertainment by working on areas like architecture and interiors, store layout, visual merchandising, atmospheric elements, interactive technologies, smartphone applications, events and workshops, snacking zones, live telecast of sports events, and personalisation.

Today, retail advisory experts from across the globe agree that social media has started to play a role in shaping retail shopping environments. Posting retail shopping experiences on social media platforms is becoming a norm that is not confined to Gen Z but also a large section of millennials. Experiential retail has to offer real-world content from real-world experiences – something unlikely in vanilla-styled retail environments or in eCommerce shopping.

Experiential retail offers an opportunity for customers to validate what they intend to buy. As an experienced retail consulting agency, YRC underscores that this validation is an essential buying condition for a large majority of customers.

Experiential retail also provides an avenue for customers to get to know their brands better. For example, in segments like luxury, customers are more sensitive to how brands present themselves and their offerings and in what quality of environment.

The pivot from transactional retailing to experience-based retailing is a strategic one. Many retail brands have understood that eCommerce and its omnipresent capabilities could be countered by value propositions that cannot be replicated by purely online shopping platforms. And going beyond, the focus should be on transforming a shopping journey into a memorable shopping experience.

Focus on Sustainability

One of the foremost demands of moving towards sustainability is an all-inclusive assessment and recalibration of the supply chain. This recalibration calls for careful selection of suppliers who already maintain ethical labour practices and meaningful eco-friendly operations. With responsible material sourcing, retail brands and businesses can alleviate their carbon footprint and minimise wastage. It is almost important to ensure that their sourcing tracks are transparent and traceable. At the end of the day, customers should also know that they are dealing with a brand that emphasises sustainability.

Many emerging retail business models show an inclination towards alignment with the fundamentals of a circular economy. There is a growing emphasis on recyclability, re-use, and refurbishment. A circular economy has significant potential to conserve natural resources, limit the processing of natural resources, and make waste management easier and safer for the planet. This is not just an opportunity for the business community to leverage from but also a responsibility and accountability on their part. When done genuinely and transparently, it can significantly help brands and businesses win the goodwill of their customers and the public in general.

Going past environmental concerns, sustainability should also address many important socio-economic aspects. This involves fair wages, safe and suitable working conditions, gender-neutrality, and fair treatment for all across the organisation structure. It is also common for retail brands and businesses to engage in philanthropic initiatives, community support, and charitable causes in different ways. Such involvement and initiatives in socio-economic issues go beyond impressing customers with products and services and help customers better resonate with brands.

Brands may say a lot of things about sustainability in advertisements and social media posts. But the most important place where customers will witness those claims is the store. The brick-and-mortar space must reflect the values of sustainability, which brands claim to live by. On the grounds of sustainability, customers may judge brands on parameters like the use of energy-efficient power usage and practices, degree of reliance on solar power, and retail waste management SOPs and standards. Brands can ask their retail store layout planning consultants to incorporate used or recycled materials in developing layout solutions. So many retail brands already practice using biodegradable materials in their packaging boxes and covers. These efforts are visible testaments to a brand’s commitment to its sustainability narrative.

At the end of the day, what is equally important is to showcase the efforts of sustainability with transparency and evidence. This often includes publishing sustainability performance and analysis reports on an annual basis. Every customer may not necessarily go through these PDFs, but other stakeholders like investors and shareholders may highly appreciate such disclosure. Such communication also helps keep any unwarranted claims of ‘greenwashing’ at bay.

Wrapping Up

With factors like market fragmentation, rising cross-channel competition, and increased adoption of D2C and O2O at play, the ability to create and sustain authentic and enduring bonding with customers emerges as one of the formidable retail growth strategies.

(1) One of the key characteristics of customer-centric brands is that they focus on building and sustaining a base of loyal customers in the long run. Concerning the Middle East market, retail brands must emphasise the cultural factor, the region’s tech-savvy population, and localisation and personalisation.

•         Hospitality, etiquette, and community strongly shape and influence the general culture in the Middle East. Retail brands cannot afford to deviate from these standards, and the nuances must be visible in their every big and small loyalty-building endeavour.
•         With one of the highest mobile and internet penetration rates in the world, retail brands must emphasise delivering their loyalty programs and making the overall shopping experience mobile-first and true omnichannel in the Middle East.
•         Localisation and personalisation do not work with a universal approach. The rewards and incentives emanating from localisation must resonate with local culture and tradition, prevalent values, and standards of living and lifestyle; and in the case of personalisation, with the buyer behaviour of individual customers.

(2) While striving to achieve customer-centricity, retail brands must accentuate driving personalisation and driving it at scale. Customer Data Platform (CDP) helps create an all-inclusive and holistic view of individual customers, which then could be used for coming up with more effective hyper-personalised solutions.

•         With the help of CDP data, AI-based product recommendation models can help brands and customers zero in on the right products.
•         When it comes to in-store experience, brands can share meaningful information to customers over their smartphones every time they visit a store (e.g. about abandoned carts on the store’s website).
•         Combined with AI, CDP-led personalisation can also help retail brands guide customers in stores to the sections of their interest instead of having them check out every shelf and aisle.
•         Another crucial outcome of using AI and CDP-based personalisation is more effective dynamic pricing. Now it is possible to adjust real-time prices based on learnt buyer behaviour.

(3) The element of experience is gaining ever-increasing importance in retail. In present-day retailing, the integration of experience elements into a store’s setting qualifies as a strategic attempt to foster a more appealing and fulfilling shopping journey. In the context of social media, experiential retail has to offer real-world content from real-world experiences – something unlikely in vanilla-styled retail environments or in eCommerce shopping. Experiential retail also provides an avenue for customers to get to know their brands better.

(4) One of the foremost demands of moving towards sustainability is an all-inclusive assessment and recalibration of the supply chain. This recalibration calls for careful selection of suppliers, responsible material sourcing, and trackability and transparency in areas like labour practices, eco-friendliness standards in operations, carbon footprint, and waste management. There is also a growing emphasis on recyclability, re-use, and refurbishment. And going past environmental concerns, sustainability should also address many important socio-economic aspects like fair wages, safe and suitable working conditions, gender-neutrality, and fair treatment for all stakeholders. Ultimately, the brick-and-mortar space must reflect the values of sustainability, which brands claim to live by. It is equally important to showcase the efforts of sustainability with transparency and evidence in the form of sustainability performance and analysis reports on a periodical basis.

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