Experiential Retail

Why you need a Head of Customer Experience

And how two key events in history changed the retail landscape forever.

In the beginning

There was a time, not so long ago, when retail life seemed pretty straightforward. Everyone had a place and everyone in their place.

Not only that but retailers knew what they were measuring against and how that would be measured. Whether it be sales per square foot, margin, availability etc they knew and felt comfortable, safe in the knowledge that they had a grasp on the business and, every Monday morning, reviewed the sales figures and plotted their path accordingly.

That was in the day when retailers largely dictated, the balance of power was fairly and squarely with them through management of availability, proximity and price.

Something changed – The customer got clever.


Two events shape this change, the first imperceptibly, the second almost overnight. What were they?

On June 29th 2007, Steve Jobs got on stage at MacWorld in California and announced the first iPhone.

Then on September 15th 2008, Lehman Brothers collapsed and the US subprime mortgage crisis developed into a full blown global banking crisis.

The world’s deepest financial crisis since the 1930’s had a far reaching impact, especially on how we chose to spend and this in turn meant that retail was caught in the eye of the storm.  

 The Rise of the Savvy Consumer

In the wake of the financial crisis came the dark days of austerity and with it a new type of consumer. Our attitudes shifted, no longer were we loyal to any particular brand; ‘butterfly consumerism’ – whereby we moved seamlessly and swiftly from one brand to another in search of value and great experiences – became the norm.

A 2015 study by Vision Critical found that 42 percent of Americans will stop shopping with a brand after just two bad experiences, regardless of whether they belong to a loyalty program or not. Even the customers who spend the most at your company aren’t necessarily loyal. According to the advisory firm McKinsey & Company, 25 to 50 percent of a brand’s highest spending customers also shop with its competitors.

You No Longer Own Your Brand

That announcement by Steve Jobs didn’t exactly go unnoticed, queues formed overnight for people to get their hands on the new iPhone. up until then, fed on a diet of Nokia’s, who’s USP’s were at best derived from size or colour, the new ‘smartphone’ was a thing to behold.

Little did we know that this device in our pockets was to help drive a retail transformation, the like of which none of us had witnessed in our lifetimes.

We could talk endlessly about social media, suffice to say for now that whether your preferred channel of choice is Twitter, Facebook, Instagram, Snapchat etc or a combination of all of the above (more likely) the scenario of an always connected consumer, powered by the ability to broadcast virtually from anywhere at any time is indeed a potent one. All this took retail brands by surprise.

Still today there are very very few retailers and brands who use the power of social to truly engage with their customers; instead preferring to monitor and broadcast.

In today’s retail world that doesn’t cut it. Customers not only need to feel engaged with a brand, but have trust in it and feel that they are being listened to; ignore this at your peril.

Customer engagement leads to customer retention. Research by Rosetta Consulting, for example, found that engaged customers are five times more likely to buy only from the same brand in the future.

The likes of United Airlines should take note!

experiential shopper

It’s All About The Experience

We’ve established that the consumer of today is a very different creature than that of only 5 years ago. What is perhaps the most defining quality of today’s consumer is that expectations are so much higher than in the past.

No longer is it sufficient to simply throw open the shop door, invite us in with attractive prices and offers and expect that we will come in droves.

In today’s world, we are seeking an experience.

Millennials in particular value the experience over the value of the goods they are purchasing whether in store or online. Whilst the baby boomer generation gathered ‘stuff’ and we tended to value ourselves based on the ‘things’ we have in our lives, millennials and Generation Z value experiences. According to a Walker study, by the year 2020 customer experience will overtake price and product as the key brand differentiator.

Not convinced yet? Here’s the thing:

According to Deloitte, 62% of companies view customer experience delivered by contact centers as a competitive differentiator.

Therefore, if you want your customers to stay loyal, you have to invest in the experience. As a result, Gartner predicts that by 2018, more than 50% of organizations will redirect their investments to customer experience innovations.

Maybe it’s time to go hire your new Head of Customer Experience? In part two of this blog, I’ll look at what this role represents and how, very quickly, it’s changing retail for the better.