4 reasons why customer-centric businesses thrive in the era of social distancing

Customers have always been at the forefront of any business strategy. But beyond basic customer service, the businesses that thrive in a shrinking economy are those with the strongest engagement with their clientele. With the average consumer adopting a more austere approach to spending, as signalled by a dip in retail sales last year, businesses need to prioritise the shifting requirements of customers to excel.

By enhancing customer experience during trying times, brands can build business resilience and strengthen long-term loyalty. In fact, according to a 2020 report by global professional services company Accenture, listening to and meeting core customers’ needs are foundational, and “what sets apart those that will thrive in the aftermath is their ability to anticipate market shifts and react and adapt to new customer needs in real-time”. Here are four reasons why businesses should turn to customers to take the lead during such uncertain periods, and how they can adopt a customer-centric strategy to thrive:

1. Maintain customer loyalty

A COVID-19 Consumer Pulse Survey conducted last year by McKinsey revealed that e-commerce availability and hygiene considerations have triggered store switching behaviour, with “17 per cent of consumers shifting away from their primary store”.

During a time of economic uncertainty, businesses need to be a bastion of trust by adopting an ethos of transparency with their customers — especially amid supply chain disruption and manpower shortages. The recent closure of department store Robinsons in Singapore, for example, saw customers left stranded with unused shopping vouchers or, worse, without products they had pre-ordered.

Furthermore, with several eCommerce businesses experiencing recent security breaches (Redmart, Shopback, Grab), consumer confidence may also be further shaken. Companies should adopt multiple channels of communication with customers to provide regular and relevant updates, placing an emphasis not just on the bottom line, but also on long term reputation. Customer communication strategies should lead with empathy and honesty to help build loyalty in the long term.

2. To retain the human touch

Bots and other automated tools may be great assets to customer service management; however, businesses should explore strategies to maintain human interaction, despite the rise of digital platforms and social distancing measures.

Companies may look to creating a consistent customer experience across all platforms, by conveying the warmth of face-to-face interactions via digital touchpoints. For a start, investing in strong UX copy and design allows for intuitive and personalised communication and wayfinding.

Advances in machine learning have also resulted in intuitive chatbots, armed with the ability to personalise communications by bespoke recommendations based on a customer’s past purchases. However, companies need to identify the shortcomings of such AI-enabled tools, to avoid embarrassing blunders that arise from bots picking up inappropriate behaviour — such as an AI-powered Korean bot that engaged in hate speech — from interactions with humans.

3. To boost DTC revenue

Direct-to-consumer (DTC) selling has seen a huge spike during the pandemic, with DTC sales forecasted to have hit almost US$18 billion in the US alone last year, and more people shopping from home or exploring alternative brands when faced with a shortage.

Businesses may ramp up social listening strategies — the tracking and analysis of social media channels — to better understand their customers, and bank on such analytics to increase DTC sales. Besides being a mouthpiece for brands, media channels can also provide essential insights into brand perception, competitor analysis and growth opportunities. Also, by tapping on data such as a customer’s spending habits, location and preferences obtained through tools like online surveys, brands can finetune messaging to their client base that better feeds their needs.

Furthermore, with brick-and-mortar stores on the decline — as evidenced by the closure of traditional retailers like Robinsons in Singapore and JCPenny’s bankruptcy in the US — brands may focus more on direct outreach via social and online channels instead of costly consignment or wholesale models with retailers.

4. To achieve agility

With consumer behaviour shifting rapidly due to political and pandemic-related influences, businesses need to be nimble to reflect such changes.

Traditional retailers, for one, were especially affected by the pandemic, due to an inability to digitalise fast enough. As Trade and Industry Minister Chan Chun Sing noted during a media address last year: “The structural issues that we are talking about has to do with the ability for people to promote their products online, without a physical shop front. It also allows consumers to compare prices across a broad range of sellers, without even having to leave your house."

US retailers like Walmart, for example, are giving online retailers like Amazon a run for their money with an ability to reduce shipping and logistics costs by making deliveries straight from their extensive network of stores. In-store pickup services can also drive an increase in associated purchases, as demonstrated by US department store Macy’s, which saw a 25 per cent increase in sales before the pandemic.

The pandemic also saw a decline in the usage of traditional communication channels like the landline, text messaging and email by US customers, according to a 2020 survey by cloud communications company Vonage. Instead, there was a global rise in the adoption of video chat by customers to communicate with businesses, with two-thirds of global consumers using video tools more than they were seven months before the survey, as well as voice calls and messaging via social media messaging apps and chatbots.

Whether it is melding digital innovation with irreplaceable human empathy, or maintaining a consistent brand experience across omnichannel touchpoints, companies that can place customers at the forefront of their business strategies are better poised to remain relevant. Through a deepening of the customer relationship, businesses can outperform competitors and even chart new paths for growth, during the pandemic and beyond.