How To Build Lasting Consumer Loyalty Amid Pandemic-Fuelled Supply Chain Chaos

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Amid supply shortages, port congestion, and price inflation, two-thirds of Canadians in a recent KPMG in Canada poll say they are frustrated by their online shopping experience and miss the in-person one, ratcheting up the pressure on retailers to excel or risk losing loyal customers.

Against this backdrop, KPMG’s new 2021 Customer Experience Excellence (CEE) report underscores the importance of organizations putting customers front and centre in their entire supply chain to build a solid foundation for excellence and enduring customer loyalty and advocacy.

The report, based on 11 years of KPMG global research, utilizes six pillars of experience that explain how companies are navigating the new environment and how they have performed in terms of customer experience. The six pillars are:

  • Integrity, acting ethically and demonstrably in the customers’ best interests
  • Resolution, focusing on proactively addressing customer problems
  • Accurately setting customer Expectations
  • Reducing the Time and Effort customers need to expend by enabling frictionless digital and, where possible, physical interactions
  • Delivering a Personalized experience with
  • Empathy and compassion.

“The brands that have been the most successful during the pandemic and this supply chain crunch are the ones which mastered the six pillars and built lasting trust, loyalty, and consumer advocacy,” says Katie Bolla, Partner, GTA Consumer and Retail Industry Lead, KPMG in Canada. “Our poll findings show that most Canadians have grown dissatisfied with their online shopping experience and crave that in-person environment. That puts pressure on retailers to deliver on their brand promise at the very time when there’s immense strain in their supply chains.”

The CEE report finds that personalization was the biggest driver for customer loyalty among retailers, while expectations had a significant impact on customer advocacy. Non-grocer retailers scored strongly across all six pillars and earned the highest scores for integrity and resolution. The two brands that stood out were: Vancouver-based Lululemon Athletica Inc., in terms of resolution and empathy; and, Quebec City-based Simons, which provides turnkey digital marketing services for local artisans.

“In order to build a loyal customer base – one that will advocate for your brand – you need to provide clients with a data-driven experience that is personalized and tailored,” says KPMG’s National Retail Leader Kostya Polyakov. “This will require retailers to make significant investments in data analytics, using high-quality data to drive insights that support decisions around the design of products, services, channels and experiences.”

To better replicate the in-store shopping experience online, nearly seven in 10 Canadians (68 per cent) agree retailers need to think outside the box by using technology to improve the shopping experience. An example of this could be offering virtual reality dressing rooms using augmented reality and artificial intelligence (AI) so shoppers can see what an outfit looks like without physically trying it on. A further 41 per cent like the idea of retailers predicting “what I want, when I want it, and delivering it to my house.”

As well, an overwhelming majority (90 per cent) agree retailers should leverage technology to reduce returns and lessen waste.

Key Poll Findings:

  • 64 per cent of Canadians are frustrated by their online shopping experience, e.g. either the clothing doesn’t fit right or returning merchandise is inconvenient or too complicated
  • 65 per cent “really miss / missed the in-store shopping experience”
  • 43 per cent “really miss / missed cross-border shopping in the U.S.
  • 69 per cent say retailers need to think outside the box to replicate online that in-person experience (e.g. virtual reality dressing rooms with augmented reality and AI to see what an outfit looks like without physically trying it on)
  • 90 per cent want retailers to leverage technology to reduce returns and lessen waste
  • 41 per cent like the idea of retailers predicting what they want when they want it and delivering it to their home
  • 78 per cent say they will switch brands if they can’t get what they want when they want it
  • 79 per cent will switch brands if prices go up

“Many retailers have undergone dramatic digital facelifts during the pandemic, but that’s just the tip of the iceberg when it comes to digital retail,” adds KPMG’s Peter Hughes, Partner and National Leader, Customer Practice.

“Consumers have much higher standards now, and they understand the global forces that affect what and how they consume. Using technology to give customers what they want when they want it will be the next wave of innovation in consumer retail.”

To learn more, including how to build a customer experience strategy, check out “Driving more customer loyalty and advocacy in retail” and the CX Coffee Chats: Retail series with KPMG in Canada’s retail industry specialists on future trends.

SOURCE KPMG LLP

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