Retail customer engagement: All you need to know for 2023

Content Marketing Specialist

Monika Karlović

Content Marketing Specialist

Customers are becoming more and more demanding of retailers, with their expectations for flawless customer service and experiences quickly becoming the norm. So how can retailers stay relevant?

For starters, retailer’s should develop a personalized customer engagement strategy.  

But what does customer engagement mean exactly, and how do you implement successful engagement in your business practices? This blog will walk you through all you need to know to make your retail business thrive off relevant engagement. 

What is customer engagement?

Simply put, customer engagement is how businesses strategically interact with their customers. These two-way interactions are meant to build relationships and brand loyalty to ensure businesses can easily retain customers. 

Modern customers have high expectations when interacting with retailers, which means every interaction counts- and how you deliver that interaction matters as well.  

Engaging customers over the right digital channels can help elevate your engagement results. Customers are more likely to interact with your brand over channels they are already using. It entices them to purchase from a retailer who understands their needs and their preferred communication channel. 

Why is customer engagement important?

There is no doubt that relevant engagement can help boost sales and reduce churn. 80% of customers say that the experience retailers provide is as important as the product they purchase. 

Retailers should keep these statistics in mind when considering if they should invest in an engagement plan:  

Meeting customers’ expectations can be challenging, but it will give retailers a competitive advantage against others who are slower to adapt to such practices.

Our Enterprise Team Lead, James Stokes, gives insights on how retailers should consider engaging with customers:  

Customer engagement vs. customer service

Customer engagement often gets confused with customer service. So, how do they differ?

Customer service is the actual help or support customers get from retail representatives, usually initiated by the customer.

Engagement is the connection a retailer builds through their communication with a customer, including through marketing or sales interactions. Customer engagement interactions can be initiated by brands or by customers.

Customer service is a way of engaging with customers and ensuring they receive the support they are looking for. Still, it is not the only way to interact with customers.  

Engagement can take many forms and occurs throughout the customer journey, not just when they seek support: 

  • Send push notifications through your app to notify customers of promotions 
  • Bring customers back to their abandoned cart with an SMS reminder 
  • Help customers shop on channels other than your website, such as through WhatsApp or RCS 
  • Invite customers to provide feedback through surveys on their favorite chat app 

What are the five stages of customer engagement?

Customer engagement in retail usually happens in five stages. It’s important to note that these stages may not always occur in the same order, and customers can move back and forth between them. Effective customer engagement involves understanding and addressing customer needs at each stage to foster long-term relationships and drive business growth.  

1. Awareness

This is when customers become aware of a product, service, or brand. It can happen through various mediums like ads, word-of-mouth, or online searches. The goal is to capture the attention of potential customers and make them aware of what you offer. 

2. Interest

Once customers are aware of a product or service, they move into the interest stage. Here, they actively seek more information, explore features and benefits, and compare offerings from different providers. Marketers need to provide compelling content, engage in conversations, and highlight unique selling points to keep customers interested. 

3. Consideration

Now that you’ve grabbed their attention and interest, customers start to consider purchasing your product or service. They assess the value, quality, pricing, and reputation of your product and brand. This is an important stage where companies should provide detailed information, case studies, testimonials, and clear differentiation to persuade customers to go through with their purchase. 

4. Conversion

The conversion stage marks the point where a potential customer makes a purchase decision and becomes a paying customer. It can involve completing an online purchase, signing a contract, or any other action that signifies a commitment. Businesses should ensure a smooth buying process, offer incentives, and address any concerns or objections to facilitate conversion.

5. Loyalty

After making a purchase, customers enter the loyalty stage. Here, businesses aim to turn satisfied customers into loyal advocates who continue to support and promote their brand. Building strong relationships, providing excellent customer service, seeking feedback, and offering rewards can help foster loyalty and encourage customers to recommend the brand to others.

How to improve your customer engagement framework

A customer engagement framework will help define the approach retailers will take in making sure their customers are engaged. Let’s break down an engagement framework that will help retailers get started:

Research and prepare: use user behavior and collect data to build buyer personas. Get to know your customers’ needs and intent when interacting with your brand.

Customer journey mapping: build a customer journey for each persona. Identify the pain points and touchpoints and how they currently interact with your brand. This can help identify potential touchpoints to improve engagement.

Engagement strategy: Use the customer journey to determine the highs and lows of your current engagement. To build a plan, use customer data to find their preferred communication channels and how they want to interact with your brand.

Platforms and technology: Integrate an omnichannel platform that helps implement your engagement plan and offers various channels to boost communication. Create workflows and automated messaging and campaigns to improve overall engagement.

Metrics: Measure ROI, customer satisfaction, churn rate, net promoter score, and more to determine how well your engagement plan works and how to adjust for future engagement.

Customer engagement matrix

Successful engagement will turn customers into brand advocates. They will recommend your business to others, be more inclined to try new products, and continually return to repurchase.

Pansari and Kumar created four customer engagement matrix categories to better understand how different customer relationships work. Retailers can determine where customer relationships can be categorized based on their engagement. The matrix categorizes customers based on their satisfaction in relation to the emotions they associate with a particular brand.

Low satisfactionHigh satisfaction
High positive emotionsPassion altruistic focusedTrue loveengagement focused
Low positive emotionsIndifference fill need focusedAttractions value focused

“True love” should be the target goal for every retailer. When a customer is highly satisfied and associates positive emotions with a brand, their brand advocacy, loyalty, and engagement go up, making them easier to retain.

What is a customer engagement platform?

A customer engagement platform is software that helps retailers target, engage, and retain customers. Integrating an engagement platform will increase customer engagement.

Infobip Moments is an all-encompassing omnichannel engagement solution. It allows retailers to build engaging communication flows and automate engagement based on event-triggered or behavior-triggered situations.

customer engagement platform

Retailers get a full view of who their customers are and how they communicated with the brand in the past. This will help retailers know what campaigns are relevant to customers and which channels they should use to maximize engagement. Retailers can ensure that every message and every moment is meaningful and relevant for the customer.

Customer engagement goals

Setting measurable customer engagement goals will help retailers create a clear understanding of what they want to achieve. Let’s walk through insights and objectives that will help you set the right goals for your business. 

Customer engagement insights

What should you learn about your customers before interacting with them? Everything you possibly can. With the looming death of cookies, retailers need to learn about customers from the insights they collect in their interactions. Get to know your customers and understand what they are doing and why they are doing it to offer them the best engagement.

Here are a few characteristics and insights to consider as you build your customer engagement goals:

  1. Demographic 
  2. Purchasing behaviors
  3. Feedback they provide
  4. Campaign clicks
  5. Campaign purchases
  6. Cart abandonment
  7. Spending range
  8. Pain points in the customer journey  

Customer engagement objectives

Before constructing your engagement strategy, carefully define your objectives. What do you want to accomplish and why? Some common objectives include:

Improve brand image

Positive engagement will lead to an overall positive image for your business. Retailers should think of every customer interaction as a conversation with a friend and use their tone of voice to convey their company persona. Use what you know about customer likes, beliefs, and past behaviors to build conversations that will carry meaning for them. It’s a great way to add a human touch to digital interactions and will help you build a positive image for your brand.

Boost overall experience

Every interaction contributes to the overall experience. Retailers can make the most of engagement by doing their due diligence and finding pain points and ways to optimize every touchpoint in the customer journey. By doing this, they can gain insight into how engagement can help improve customer experience and entice them to return in the future.

Make it personal

You’ve established your persona and determined how and when to connect with customers. It’s time to make every interaction personal and about them. Since you’ve collected data, you know enough to add greater value to the conversation. Use birthdays or anniversaries to send special discounts just for them, showing them that you know more than their name and value their business.

Online customer engagement metrics

Retailers can measure the success of their engagement by using a variety of different calculations:

Customer engagement plan

Addressing your customers’ needs is the key to customer engagement strategies: 

  • Be empathetic and supportive: showcase your brand’s values by caring for your customers.  
  • Be where your customers are: adopt an omnichannel engagement strategy and expand home delivery options and contactless options.  
  • Be mobile-first: migrate customers to digital channels to stay safe and on-trend.  
  • Be agile: react to customer sentiment and proactively engage.  

Here are some tactical steps you can take using customer data to build an engagement plan:

1. Analyze customer purchasing habits

Your customers’ shopping habits have changed. It’s time to revisit your customer data and identify those segments. This will help retailers identify critical attributes and behavior of customers to serve their changing needs better.

When customers get relevant messages, they are more likely to start engaging with your brand and purchase more frequently. During the holiday shopping season, you can collect an immense amount of data around purchasing and browsing habits to help boost experiences post-holiday season and for the following year.

2. Personalize your communication

Retailers should pivot towards a more empathetic communication tactic that acknowledges customers’ shift to online environments over the past two years.    

The importance of relevance, personalization, and content value significantly increased in the last few years. Many brands have excelled with the personalization and relevancy of their content, making the competition greater.   

Here are our top five ways to personalize your interactions with customers:  

3. React and adapt with insights

You know the importance of having real-time reporting and analytics. Understanding customer behavior lets you know which channels are generating the highest ROI and which are underperforming.

Set campaign goals and analyze customer behavior and sentiment to ensure empowered marketing communications. Understanding the brand journey and buying process for each customer will help you support them with the appropriate messaging in the future.

Without real-time information with easy-to-navigate and customizable dashboards, you are missing out on sales growth from 8-25%.

Tracking the success of your campaigns allows you to create personalized offers over the best-performing channels for the quickest engagement and conversion while providing you with the best ROI.

Insights to look for:

Customer return rate

Repeat order rate

Website inbound traffic sources

Onsite and in-app journey bounce points

Add to cart rate vs cart abandonment rate

Location-based demand

4 ways to engage with customers in retail- tips and techniques

Customer engagement in retail is more important than ever before. To succeed, retailers must adjust how they communicate with their customers. Here are some engagement tips and techniques to help retailers succeed with engagement.

1. Mobile and chat apps: the key to omnichannel strategies

You currently have one or several digital channels to communicate directly with your customers. But how well do these channels work together? An omnichannel approach combines multiple digital channels into a single customer engagement channel. It improves direct communication with your customers – a must-have for retail and e-commerce companies. In fact, 87% of retailers find omnichannel critical to their success.

This is the smartphone era, and with nearly 75% of consumers shopping on more than one channel, you need to be prepared to engage them over as many of these channels as you can.

Twenty-six percent of retailers do not have an omnichannel integration strategy. According to Harvard Business Review, this is leaving money on the table. Targeting customers with omnichannel marketing results in a 10% increase in customer spending.

Messaging apps, with SMS and email as failover options, enabled richer customer engagement during a turbulent 12 months.

Many messaging apps offer design “carousels,” prebuilt smartphone layouts for displaying retail products. Most importantly, some messaging apps enabled customers to purchase goods from menus and make secure digital payments.

SMS has been the staple, lightweight communications tool for quickly connecting to customers. The value of SMS (relative to voicemail and email) has been a combination of high open rates, quick responses, and ease of use across smartphones. However, such information tends to be basic, usually constricted to one-way notifications consisting of texts and URL links.

But when used alongside chat apps, retailers can engage customers using emojis, pictures, videos, QR codes, and menus.

The top must-have chat apps and channels to help boost customer engagement during the pandemic included:

2. Time-sensitive messaging: Fast authentication for faster conversions

Many customers who visit your site over the holiday shopping season may not have an account with you. In the race to get the best deals before everyone else, you want this to be a quick process for your customers.

At least 53% of Millennials will be browsing deals this shopping season on their mobile and then later buy on desktop. Wouldn’t it be better if you could get the conversion while they’re on their phones? Authenticating their accounts via SMS without abandoning the checkout process results in faster conversions while also improving the customer experience.

Don’t forget that security gives shoppers and businesses peace of mind. Two-factor authentication over SMS is a fast way to keep customer accounts safe. It combines two factors: something only your customers know with something only they have. For example, they can use their password and mobile phone for secure checkout on mobile and desktop.

3. Streamline checkout for mobile shoppers: Instant conversions on mobile

A recent survey shows that 28% of shoppers abandon their purchases during checkout, citing “too long or complicated checkout processes.” Couple this with the fact that at least 53% of Millennials will be browsing deals over their mobiles this shopping holiday season. It would be best if you considered how streamlined your mobile checkout is.

To improve customer experience and drive revenue, there are ways you can boost security and user experience at the same time.

Mobile Identity is the quickest verification solution. Mobile identity will help you streamline your entire mobile checkout process with personal data verification and instant form filling. Now, customers can complete their purchases on their mobile devices without getting interrupted, increasing the likelihood of completing the purchase instead of abandoning their cart.

mobile identity verification

4. Customer care messaging: Customer happiness still matters (a lot)

As a retailer, you’re aware of the importance of customer care. After all, you know it costs less to retain an existing customer than to acquire a new one. By adopting an omnichannel approach, you’re on course to retaining 89% of your customers.

And it gets even better for companies who engage customers across all channels with personalized messaging. These retailers see a 30% increase in life-time values. Part of the reason for this increase is that companies with omnichannel strategies notice 23% higher customer satisfaction rates.

On the other hand, 82% of customers have taken their business elsewhere thanks to a poor customer experience. Customer care works both ways – if you aren’t careful around the shopping season, you risk losing the customers you’ve tried so hard to convert throughout the year.

Improving customer engagement in retail

So, retail brands need to empower themselves to adopt digital interactions and humanize their communications with customers to meet their expectations.  

While it may seem like a lot to do – researching, strategizing, collecting data, segmentation, personalization and omnichannel automation will help marketers easily navigate through the retail landscape with an omnichannel powered customer engagement hub such as Moments. Empowering and enabling you to create digital connections at the right moment, with the right message on the right channel.

Give your customers the experiences they want with meaningful engagement

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Apr 14th, 2023
15 min read
Content Marketing Specialist

Monika Karlović

Content Marketing Specialist