Digital Transformation in Retail: A 5-Step Strategy to Optimize Customer Service and Boost Loyalty

The Changing Face of Retail: How the Digital Era Has Transformed an Entire Industry 

The COVID-19 pandemic uprooted the retail industry at every juncture, from supply chains to inventory management to staffing. With fewer in-person shopping experiences, retailers turned to digital for creative strategies to meet customer demand. The cultural shift of the pandemic converged with the Digital Era to forever change the face of retail and create opportunities for retailers to thrive in a new world. 

Though eTail is far from new to consumers, the digital transformation has merged traditional brick-and-mortar with digital eTail in groundbreaking ways. As new advances in technology continually redefine what is possible, retailers benefit from considering how their brand can integrate digital solutions to meet shifting customer expectations. 

Customer Service Is Key for Retailers to Stand Out in a Competitive Market 

Customers expect the convenience, speed, and efficiency of digitally empowered customer service–and brands across all industries are paying attention. According to research by Metrigy, customer experience (CX) is the number one priority for companies increasing their technology spending in 2023.  

The retail industry is no exception. To stand out in a competitive market, retailers are turning to digital tools to provide experiences that keep customers coming back. Though digital integration is critical at every step of the customer journey, customer service has significant power to boost customer confidence and encourage loyalty over competitors. For 92% of customers, a positive customer service experience factors into their decision to make future purchases with a brand. In other words, delivering on expectations for exceptional customer service will create smile-worthy experiences for customers and generate strong returns for your bottom line.

For 92% of customers, a positive customer service experience factors into their decision to make future purchases with a brand. In other words, delivering on expectations for exceptional customer service will create smile-worthy experiences for customers and generate strong returns for your bottom line.  

The Secret to Delivering Exceptional Retail Customer Experiences: Understand Your Customers’ Needs 

Retailers that excel at understanding their customers’ unique needs and expectations can go beyond a one-size-fits-all approach to customer service that delivers share-of-wallet results. Though data mining can provide brand-specific insights, there are broad trends that define the behaviors and preferences of today’s shoppers. These trends form the foundation for a customer service strategy that meets customer needs at every touchpoint. 

High-Tech, Hyper-Personalized, and Hands-On: How Evolving Customer Expectations Ignited the Phygital Retail Revolution  

Customer behaviors and preferences have always changed over time. Technology has accelerated the speed and frequency of trend-shifting to an unprecedented degree. Providing a quality product isn’t enough. Today’s customers expect retailers to provide an experience that makes their brand selection stand out from the crowd. From the moment they walk through the door or open an app to the quality of the service they receive when seeking resolutions, here’s how modern customers differ from customers of days past:  

The Top 5 Things Customers Value Most in a Retail Experience 

1. Blurred lines between digital and brick-and-mortar.  

It’s time to get phygital: today’s customers don’t want digital shopping to replace physical brick-and-mortar storefronts; they want the best of both worlds. “Phygital” retail strives to provide a seamless shopping journey across online and offline channels. Some phygital experiences that retailers have adopted to blur the lines between digital and brick-and-mortar include: 

• Curbside pickup. 
• Scan-to-pay app features. 
• Augmented reality (AR) and virtual reality (VR).  
• Metaverse platforms. 
• Experiential retail concept stores. 

These innovations in the retail industry offer customers the flexibility and convenience to engage with stores on their terms. Tech enablement shifts the focus from product to experience, generating high levels of customer engagement that create tangible returns in sales and customer loyalty.  

2. Hyper-personalized service.  

According to Kiran Mani, managing director of retail at Google, “Personalization is nothing but translating information into assistance.” Big Data is a cornerstone of the Digital Age and can be leveraged to provide customers with the best assistance possible. Data about customer demographics, behaviors, preferences, and needs empowers retailers to provide hyper-personalized service and relatable experiences to customers. Hyper-personalization sends the message that retailers value each customer and significantly improves the convenience, accuracy, and efficiency of the retail experience. 

3. Effective automation and technology.  

Though human employees are essential for resolving many complex customer service issues, most customers prefer automation for simple tasks such as tracking an order, checking order status or balance, modifying an order, returning and exchanging items, and more. In-store robots, intelligent virtual assistants, and intuitively navigable websites and apps are tech enablement options that can increase customer interactions and grow revenue. The caveat? It’s not enough to provide options for automation and tech enablement; these options need to work effectively and consistently. Inconsistent experiences across channels lead to churn for 60% of retail customers. When exploring new technological capabilities, retailers who set a high standard for quality will reap the most rewards.  

4. Brand integrity and transparency.  

Customers value brand integrity and transparency more than ever, with 81% of buyers saying they need to trust a brand to buy from them. Continuity, identity, and community define core values of the post-pandemic customer experience. From honest advertising and pricing to transparent conversations about businesses and their history–including sourcing, product development, diversity hiring, and more–customers choose to buy from credible retailers.  

5. Shared values.  

Conscious consumerism is the name of the game for shoppers in the modern marketplace, a trend that has fueled the rise of corporate social responsibility (CSR). Today’s customers expect retailers to take a stance on social responsibility, sustainability, and other issues that matter to customers on a personal level. From making statements of solidarity on social media to revamping operations and sourcing to be more ethical and sustainable, customers hold retailers accountable and leverage their purchasing power to support brands whose values align with their own.  

Understanding Customer Experience Trends Can Help You Reduce Friction and Boost Your Bottom Line 

As retailers strive to remain competitive in today’s digital landscape, understanding customer experience trends is crucial for success. By paying attention to the changing needs and preferences of customers, retailers can reduce and even prevent friction in their customer interactions and ultimately boost their bottom line.  

Effective customer service strategies play a critical role in eliminating friction by reducing gaps and inconsistency throughout the customer experience. Here are five ways you can leverage customer expectations to build a customer service strategy that delivers a seamless omnichannel customer journey, builds stronger customer relationships, and drives long-term growth.  

5 Proven Ways Retailers Can Optimize Their Customer Service Strategy for the Modern Era 

1. Start with the data. 

Using data analytics to identify your customers’ expectations and behaviors can help you predict the most common issues that could lead them to contact customer service. This data can guide the development of proactive solutions to reduce the volume of inquiries and improve customer satisfaction (CSAT). By accurately gauging customer intent, retailers can provide the type of personalized support that creates smiles for shoppers in the Digital Age.

Data analytics can also guide the development of machine learning models that inform specific operational improvements based on your brand’s needs. At iQor, we provide our proprietary interaction analytics platform VALDI as a service to help our clients mine every customer interaction for this type of valuable data. VALDI uses cloud computing, machine learning, and AI to provide fully customizable analytics guided by each client’s individual and evolving needs. Our tailored approach makes VALDI powerfully effective in meeting the needs of the modern-day retailer for flexibility, personalization, effectiveness, and consistency. 

2. Leverage a full suite of omnichannel support with self-service options. 

Today’s customers are independent, with 69% saying they prefer to solve simple issues on their own rather than relying on traditional customer support channels. The most successful retailers offer comprehensive omnichannel support with self-service options such as chatbots, virtual assistants, FAQs, and other knowledge base resources. These options enable customers to quickly find solutions to their problems without having to wait for a support representative to respond. Effective omnichannel customer service improves customer satisfaction, reduces support costs, and improves the overall customer experience. 

Today’s customers are independent, with 69% saying they prefer to solve simple issues on their own rather than relying on traditional customer support channels. 

3. Prioritize data privacy and security. 

While Big Data and cloud computing are important for providing personalized service, this data must be kept secure. Here are some reasons why security is especially important for the retail industry:  

• 44% of retailers were attacked globally by ransomware in 2021, the hardest hit of any industry. 
• 74% of consumers say data privacy influences their decision to do business with a brand. 
• The rapid evolution of new financial technology (FinTech) such as third-party peer-to-peer (P2P) payment options enables brands to provide flexible, convenient payment alternatives. Customers expect retailers to verify the legitimacy and security of these platforms before offering their services to guarantee that their money and data are transferred securely. 

At iQor, we leverage a multi-layered security approach to guarantee that our client’s data is always thoroughly insulated from security risks. Our dynamic approach to zero trust allows for unparalleled control and real-time endpoint protection. We leverage endpoint security that ensures compliance with all regulatory requirements and provides comprehensive safeguards to secure client data.  

4. Empower frontline agents to resolve customer service requests without escalations. 

Empowering customer service agents to resolve customer requests without escalations can bring multiple benefits to retailers. Empowered frontline agents can: 

• Build trust and loyalty with customers by providing a consistent, convenient, and satisfactory experience. 
• Reduce the workload of management and escalation teams so they can focus on other important tasks. 
• Demonstrate that retailers value their employees by trusting them to handle customer inquiries professionally. 
• Boost agent job satisfaction, increasing the pool of tenured employees who provide the best quality service. 
• Improve customer resolution times (CRT) and other key performance indicators (KPIs).  

The rewards of equipping your agents with the tools to succeed are plentiful when the risks are well managed. In addition to creating a better experience for both your employees and your customers, the investment can result in quantifiable growth for your bottom line. 

5. End with the data. 

Trends and data are continually evolving. Retailers can gain a better understanding of what customers need over time by leveraging data analytics and asking customers directly what they want in a customer service experience. Regular surveys provide data to help inform strategic email marketing campaigns that offer additional opportunities for cultivating deeper customer relationships. By understanding the broader consumer culture and trends to gauge customer behaviors relevant to a brand, retailers can add more smiles to their customer service experience.  

Unlock the Potential of the Digital Age by Harnessing Cutting-Edge Tech and Human Solutions That Represent the Future of Retail 

The digital age has transformed the way people shop and interact with retail brands. Those retailers who responded to these transformations with adaptability and innovation are thriving. By embracing cutting-edge CX technology, retailers can provide a seamless and personalized experience that meets the needs and preferences of their customers. Additionally, excellent customer service and employee training can make a significant impact on the success of retail businesses. Engaging these new opportunities with a flexible, strategic approach provides retailers unlimited potential for unlocking future growth.  

Experience the iQor Difference   

iQor’s omnichannel support experience helps retailers connect with customers on their terms. Our CX experts partner with retailers to design intelligent channel optimization strategies to ensure they align with customer needs. From AI-powered agents to in-app messaging, we apply automation where it matters most to exceed customer expectations for hyper-personalized, seamless omnichannel support. 

iQor is a business process outsourcing company (BPO) ideally suited to help retailers create amazing customer experiences. iQor provides a comprehensive suite of full-service and self-service scalable offerings that are purpose-built to deliver enterprise-quality CX.  

Our award-winning CX services include:   

• A global presence with 40+ contact centers across 10 countries.   
• A CX private cloud that maximizes performance and scales rapidly across multiple geographies on short notice.   
• A partnership approach where we deploy agents and C-level executives to help maximize your ROI.   
• The perfect blend of intelligent automation for scale and performance coupled with an irresistible culture comprised of people who love to delight your customers.   
• Virtual and hybrid customer support options to connect with customers seamlessly, when and where they want.   
• The ability to launch a customer support program quickly, even when you need thousands of agents ready to support your customers.   
• A best-in-class workforce management team and supporting technology to create a centralized organization that can better serve your entire business.  

iQor helps brands deliver the world’s most sought-after customer experiences. Interested in learning more about the iQor difference? If you’re ready to start a conversation with a customer experience expert, contact us to learn about how we can help you create more smiles.  

John Swain is vice president of account management at iQor. Connect with John on LinkedIn.