Customer expectations are evolving - here's how to meet and exceed their demands
- Written by Andrew Fraser, Managing Director, APAC at Lightspeed
Four years is a long time in retail. Since March 2020, Australian retailers have contended with a pandemic, the closure of highstreets, an eCommerce boom and medium- to long-term economic pressures. Resilience, adaptation and evolution have become foundations that businesses have had to rely on as much as their inventory and brand name. For all the direct impacts the last four years had on retailers, the biggest impact could be indirectly; specifically, the way it changed the habits of contemporary consumers.
Today, consumers know what they want, and in a competitive market their loyalty is hard to earn and easy to lose. To acquire and then retain customers, retailers must understand what they want. Through Lightspeed’s Retail Insights and Shopper Sentiment report, we set out to understand what shoppers expect from retailers in 2024. For example, do Aussies shop more online now than in-store? How can their loyalty be achieved? And what role does the long-standing ‘support local’ sentiment have?
Bricks-and-mortar is back (or did it ever leave?)
During the peak of the pandemic, highstreets were locked down, stores were empty and those meaningful face-to-face connections were at a minimum. Consumers and businesses migrated online. So much so, in fact, that even after lockdown ended, the eCommerce boom grew and grew. It’s still significant, according to a report by Australia Post, which found that Aussies spent $63 billion online in 2023. But is the highstreet on borrowed time? Not even remotely.
The tactile, face-to-face experiences that brick-and-mortar stores provide still has a huge appeal. For all the convenience and choice of eCommerce, shopping online will never be able to replicate that. Our research found that 75% of Australians shop in-store at least once a month. What’s more 56% say the ability to see products in real life encourages their decision to shop in-store over online. Based on those findings, and the success highstreet retailers using Lightspeed are having, bricks-and-mortar is here to stay. Its impact isn’t diminished by eCommerce, but amplified when they both work in unity.
Clicks-and-mortar: True omnichannel retail
Shoppers in 2024 don’t frequent just one channel, they’re engaging with brands in-store, via their website, on social media and more. Meeting their needs means being active where they are. So unify your eCommerce and bricks-and-mortar strategies in one unified approach to create a consistent experience that caters to the broadest cohort of shoppers possible. But why? According to Lightspeed’s research, 45% of Aussies research an item online but then proceed to buy it in a physical store.
In addition, 42% said their decision to shop in-store is dependent on whether they are able to check the products’ availability online, prior to their in-store visit. Unifying these two separate channels is hugely valuable. For example, if your customers can use your online channels to find your store locations and opening times, check in-store inventory and register for any events, your likelihood of acquiring and then retaining them increases.
Community and ‘immersive’ retail
Despite the unwavering support we have for local businesses in Australia, you cannot rely on that alone. Give them a reason to enter your store. Building community and offering immersive experiences are effective ways of doing so. A quarter of shoppers are more likely to visit a local store if it offers unique and locally-made products, while one in three are drawn to special deals for locals.
One in four (24%) say they’re looking for businesses who have shared values with them, so determine what you stand for, then use that to build deeper connections with your audience. Use your store as a place to connect, not simply sell, too. Immersive experiences like DIY workshops, demonstrations, or classes are creative, meaningful and often low-cost ways to encourage customers in.
Rethinking loyalty
Deals and discounts will always be head-turners for shoppers. Two fifths of shoppers say the availability of loyalty schemes is an important factor when it comes to their decision of which brand to engage with. Retailers that offer these schemes - including so many of the Lightspeed customers we speak to - have used them to boost loyalty and drive incremental revenue.
But it’s by no means the only way to incentivise loyalty. Shoppers like retailers that provide flexibility and choice, and that also offer more than just products. For example, 19% look for options like click and collect, while 15% want the flexibility of ‘buy now, pay later’ options, while a further 14% say additional extras like repairs, alterations and personalisation are important.
And remember, returns are an unavoidable part of retail - so turn it into a competitive advantage. Over half (53%) consider free returns as standard practice now. If you’re flexible and fair in your post-purchase experience, you can turn an interaction that could be awkward into one that drives retention and leaves a good taste in the mouth.
For all of the challenges retailers have faced in the last four years, the enduring themes have been resilience and adaptability. Retail has been as hard hit as any industry, but businesses today are resolute and have shown an inspiring ability to evolve as their customers have. It’s those traits, and an ability to recognise what shoppers want and how to cater to them, that will separate the best businesses from the competition in 2024 and beyond.
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