Differentiated Shopper 'Experience' Drives Loyalty, Says PwC US

NEW YORK, Nov. 17, 2011 /PRNewswire/ -- With economic conditions heightening consumer sensitivity around purchasing decisions, retailers that design differentiated 'experiences' around their products and services can drive growth, profitability and lasting consumer loyalty, while also maintaining a price premium over competitors, according to a new report from PwC US, titled Experience Radar 2011: Retail Insights.  The study, based on PwC's Experience Radar methodology, measures the experiences of more than 6,000 U.S. consumers across 11 industries.

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The PwC Retail Insights study finds that consumer loyalty is born from shopping experiences that create strong psychological connections, rather than from points or rewards programs alone.  Looking at five core consumer experience attributes -- accessibility, support, quality, presentation and social belonging -- the PwC study is aimed at helping retailers identify what's most important to consumers, and then to develop and deploy an action plan to deliver a great customer experience.  This experience-focused approach can help attract new profitable customers, keep existing customers and increase margins.  

"In today's economy, retailers must identify new ways to set themselves apart, and that begins with a clear focus on customer experience," said Susan McPartlin, PwC's U.S. retail & consumer industry leader. "A single purchase experience can leave a lasting impact on how the consumer identifies with the retailer, so it's imperative that retailers enhance how they serve customers to minimize potential hurdles from beginning to end."

PwC suggests that retailers focus on enhancing service through investing in knowledgeable staff and leveraging front-line employees.  According to the study, product knowledge and recommendations accounted for almost one third of good experiences related to support, while only one percent of shoppers cited rewards programs alone as influencing their purchase decisions.  According to PwC, retailers should consider developing an experience action plan built upon their loyalty program's customer knowledge that strives to achieve five key 'experience enhancers.'

• Focus first and foremost on shopper experience:  Use front-line staff to create experiences that result in psychological connections with consumers.  Invest in service by training knowledgeable staff to help affirm consumer purchase decisions and to prevent buyers' remorse.
• Make customers brand ambassadors: Consumers who experience a positive shopping experience can be the best marketers for retailers, while a single, bad experience can cause widespread damage.  Identify, incentivize and promote brand ambassadors.
• Help consumers avoid risk: Attract new customers by helping them overcome psychological hurdles. Overcome shoppers' worries about losing money on shipping, and press the emotional hot-button of free things.  Reduce consumer purchase anxiety with flexible return policies.
• Embrace the anytime, anywhere economy: With consumers shopping both online and offline, understand their shopping preferences before the competition does. Develop a multi-channel strategy that makes it easy for consumers to shop online, offline, at home or in stores.  
• When something bad happens, fix it: Provide customers with feedback channels as it may not be obvious that they are unhappy until they leave. Make sure that they are happy with the results -- an apology may be enough to create an evangelist.

"Customers, like all of us, are social beings, seeking connection and community," said Lisa Feigen Dugal, PwC's U.S. retail & consumer practice advisory leader.  "When retailers move beyond solely relying on points and develop experiences based on what's most important to consumers, you not only drive loyalty, but you create ultimate brand ambassadors who spread the word on their positive experiences."

PwC's Experience Radar

PwC's Experience Radar helps businesses across industries find sources of value that are often hidden, yet that drive truly exceptional, differentiating customer experiences. Experience Radar identifies opportunities to create value for customers while pointing the way toward top-line growth and bottom-line business results.  Unlike traditional customer segmentations, based predominately on demographics, Experience Radar identifies critical customer segment groups by the types of experiences they value most.  Respondents are divided into clusters based upon the shopping features they value, and behavioral dimensions (like usage rate, loyalty, channel, and technology adoption).

PwC's Experience Radar helps retailers identify where to focus in the quest to please consumers: Experience Enhancers and Experience Segments.  According to PwC, Experience Enhancers are market insights that -- when translated into practical actions -- can create value for consumers and retailers.  Experience Segments group consumers by the features they value, their demographics, and behavioral profiles.

The PwC methodology employs an advanced conjoint survey technique to reveal insights that can be precisely honed. Traditional customer experience studies typically do not tie to "hard economics" like value measures, price elasticity and churn metrics, which Experience Radar does.

For more information and to download an electronic copy of Experience Radar 2011: Retail Insights, visit www.pwc.com/us/retail.

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SOURCE PwC