Retail customer engagement: All you need to know for 2024

Learn everything you need to know about customer engagement in retail and how to build the ideal engagement strategy for your business.  

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? 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?

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. 

Customer engagement vs. customer service

Customer service is the 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 

Why is customer engagement important?

Customer engagement is important if a brand wants to boost loyalty. Why should boosting loyalty be a focus?

60%

higher cost to acquire a new customer
(Source: Business Wire)

67%

more spend from loyal customers
(Source: Business.com)

31%

of customers will pay more to stick with their favorite brand
(Source: McKinsey)

So, to reduce spend on acquisitions, boost ROI, and improve loyalty, a brand’s customer engagement plan but be stellar.

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

How to improve your approach to a 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.

What are the five stages of customer engagement?

To make engagement effective, brands need to address customer needs in a convenient way – usually through unifying the journey over a messaging channel customers love to use and with automation to make operational processes simpler. Let’s cover the five stages of customer engagement and how to accomplish this:   

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. 

Top tip: Launch click-to-chat ads over social media channels like Instagram and Facebook to offer customers easy access to start a conversation with your brand. 

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. 

Top tip: Deploy an engaging chatbot that can answer FAQs about your brands and products. Being available 24/7 and offering fast responses will make all the difference.

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. 

Top tip: Add engaging content to the conversation. Add educational videos to communication flows, images, stickers, and other rich media to better showcase your offerings and products.

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.

Top tip: Make payments simple. With WhatsApp payments you enable customers to complete payments without having to switch applications or leave the conversation.

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.

Top tip: Use customer data to build hyper-personalized campaigns that will re-engage customers, encouraging another purchase with relevant products and messages.

Set 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:

Online customer engagement metrics

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

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.

How to construct a 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:  

  1. Provide incentives to collect customer data
  2. Strategically use customer data for personalization
  3. Utilize preferred channels
  4. Unify data to avoid silos
  5. Personalize in-store interactions

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

Tips and techniques for customer engagement in retail

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. Seamless omnichannel combinations

Your choice of messaging channels and how you orchestrate communication with customers will greatly affect the success of your engagement plan. Customers want to communicate with retail brands over digital channels because of the convenience. Retailers should strategically think about what channels work for their customer journey. From discovery to re-engagement, channel usage can influence how satisfied your customers are with your brand and if they will remain loyal.

Some must-have chat apps and channels to help boost customer engagement include:

  • WhatsApp
  • Viber
  • RCS
  • Apple Messages for Business

These channels are ideal because of the rich messaging capabilities like carousels, videos, stickers, and more that allow you to feature your products within the channel. But make sure you add SMS and email

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. Conversational AI and chatbots

Chatbots are a great tool for retailers to use in their communication strategy. Powering chatbots with Conversational AI can take interactions to the next level.

Conversational AI enables chatbots to engage customers in natural, human-like conversations, making interactions more engaging and enjoyable. Customers can enjoy 24/7 availability, instant responses, and personalized communication while brands lighten the load on live agents and save on operational costs.

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.

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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Mar 14th, 2024
14 min read
Content Marketing Specialist

Monika Karlović

Content Marketing Specialist