The retail industry always faces the challenge of attracting new customers and retaining existing ones. Given that a 5% increase in customer retention can lead to significant profit boosts, the 2023 holiday season should focus on increasing customer lifetime value over your competitors—now and in the future.
The 2023 Omnichannel Retail Index (ORI) by OSF Digital is a multi-year study of commerce trends through mystery shopping and benchmarking a representative set of brands and retailers, revealing the latest findings on omnichannel and digital best practices. To sparkle this holiday season, brands should personalize marketing campaigns with proactive communications, post-purchase messaging, and invitations for deeper engagement.
Here are six ways to ensure strong holiday sales this year:
1-Leverage the power of AI to optimize a customer’s experience. In 2023, of the brands offering live chat, 72% use automated (chatbot) responses in addition to enabling interaction with customer service agents. With the rise of generative AI, we expect to see more brands using chat bots to provide responses with a rapidly increasing ability to address shoppers’ concerns at all hours of the day, leaving live agents to focus on the most complex cases.
Generative AI will also enable content creation and tools that help shoppers understand how products may fit their needs. In 2023, 15% of brands benchmarked offer a fit tool or visualization to help shoppers determine how a product looks on them.
2-Elevate personalized customer experiences. In 2023, 91% of brands benchmarked display images of items recommended to purchase (e.g., 'May We Suggest' or 'You May Also Like' or 'Customers Also Viewed’) on the product detail page, up 9% from 2015. For repeat visitors, more brands are showing product recommendations on the home page based on a user’s prior visits, with 62% of brands offering this feature in 2023, up 17% from just two years ago. In the cart, offering recommendations for purchasing additional items has increased steadily, up 14% from 2018.
Making digital experiences more relevant should be a focus; in 2023, only 53% of brands benchmarked included recently viewed products on the product detail page, up 15% from 2018. Product detail pages can make it easy for shoppers to return to their desired products. Use geolocation to provide easy access to a shopper’s store and use a customer’s data to personalize product recommendations.
3-Maximize your loyalty program to dazzle customers. With increasing marketing costs and more retail options for shoppers, loyalty programs have gained significance with the brands and retailers in the Index. In 2023, 77% of benchmarked companies offer a loyalty program, up dramatically since 2015, when only 48% of brands offered loyalty programs.
We suggest using a tiered loyalty program and offering your customers special benefits for participating, such as pre-sale inventory, early releases, exclusive offers, or events. Offer an app to show transparency of how customers can “earn or burn” points, maximize your loyalty program, and encourage engagement from your shoppers. Some programs allow you to share points with friends and family, immediately creating a new loyalty member, which can be a more valuable way to grow loyalty members.
4-Optimize BOPIS for customer convenience. In 2023, 82% of brands benchmarked offered BOPIS, more than tripling since the first ORI when only 23% of brands offered the service. BOPIS often requires investment in order management and inventory systems integration, but it is well worth it. Nearly 60% of brands also increasingly allow users to refine their selection to show only what is available in their local store.
To stay competitive, ensure you provide customers with the most seamless shopping experience using automation. Whether communications or warehousing, as customers continue to order at high rates, you’ll need your front and back-end systems to help you fulfill standards and keep loyal customers.
5-Offer customer service touchpoints throughout a shopper’s journey. In 2023, 67% of brands provide easy, persistent customer service elements in the header of their site, the highest of any year benchmarked and up significantly from the 19% of brands benchmarked who provided CS elements in the header in 2015.
In 2023, 64% of brands benchmarked offered live chat, phone, or email details to reach customer service, nearly flat to the 62% of brands that had those details in check-out in the inaugural ORI in 2015. Investing in personalization technology will enable you to leverage insights on customer preferences, anticipating their needs. Connected devices and customer data enable you to develop better customer services to meet their needs, boosting their feeling of understanding and increasing customer retention.
6-Ensure your omnichannel services are supporting your growth.
In 2023, 70% of brands benchmarked had in-store signage that included scannable QR codes to access or download information, a 53% spike since 2018. Brands often have expanded content and product information online. The use of tablets within departments on the store floor peaked at 21% in 2019, likely due to limited use, signage, and shoppers’ increasing reliance on their own devices when in-store.
Also of note: 82% of benchmarked brands correctly geolocated users, up 37% since 2020, and 27% of benchmarked brands call out the shopper’s closest store in the header of the mobile site based on geolocation, up 6% since 2018, when the criteria were introduced.
Ensure your call centers, webchats, SMS, messaging, email, and social media deliver a connected experience, accelerating a customer’s seamless journey. When your services are high quality, you’ll build customer loyalty, accelerate revenue growth, and streamline customer data and digital tools.
See how your company stacks up! Download the 2023 Omnichannel Retail Index and sign up for your free ORI assessment to understand how you deliver on omnichannel best practices compared to the overall Index, your vertical, and your competitors.
Rich Siefert is a Senior Consultant, Practice Lead in OSF Digital´s Strategy group. He has over two decades of executive-level experience at large-scale retailers, particularly in the home categories, with a proven record in strategy, P&L management, and organizational leadership in an omnichannel environment.