The stats speak for themselves. Firstly, there has been a 169% increase in online purchases from new or low-frequency online shoppers. Secondly, more than 80% of consumers who increased their omnichannel digital usage during the pandemic expect to continue with these.

But could this be a fad? How do retailers keep these new digital customers over the long term?

John Watling, MD in the retail business at Accenture in Africa

In this new climate, retailers need to think more openly about evolving customer expectations and adapt their ways of working to deliver personalised interactions that lead to sticky, lasting relationships with these more digitally focused customers. And while other factors influenced loyalty – like compelling experiences, exceptional customer service and fulfilled needs – developing a differentiated customer engagement strategy will be critical for retailers to maintain brand relevance and cultivate stronger loyalty with these new customers for the long term.

Redefining customer value

Previously, retailers created value (and earned loyalty) through store proximity, competitive pricing, convenience and wide assortments in store. But today, consumers increasingly define value as a personal connection between themselves and a retailer or brand, often founded in shared purpose or values, and nurtured by reliability, service and trust.

Unfortunately, most retailers fail to provide personalised marketing or site experiences to draw new customers to return and continue their relationship with the brand. They still perform generalised communication and promotions for both old and new customers.

In a best-practice digital channel, new customers get plugged into “welcome campaigns” via CRM and begin to receive personalised messages acknowledging their status and nudging them to engage or shop again.

Retailers that don’t follow suit are blowing a golden opportunity to retain these new customers by turning insights into action and providing an experience that recognises their value. Worse still, more digitally native brands are chasing hard after the existing, often highly profitable, customer base of traditional retailers.

On the road to wave three on the retail journey

In our experience, retailers spread across the customer engagement maturity curve along three distinct waves.

In wave 1 – know thy customer – retailers are just starting their digital journey, with a primary focus on understanding the customer. The majority of retailers are still in this initial wave. They have access to customer data and may have small teams that perform customer analytics to support ad hoc operational decisions or reporting. Still, often they lack the understanding, skills and ability to inform deliberate action to engage customers.

In wave two – begin to take action – retailers deliberately structure their data and insights engines to fuel personalised activity. Most retailers in wave two experienced operational drawbacks that prohibited personalisation at scale. Although they have the data and analytics prowess, these retailers find it very expensive and labour intensive to develop their personalisation ambitions further.

Our interest is in wave three retailers who provide full personalisation for each customer. In this wave, retailers deploy one-to-one personalised journeys in a seamless and automated way at scale, usually with the help of artificial intelligence and machine learning, often running on cloud-based systems.

These retailers have made a deliberate and significant investment in their business model, technology, and workforce. They have complete alignment within the organisation that customer strategy is the core priority for the business. They pair analytics and augmented third party data with AI to understand the tastes, wants, and behaviours of individual shoppers – not only demographic and behavioural cohorts – and take predictive actions at the personal customer level at the right time during the digital engagement.

Wave three retailers adopt advanced personalisation, with unique content, messages, and treatment as a core part of their customer engagement strategy. With all these capabilities in place, retailers in wave three are best positioned to create long-term loyalty and customer value over time.

Move from retention to value

* Understand where you are today – Start by answering some fundamental questions: What percentage of your customer communication is personalised? How are you activating personalisation across multiple levers using customer data? Are you adapting to consumer behaviour using analytics and making data-informed decisions?

* Align on customer strategy and gather the right customer insights – Put in place the proper KPIs and analytics to measure customer-centric and retention-focused behaviours and activities.

* Assess your current technology and partner strategy – Determine current gaps in the technical architecture and how best to close these, such as using partners for speed to value where appropriate.

* Turn insights into action at scale – Summarise insights into key themes and outline specific steps that different business teams can own and implement.

* Establish transparent governance – Assign clear ownership and incentives to equip your organisation to deliver on the customer strategy.

The transformation required to sustain customer loyalty is substantial. But retailers that master individually personalised interactions at scale will be best positioned to create value for and retain their new digital customers gained from the pandemic.

Now is the time for retailers to rethink their customer retention strategies and configure their organisations for success, capturing the hearts and minds of consumers for sustained growth.