What’s the true cost of a bad customer experience?
For 17% of consumers, it’s just one strike and you’re out.
In today’s hyper-competitive retail landscape, brands aren’t just competing on price or product—they’re fighting for emotional real estate in consumers’ minds. From Chewy’s heartfelt condolence flowers to TOMs’ purpose-driven shopping experience, the retailers who thrive aren’t just selling items—they’re crafting moments that matter.
So, how do you ensure that you’re meeting consumers where they’re at—and exceeding their expectations?
Let’s find out!
What is retail customer experience?
Retail customer experience (CX) refers to every interaction a customer has with a retail brand, whether online or in person. When a customer browses an online or physical store, needs support with their purchase, or signs up for personalized offers, the quality and convenience of that experience contributes to their overall impression of a brand.
But a strong customer experience strategy in retail is about more than quality or convenience alone; it’s also about connection, trust, and satisfaction.
The importance of great customer experiences in retail environments
A single negative experience with a brand can cause lasting damage that needs up to 12 positive experiences to repair. A great customer experience is crucial for business success.
But exactly what kind of results can companies expect from investing in CX?
Revenue growth
Retailers that prioritize CX see substantial returns. In fact, a study by PwC found that 73% of consumers factor customer experience in their purchasing decisions. Investing in how your customers feel when they interact with your brand means they’ll spend more, return more often, and advocate more passionately for your brand.
Customer loyalty and retention
The same PwC study found that nearly 60% of customers will walk away from a brand after several bad experiences, and 17% will walk away after just one.
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Customer churn adds up fast, which is a lot of lost revenue. Rather than investing more in customer acquisition, you should shift gears into investing in retention and expansion plays.
The best way to do that? Personalized engagement, convenient and enjoyable shopping experiences, and helpful post-purchase support.
Competitive edge
In a market saturated with options, retailers need to differentiate—a superior retail customer experience can be a key competitive advantage. Customers are willing to pay up to 16% more for products and services that come with a great experience! Brands that create consistent and memorable experiences rise above the noise and generate buzz that gives a much-needed competitive edge.
Strategies to improve retail customer experiences
Smart retailers invest in both aspects of their customer experience: online and in-person. To enhance digital and in-store interactions, there are several factors to consider.
Improving digital retail experiences
Right now, online shopping accounts for about 20% of retail purchases globally. To take advantage of this growth in eCommerce, retailers need to elevate their digital offerings and prioritize convenience, clarity, and personalization.
1. Responsive customer support
Customers expect help…as soon as they need it. To meet those expectations, be sure to offer 24/7 support that can promptly answer and address any issues your customers may have. Even better if that support is accessible across different channels, such as chat, email, voice, or SMS, so it’s as convenient as possible for your customers.
2. AI-powered support
AI has taken the world by storm, and the retail industry is no different. In seconds, virtual agents can help customers with low-level inquiries like answering common questions, processing returns or exchanges, or managing accounts. This not only helps customers get answers faster—it also frees up human agents for more complex queries. Plus, virtual agents can support customers over a variety of channels, including chat, email, and voice.
3. User-friendly website
A website should be easy to navigate, quick to load, and as clear as possible.
If a site is slow, confusing, or even poorly formatted on mobile, customers will abandon their carts—and nearly 60% of global online shopping is done on smartphones. Investing in a well-designed website is crucial for putting your brand’s best foot forward.
4. Secure and transparent transactions
Customer trust begins with transparency. Be sure that it’s easy to find and understand your return, exchange, and shipping policies to reduce purchasing friction and boost consumer confidence.
5. Personalized shopping experiences
Customers want to feel like the brands they shop with understand them. Create a more engaging journey with personalized experiences, such as suggested products. Smart retail AI tools like Capacity can engage customers as they shop, using full context to recommend products they might be interested in.
6. Personalize communications
Brands like Chewy win customer hearts by sending birthday cards to pets and handwritten notes. Small gestures tailored to individuals turn transactions into relationships, which in turn, boost revenue.
Improving in-store retail experiences
Despite the rise of eCommerce, physical retail is still extremely important and accounts for the majority of sales. Make your in-store experience unforgettable with these tips.
1. Store design and layout
Ever gotten lost in Ikea? There’s a reason for that. Thoughtful layouts can guide customer behavior, increase dwell time, and even boost impulse purchases. Just don’t make it too confusing (or your customers might need help getting out!).
2. Invest in your employees
Staff training is crucial. Empowered, knowledgeable employees can solve problems, make suggestions, and create emotional connections that no algorithm can replicate. Design comprehensive onboarding programs as well as ongoing training so your staff always represents your brand’s mission and values.
3. Set employees up for success
As part of that ongoing training, be sure to provide tools that can help your team work more effectively. For instance, Capacity’s Answer Engine® indexes all your company knowledge in one place, so whether your team is searching for company policies or this year’s catalogue, all they have to do is ask to find what they need. This helps them make faster, more informed decisions and ensures that all your company information is up-to-date.
4. In-store experiences and events
Shoppers love experiences they can’t get elsewhere. Host exclusive product launches, cross-brand collaborations or events, or loyalty-only offers to help drive traffic to your store.
Take a page out of Sephora’s book. Like many beauty stores, they provide a try-before-you-buy option in-store to deliver an experience that customers simply can’t get through their online store. They even have mixed reality (MR) experiences in-store:
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5. Make it personal
It’s about turning shoppers into fans. Loyalty programs, personalized thank-you notes, and recognizing repeat customers by name all contribute to a VIP feeling.
How to measure customer experience
You can’t improve what you don’t measure, and ultimately, you won’t know if you’re delivering a good experience if you don’t ask. Gathering customer feedback and tracking the right metrics can help identify gaps in your retail customer experience strategy so you can improve, optimize, and scale over time.
Net promoter score (NPS)
Net promoter score (NPS) measures how likely a customer is to recommend your brand. This number is calculated based on answers to a customer survey that asks something like, “On a scale of 1-10, how likely are you to recommend us to a friend?”
From there, respondents are broken down into three groups:
- Detractors: Those who gave an answer between 0-6. These are individuals who may actually deter people from buying from you.
- Passives: Those who scored you at a 7 or 8. They don’t love you or hate you. They’re likely just neutral.
- Promoters: Those who scored you at a 9 or 10. These are your fans! People who are likely singing your praises to others.
How to measure: [% of promoters] – [% of detractors].
Why it matters: High NPS indicates strong loyalty and advocacy, while low NPS indicates something is going wrong in the retail customer experience.
Customer satisfaction score (CSAT)
Customer satisfaction scores (CSAT) measure immediate satisfaction after an interaction, such as a purchase or a support conversation.
How to measure: Send a post-purchase or post-support survey asking, “How satisfied were you today?” If possible, ask for details about why they were satisfied or unsatisfied.
Why it matters: CSAT offers a quick pulse on specific touchpoints and can help you improve experiences across the entire customer journey.
First contact resolution (FCR)
First contact resolution (FCR) is the rate at which customer issues are resolved in a single interaction.
How to measure: In your support strategy, track how often customers can resolve their issues with virtual or human agents.
Why it matters: Customers don’t want companies to leave them waiting for answers. High FCR indicates efficient support and therefore happier customers.
Average handle time (AHT)
Average handle time (AHT) measures the average duration of customer service interactions, most often over the phone or via chat.
How to measure: Track how long support interactions last and average them every week, month, or quarter to get a birds-eye view of your AHT.
Why it matters: AHT gives brands a great way to assess and improve efficiency and lower costs without sacrificing quality.
Abandonment rate
Abandonment rate refers to how often customers leave a website or store without completing a purchase.
How to measure: Develop strong customer journey tracking on your website to identify what, if any, points in the experience cause customers to close the window.
Why it matters: High abandonment rates may indicate friction in the buying process, like complicated checkouts, limited payment options, or unclear store policies.
Call transfer rate
Call transfer rate measures how often customers are transferred between agents during support interactions.
How to measure: Similar to FCR, track customers through their support journeys to identify whether a single agent can usually resolve issues.
Why it matters: Lower transfer rates usually mean better service quality and less frustration. When customers have to be transferred, there may be unclear phone menu options, a lack of staff training, or other factors getting in the way of a simple resolution.
5 Examples of exceptional retail customer experience
When it comes to delivering standout customer service, retail brands are finding creative ways to go above and beyond. From thoughtful gestures to personalized tech, these customer service examples showcase how companies can turn everyday interactions into memorable moments.
Let’s take a look at five brands raising the bar for exceptional retail customer experiences—and what you can learn from them.
Chewy
Chewy is famous for handwritten cards, pet portraits, and proactive customer service. Though these things may not be easy to scale, they establish Chewy as a reliable, loveable brand they can trust.
One customer’s story about receiving flowers after their dog passed away went viral. It’s a masterclass in thoughtfulness, emotional connection, and respect for customers.
PacSun
PacSun uses Capacity’s retail AI platform to elevate the online shopping experience with personalized recommendations. As customers shop, they can engage with proactive product recommendations that ring true with their browsing history and interests. Plus, a combination of web chat and SMS virtual agents are always available to assist with purchases and deliveries.
TOMs
Over 60% of consumers tend to buy from brands that reflect their personal values. The shoe brand TOMs builds loyalty by making customers feel like they’re part of a movement—when customers buy a pair of shoes, TOMs donates another pair to someone in need. As a result, TOMs’ social impact mission goes beyond their products to create purpose-driven experiences that matter.
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Sephora
The wide world of makeup is as diverse as the people who wear it. Sephora uses advanced technology to deliver tailored product recommendations for their shoppers, called Color IQ. In-store and online, shoppers can find a perfect match for foundation, lip, and concealer colors. Plus, Sephora’s loyalty rewards program offers samples and birthday gifts to keep customers engaged and feeling appreciated.
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BirchBox
BirchBox recently launched their first in-person spaces in partnership with Walgreens, after starting out with an online subscription-only model. Now, customers can make their own unique BirchBoxes in store, improving their own experience while driving more foot traffic. Plus, BirchBox gets unique insights into their customer base’s favorite products!
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Ready to level-up your retail experiences?
The retail customer experience is no longer an optional part of business strategy—it’s the foundation of success. Whether online or in-store, today’s shoppers are drawn to brands that make them feel seen, supported, and valued. By investing in CX both online and in-store, retailers don’t just improve transactions. They create lasting relationships that drive revenue, loyalty, and long-term growth. Request a demo today to learn more.
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