As cost-of-living challenges intensify, consumers are becoming increasingly cautious when it comes to discretionary spending, and retailers are feeling the pinch, explains Hayley Fisher, AUNZ country manager for Adyen (pictured) in this op-ed.
The Australian Bureau for Statistics (ABS) has said that retail volumes fell for the third quarter in a row. Consumers, as a result, are focusing their spending on essentials, and retailers must find a way to step up their game if they want to weather the storm ahead.
Customer demand is an essential element of survival, but to drive demand, the needs of the customer must be considered. Adyen’s 2023 Retail Report found that 62 per cent of consumers want to see more personalised discounting at retailers they shop with, 43 per cent say they want businesses to remember their preferences and previous shopping behaviours to create more tailored shopping experiences, and 62 per cent would be more loyal to a retailer that lets them buy things online and return in-store.
But what can retailers do to rise to these expectations and put a customer-centric approach at the forefront? By leveraging payments data and enhancing their loyalty offerings, businesses can gain a deeper understanding of their customers’ preferences and have a chance to ensure they’re providing a seamless shopping experience that meets the rising expectations of their customers.
Why do customers value personalisation, loyalty and convenience?
Customers want to be understood, valued, and appreciated as individuals, with unique needs and preferences. This is where personalisation comes in as a game-changer.
It would be remiss to think that customers are only motivated by the price of a good or service.
When businesses tailor their offerings to individual customers, it creates a sense of exclusivity and strengthens the bond between retailer and customer.
Personalised discounting teamed with retailers remembering customer preferences and purchase history, will demonstrate that retailers are invested in their customers. This goes a long way when consumers are rethinking their spending.
Furthermore, loyalty programs have become a crucial aspect of the customer experience. Consumers want to feel rewarded for spending their money, particularly in challenging economic climates, but the nuance is to ensure discounts are relevant with half of Australians finding loyalty programs rarely offer things they actually use.
Arguably the most important consideration in this trio of customer-centric priorities is convenience. The demand for seamless and flexible shopping experiences is rapidly increasing, with Australians showing loyalty to retailers who can offer omnichannel shopping experiences, while a majority (62 per cent) say they’ll abandon purchase if they can’t pay using preferred methods, whether in-store or online.
It’s without consideration of these values, retailers may find themselves at risk of decreased demand. The world of retail is evolving rapidly, and teamed with a retail recession, retailers need to consider very carefully the tools they have in place to help them achieve heightened visibility of customer preferences.
Leveraging tools to attract and retain customers
To cater to the evolving needs of consumers effectively, businesses must delve deeper into their preferences and behaviours.
Retailers hold a broad range of data on their customers, but without the right tools in place, it can be impossible to truly understand the needs of the customer.
As many retailers embrace a unified commerce approach, the cohesive management of in-store and online purchases and experiences, an opportunity is presented to leverage data that will help retailers garner greater insights into their customers.
Tools like Adyen’s Data Connect for Marketing can help marketers link previously anonymous in-store transactions to shopper profiles, unlocking invaluable insights that can inform relevant customer loyalty programs, tailor shopping experiences and drive value.
If retailers connect real-time data from across different channels and payment methods into one centralised view, they’ll be able to see exactly what their shoppers are looking for, when and where they want to get it, and how they want to pay for it.
Rather than relying on third-party data to inform what their customers might want, retailers must utilise tools and rely on their own data if they want to acutely understand customer needs and drive demand.
Navigating the challenges of a retail recession requires a customer-centric approach. As consumer spending becomes more cautious, retailers must cater to individual preferences and provide tailored shopping experiences to foster a sense of exclusivity and strengthen customer bonds. By understanding and adapting to customer needs, retailers can not only weather the recession but also drive demand and thrive in an evolving retail landscape.
