Retailers Grapple with Decreased Loyalty from Omnichannel Shoppers

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Accelerated growth in the e-commerce space during the pandemic forced retailers to take a closer look at the needs of their online customers. Now, with e-commerce growth beginning to slow, retailers are examining a different type of customer — the omnichannel shopper. Unlike e-commerce shoppers, omnichannel shoppers spend fluidly across channels. They’re just as likely to visit a store in-person as they are online. Omnichannel shoppers can be big spenders, but they can also be fickle. 

Omnichannel customers spend an average of 4% more on every shopping occasion than in-store shoppers, and they demonstrate increased shopping frequency. That increased shopping frequency, coupled with a larger basket size, generates an incremental spend of 16%. However, with that increased spend comes higher expectations. Sixty-nine percent of consumers say they expect a consistent cross-channel customer experience. And that’s just the beginning.

“Retailers are grappling with shopper loyalty at a time when it’s under pressure, with heightened customer expectations and increased competition among new and established retailers,” says Charisse Jacques, general manager, customer and category management solutions at SymphonyAI Retail CPG, a firm that offers enterprise AI SaaS solutions. “If retailers don’t provide an excellent online customer experience from the first click on the first visit, they’re at risk of detrimental churn.” 

The rising share of total business in e-commerce means retailers must understand the value and the changing needs of omnichannel customers, and they should expect to tailor their online experiences to those customers’ needs.

According to CPG data from SymphonyAI, 40% of customers abandon online channels after just one purchase. And when shoppers default from omnichannel back to exclusively in-store shopping, they spend almost 3% less. When this occurs, it’s a signal the customer has begun online shopping with a different retailer, and any loyalty that was built between the customer and the brand has been lost.

Jacques says fostering loyalty is made easier when retailers incorporate technology like AI into their customer retention programs. For example, retailers can use AI to understand what is happening across each channel in real-time, and they can spot opportunities to stay ahead of the competition. 

Although omnichannel customers can be much more loyal than shoppers who exclusively shop in-store, it’s almost always harder to build that loyalty among those shoppers, and churn is prevalent. 

Jacques says sharing customer insights with CPG partners can actually help retailers adjust strategy and tactics in the dynamic retail environment. As the online channel continues to expand, retailers who share those insights will more easily be able to identify and respond to operational changes, like promotion effectiveness, price changes and out of stocks, to better serve customers across channels.

“Retailers require a holistic, data-driven approach to strategically engage omnichannel shoppers and build loyalty,” Jacques says. 

SymphonyAI’s data shows that across all key measures of loyalty—both primary shopper retention and positive migration toward being more loyal—omnichannel customers outperform store-only shoppers. Jacques says it’s important to understand how differently omnichannel customers shop online versus in-stores, so retailers can adjust their approaches to assortment, private-label offerings, promotions and overall communications for each channel.

“It’s important that retailers don’t try to acquire every customer online with expensive incentives since not every shopper will fit the desired profile,” Jacques says. “AI can help identify customers with the most propensity to try out and stay in a new channel where targeted marketing investment can generate the most meaningful lifetime customer value.”

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.