Navigating Evolving Customer Expectations in the Retail Landscape

Australia, with its diverse and incredibly dynamic market, stands as a crucible for retail evolution, a melting pot where consumer expectations play a pivotal role in steering the course of our industry. 

In this article, I’m going to dive into the data and explore the transformative impact these evolving expectations are having on our retail landscape, as well as what actionable insights we can take for the road ahead. 

• The enduring appeal of brick-and-mortar stores
• Clicks and Mortar: physical and digital come together
• Striking the right balance between online & offline channel strategies
• Rethinking loyalty beyond discounts
• Building engagement through omnichannel strategies
• How will you navigate the evolving retail landscape?

The enduring appeal of brick-and-mortar stores

Let’s start with the role and enduring appeal of brick-and-mortar stores.

Contrary to the narrative of physical retail falling into the shadow of eCommerce dominance, recent data from Lightspeed’s Customer Purchasing Trends report has revealed the vast majority of customers across different sectors still prefer to visit stores. 

This is particularly true for the healthcare and pet supply sectors, with two-thirds of customers preferring in-store experiences.

When we get more granular, Lightspeed’s survey data reveals that 25% of shoppers are more likely to visit a local store to get unique and locally-made products. 34% of shoppers say access to special deals for locals is a key driver when it comes to visiting local stores. 

The tangible experience offered by brick-and-mortar still holds a fundamental attraction for customers, challenging the widely accepted assumption that physical retail is in its sunset years.

The power of the physical store lies in its ability to create a true connection with consumers. When we talk about the appeal of brick-and-mortar stores, it’s not about transactional efficiency; it’s about human interaction and the connection to a brand’s identity. Retailers who recognise and harness this emotional resonance won’t just survive – they’ll thrive.

Clicks and Mortar: physical and digital come together

So, how do we navigate the delicate dance between traditional storefronts and the digital frontier? 

Here’s what Lightspeed’s data has revealed–56% of shoppers say the ability to see products in real life, including getting access to samples or trials, is important enough to encourage their decision to shop in-store over online. A further 46% of shoppers also want to compare items in person. 

Now – it’s important to recognise that customer experience isn’t only covered in-store. It also includes how customers see your product in advertising, digital marketplaces, product reviews, and even communication they receive and experience they have before and after they make a purchase.

For example: The research shows that accessibility significantly impacts the consumer decision-making process.
37% of shoppers say that poor proximity to public transport or parking is a deal breaker, as limited ways of getting to a store reduces the incentive to shop there. 

Any inconvenience will prove to be a detriment to a customer’s experience and may even send them into the open arms of a competitor. 

Inflexible return policies are another deterrent, with 37% of customers stating that a restrictive returns policy will stop them from visiting a store.  

So how do we drive that healthy marriage of Clicks and Mortar? It all comes down to creating a satisfying customer experience. From the initial product research online to visiting a store, to how staff interact with customers, to ease of checkout.  

This holistic approach to customer experience isn’t merely a strategic option; it’s a survival tactic in the evolving consumer journey, where touchpoints are woven intricately between physical and digital realms. 

Striking the right balance between online & offline channel strategies

Bringing online and offline strategies together is so crucial to create a nuanced shopping experience. 

Lightspeed’s Marketing & Loyalty partner, Marsello, reveals that online strategies are, in fact, funnelling more customers through the door than you may think. 

For all orders attributed to one-off email blasts, 76% were made in-store and 24% were made online. 

Meanwhile, orders attributed to automated email sequences, 65% were made in-store and 35% were made online. 

This statistic is a resounding call to action–if your online and offline customer experience are not synced you stand to lose revenue. 

A holistic brand experience

Remember these statistics? 

A considerable amount of shoppers are willing to visit stores, for unique products or deals for locals. If you do offer these, this is where your digital advertising can cut to the bone and geo-target prospects to get them into your stores. 

Retail leaders, the future lies in mastering this synergy and recognising that the consumer journey is no longer a linear path but a tapestry where each thread represents a touchpoint between physical and digital interactions. 

The integration of online and offline experiences isn’t just about offering convenience; it’s about creating a holistic brand experience. 

The data is crystal clear – the future belongs to those who can seamlessly harmonise their channel strategies, providing a beautifully seamless experience across all consumer touchpoints. 

Rethinking loyalty beyond discounts

Loyalty programs are also undergoing a transformation, moving beyond traditional discount-driven models to more personalised offerings. 

2022 data from Statista on loyalty program usage behaviour among consumers in Australia reveals that 68% of customers will shop more frequently with brands that have a loyalty program that resonates with them. 

60% of customers said they will spend more with brands that have a loyalty program they like, and 54% will recommend those brands to others. 

For example, The North Face’s XPLR Pass is a loyalty program that goes beyond discounts by tapping into the outdoor adventure ethos that the brand shares with their target market. 

Customers earn points by bringing a reusable bag to North Face stores or by checking in to a national park via the North Face app. The loyalty program isn’t focused on making customers spend more money; it’s genuinely encouraging and rewarding sustainable practices and adventurous spirit their customers are already participating in. 

From the customer’s perspective, they’re being rewarded for simply being themselves. It’s a great example of how a loyalty program can validate a customer’s philosophy and seamlessly integrate a brand into their lifestyle. 

In essence, loyalty is now a reciprocal relationship, where brands invest in understanding their customers, and customers reciprocate by choosing to stay loyal. This reciprocity is not solely transactional; it’s emotional. 

Fostering connections

Shopper data from Marsello pulls back the curtain on how effective loyalty programs are when enticing customers to make a purchase. For all orders attributed to loyalty programs, 84% were made in-store and 15% were made online. If loyalty programs are becoming more personal, then that needs to start with in-person interactions in-store. 

Brands that invest in building real connections will witness a higher lifetime value from their customers. Discounts for birthdays or loyalty program milestones are some of the most simple yet effective ways to build these connections. 

To achieve this level of connection, brands need to use their customer data to identify buying patterns and preferences and use that insight to anticipate customer’s needs. 

In this era of heightened consumer expectations, the concept of loyalty programs is evolving from mere point systems to comprehensive loyalty ecosystems. 

Brands need to leverage data to understand customer behaviours and preferences, so they can offer personalised experiences that go beyond transactional benefits. 

Building engagement through omnichannel strategies

To successfully build customer loyalty ecosystems, retailers need to dial omnichannel engagement up. 

The term “omnichannel” is not just a buzzword; it’s a strategic imperative. It involves creating a unified brand experience across all touchpoints. 

In this context, let’s explore the role and appeal of brick-and-mortar stores in more detail. Beyond their role as transactional spaces, physical stores serve as brand ambassadors, providing an immersive experience that cannot be replicated online. 

Lightspeed’s data reveals that 45% of shoppers will research a product online before purchasing in-store. A further 22% of shoppers said they will shop online and click and collect. 

It’s clear that the customer experience is fluid, weaving between physical and digital spaces. 

Insights from Marsello’s customer data reveals that 50% of new customers made their first purchase in-store, and 50% made their first purchase online.

The path forward isn’t a mere integration of channels; it’s a holistic approach that creates a seamless and delightful experience for consumers across all touchpoints. 

In crafting an omnichannel strategy, it’s crucial to leverage technology as an enabler. Mobile applications, artificial intelligence, and data analytics play pivotal roles in understanding customer behaviours and preferences and steering the journey across various touchpoints. 

How will you navigate the evolving retail landscape?

As we chart this course forward, it’s essential to recognise that the future of retail is not a binary choice between online and offline. It’s an integrated ecosystem where each channel complements the other, contributing to an overarching brand narrative. 

This requires a paradigm shift in mindset, where channels are viewed not in isolation but as interconnected components of a broader customer experience.

The evolution of Australian retail and eCommerce is not a passive process of adaptation; it’s a grand transformation. Let us not merely follow the path; let us lead this revolution. Embrace the enduring role of physical stores, master the art of blending in-store and online experiences, find the delicate equilibrium between online and offline channels, redefine loyalty through personalisation, and, above all, march boldly into the future by building engagement through omnichannel strategies.

As leaders and pioneers, let’s not just meet but exceed the expectations of our customers, crafting a retail landscape that resonates with the heartbeat of every Australian consumer.