The evolutionary trends around the retail industry on how customers interact with brand, product and services, organizations have realized the need to understand customer experience behaviour and to adapt their strategies using varied approaches through retail channels. However, the purpose of this report is to conduct a literature review within the concept of retail customer experience by examining the recent academic publications on the concept. The concept is fraught with definitional divergences, Robinette and others (2001) assert that emotions, information, sensory stimuli are exchanged between a company and its customers at points which are being collected and referred to as customer experience. Berry and others (2002) refer to customer experience based on three components; they are functional i.e. the technicality in the quality of the offering, mechanical i.e. the sensory presentation of offering and humanic i.e. the behaviour and appearance of offering. The literature review for the report will focus on product and brand. Following this, Tesco will be used as a case study to demonstrate how the organization make use of various retail channels. Finally, from the literature and case analysis of the retailer, recommendation will be made to the retailer’s management team.
Context and background
The retail industry has continued to witness tremendous changes with the advent of technology leading to how costumers engage with brands, browse and interact with product and services. Nowadays customers sought for the experience provided by goods and services which haqve inclinations to fun, fantasies and feelings (Frow and Payne, 2007; Hirschman and Holbrook, 1982). Experiences are found in the minds of people who have felt various levels of it physically, emotionally, and intellectually or could also be spiritually; they are noted as being memorable and personally inherent (PineII and Gilmore 1998; Gilmore and Pine II 1997). Internal and subjective response as a result of direct or indirect contact with the company can be described as customer experience (Meyer and Schwanger, 2007); buying and using of product and services is a direct contact whereas advertisement and reports are both indirect contacts. However, customer experience entails customer’s assessment (i.e. cognitive and affective) of all direct and indirect dealings with the company apropos their purchasing behaviour (Klaus and Maklan, 2013). Considering the importance of retail customers experience and the competitive nature of the retail industry companies are compelled to adapt their strategies in order to manage the dynamic surrounding the retail channels. Several literature posits that interaction with product results to experience (Malhalke, 2008; Desmet and Hekkert, 2007; Hamilton and Thompson 2007), so does an interaction with brand (Zarantonello and Schmitt, 2010; Valenico, 2005; Barkus et al., 2009, Keller, 2003). However, previous researchers have not defined them as the essential element of customer experience.
Product: The process of customer experience creates a link between the customer and the product, and thus adds value to the product (Chen and Lin, 2015). Zaichkowsky (1985) opines that inherent needs, values and interest are the basic drivers of customer’s purchases of a product which are for personal relevance. Thus, when consumers partake in the purchase of a product it means it means they know what they are looking for in the product. On this, Dhar and Wertenbroch, (2000); Batra and Ahtola, (1990); Park et al., (1986); Voss et al., (2003); Assael (2006) and Mittal, (1990) explain that while experiencing the product consumer does not only look into the utilitarian values but also hedonic values that a product can bring for her/him. Where ‘utilitarian’ refers to the daily performance of the product to the consumer and ‘hedonic’ refers to the pleasurable effect of the product, or the empirical aspect of the product or the cues that gives sensory pleasure, variety, and/or cognitive stimulation. Moreover, it should be noted that experience encountered by consumers with product, either utilitarian or hedonic, serves as an input to the product-elicited affective experience (Mano and Oliver, 1993). This has thus led marketers to increase their concern towards understanding post purchase process and its nature of affect, while the term ‘affect’ is considered to be an umbrella for a series of more particular mental processes such as emotions, moods and attitudes which further exposes a consumer’s notion towards the use of a product (Bagozzi et al., 1999).
Brand: going by Zarantonello and Schmitt (2010) it was noted that consumers search for brands that gives them experiences which are unique and memorable. This is also associated with not just handling externally generated needs but places them in a group or role and could further meet up with internally generated needs (Sreedhar and Singh 2006). Consequently this means that the brand partners the consumer, creates an identity within the consumer that can be trusted and forms some sort of emotional bond which is been built and subsequently creates branded communities (Schmitt and Rogers 2008). Barkus and others (2009) also in line with Fournier’s (1998) assertions conceptualized brand experience to include sensations, feelings, cognitions and attitudinal responses piloted by brand related stimuli which form part of the identity and design of a brand, its packaging, communication and surroundings that enable to create quality relationship and emotional attachment between the consumer and the brand (such emotional attachment is seen as love or passion, self-connection, interdependence, intimacy and commitment to the brand). More so, brand experience effects long-term and short-term consequences, this can be noted in a customer’s empirical value that ranges from aesthetics, playfulness, excellence of service, and the customer’s return on investment (Keng, Tran, and Le Thi, 2013). Percy and Hansen (2000) opine that the experiences the consumer has with the brand, either in terms of actual usage or a mare understanding of it, gives rise to emotional association in memory. Thus, the more a consumer “experiences” the brand when seeing and or hearing it, the more the brand is registered in the memory of the consumer which leads to emotional attachments. This adds up to the essence of a marketer in building a rigid brand that possesses the suitable kind of experiences to the customer with its products and services coupled with the activities of marketing that enables the imbibition of desirable thoughts, feelings, beliefs, perceptions, images and opinions with the brand that result in the maximization of the consumers satisfaction (Keller, 2003 ad Anderson and Sullivan 1993).
Case study- An analysis of Tesco
UK retail is on the speed lane especially in this era of technology and the competitive nature on how customer engaged with brand and products. Tesco has been select to demonstrate how the organization manage in-store customer experience. Tesco is one of the leading supermarket brand in the UK and currently ranked as the best in-store grocery supermarket and Tesco operates about 3961 stores across the UK (tesco.com, 2020). In the 1970s and 1980s, there w3as this quest among customers to search for products of quality and choice, the known Tesco “pile it high and sell it cheap” framework was setup and this indeed was not really successful as their outcomes plunged terribly. The essential cause of such woeful performance was as a result of a somewhat grotesque image of Tesco and its products painted in the minds of customers; considering the cheap prices, its stores were inadequately managed and its items were of terribly ridiculous and poor (Albrecht Enders and Tawfik Jelassi, 2009).
Furthermore, so as to ascertain uniqueness in customer experience through a plethora of channels, new systems and technology as regarding sales and distribution; this placed Tesco across a range of stores and various market segments (Lord MacLaurin, 1996). Subsequently, just to meet up with the increasing competition and food price reduction Tesco diversified its range of products (Albrecht Enders and Tawfik Jelassi, 2009).
Taking into cognizance the unique experience of customers Tesco strategically began having cyber-cafes in stores around the country to educate those computer illiterate customers in a bid to bring them online; as at 2001, the Tesco.com website could offer several categories of products (Albrecht Enders and Tawfik Jelassi, 2009).
This master plan above stated elevated their sales from £36.9 billion in 2005 to £43.1 billion in 2006, with group profit before the increment of tax from £1.9 billion to £2.2 billion; currently, Tesco employs over 273,000 full-time employees across the globe. No doubt it is the leading firm in the U.K. food retailing, having an outstanding market share of over 30%. (Tesco.com, 2020).
Going by the press release on the first five retailers with the best in-store Customer experience, this company was dominated by grocers, with a recorded mean in-store satisfaction score of 15% and mean in-store satisfaction record for department stores had declined to 7% on average and dropped even further for in-store fashion, coming up with a mean of 3%; These records support evolution of supermarkets to adapt to the changing consumer behaviour both technologically and store formative wise (Albrecht Enders and Tawfik Jelassi, 2009).
RetailEXPO.com delineates in their report that Tesco dominated the poll for delivering in-store consumer experience (23%), following behind was Sainsbury’s (18%) and Asda (17%); this statistics explains how Tesco has prioritised customer in-store experience. This is also informative of Tesco’s commendable company performance in its leading maintenance as the best in-store customer experience with immensely high gross profits, increased sales beyond records of previously recent years, and further delineates a futuristic growth and profitability potential of the company (Albrecht Enders and Tawfik Jelassi, 2009).
Furthermore, the in-store picking model introduction by Tesco has enhanced customer satisfaction by naturally extending the bricks-and-mortar experience of its customers, picking about 250,000 weekly orders from 300 UK stores to improve an undisturbed customer shopping experience; picking has also been modified considering appropriate picking hours which begins at 6:00 a.m. and culminates at 2:00 p.m. also cognizant of the necessity in reducing the numbers of picking staff so that there is a consequent de-synchronization of daily peaks from in-store picking and continuous shopping, and averting clogging of aisles (Tesco.com 2020).
According to Matt Bradley (2019), who in his work posit that retailers are in expectation of a redefined environment provided by the in-store, such is to boost their experiences not leaving out the product so that shoppers are engaged in a mix of retail and leisure. Statistics reveal that 73% of shoppers would invest more time and money in in-stores that can provide a mix of products and experiences, and more emphatically 70% of shoppers express their lack of interest to shop and would sought for other in-stores if this shops fail to offer exciting experiences alongside their products; this exposes the significance of designing and offering an ultimate in-store customer experience (Albrecht Enders and Tawfik Jelassi, 2009).
Tesco possess strong in-store customer experience management, this is evident in their sales output and seems to take advantage of all their touch points with customers. Following this, the recommendation to the management team is that they should concentrate more on brand loyalty and customer retention as this will improve their sales significantly thereby maintaining their position as the number one best retailer in the UK. Additionally, in order to increase in-store customer traffic, I will recommend that surprise loyalty gift cards are given to “repeat customer purchase” in a particular product and services. Lastly, I will recommend that the management team in the process of designing customer experience strategies they should perform a frequent review of how individual customer interact with product and services.
To maintain a higher customer experience, retailers need to change their approach from organization and brand strategy and redefined their focus by concentrating more on individual customer unique experience so as to build memorable experience. Since customer experience is a two way approach between the customer and experience created in a particular organization, I will suggest that in the process of designing a customer experience strategy organizations should take into consideration the role of the customer.
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