The Uncrowd
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The Uncrowd

Choice is back and it’s going to steal your customers

Among all its other devastating effects, the pandemic has meant the temporary death of the choice economy. Shops were closed. Businesses were restricted. We couldn’t travel. We got used to living without choice. We bought that one bag of white flour that was left on the shelf, we took that inconvenient late night delivery slot, we went to the bar with the outdoor seating.

But now, as restrictions lift, choice is returning like a tornado. And the questions retailers are asking is, what happens now?

The good thing about no choice
There were some positive consequences to the collapse of choice. We used our cars less, we walked and biked more, we shopped locally. Retailers responded to the cataclysmic change in habits. Many boosted their online offering and expanded delivery or changed store layouts and product lines. My local coffee shop transformed itself into a lovely local produce shop selling fresh sourdough loaves and local eggs.

But will we retain those positive lockdown habits and continue to shop at the local butcher and baker? Should my local coffee shop keep that sourdough and eggs on its shelves? Or should they go back to lattes and flat whites?

The answer is that some lockdown habits will persist, at least for a while. We like that fresh sourdough and feel good about those local eggs, so we’ll keep going to the coffee shop for them, of course we will.

Until we don’t.

Choice will steal your customers

Because there is one certainty about the return of the choice economy. The moment that people can choose, they will choose.

When choice returns to us, we will exercise that choice, possibly like never before. When choice means we make a different decision, for whatever reason, that fragile relationship we had with the local vendor or the online retailer is damaged.

Choice will transform things without us even noticing. Oh, I was going to cycle down to buy the sourdough, but I was tired after work so I dropped into Sainsbury’s on the way home and they had sourdough! It’s pretty nice actually.

And that’s it. The link to the local produce shop is gone. Once the customer chooses away, that relationship that was nurtured when choices were limited is potentially dead. The gain that retailer made during lockdown is lost, perhaps for good.

And the phenomenal effort that has gone into transforming retail over the last year to cope with the pandemic — changing those product lines, transforming that online offering — all that effort is lost when a customer can choose to drive to the shops again, or easily book a delivery from a competitor. That customer is gone, unless you find the combination of choice variables that keeps them with you.

Pick me! Pick me!
So what do vendors do to keep customers coming to them? How do we become the first choice for customers when the choices are endless again?

Retailers must be ready for this challenge.

Some customers will come back on their own, of course. They’ll go back to their old habits. But vendors must engage them from the start, reward them for returning. Any brand that takes their old customers for granted will be bitten hard when those same customers choose away from them.

And new shoppers who choose you for the first time also need to be engaged, to keep them coming back.

Think you have customers? You’re wrong.
Because the truth is, you don’t have customers. Don’t be fooled by all your market research and profiling. No retailer has a closed, locked-in set of people who they can rely on to shop with them.

All you have is people who, in the moment, choose to interact with you. Those people can just as easily not choose you. And as soon as they do that, they’re no longer your customer. They don’t care about you, and they don’t want a relationship with you.

The customer is in charge. And the only fundamental in retail is how we make ourselves attractive enough so that they choose us.

Being first choice
To be that first choice, you must first understand WHY shoppers choose you, or choose another retailer.

It’s about your real customers and the motivations, moods, circumstances and goals that cause them to make a choice. What customer journey are they on when they decide where to shop and what to buy? What mindset are they in? This information is crucial to understanding the choice a customer ends up making.

Friction and reward variables
Understanding customer choice is also about understanding the push and pull factors that influence that choice.

These opposing forces of friction and reward are present in every vendor interaction. Reward is everything a customer gets from shopping with you — low prices, good customer service, time saved by shopping nearby or high product quality. Friction is all the things a customer has to go through to shop with you — remembering their password for the app, driving to the store, finding a product on the shelf.

In a choice economy, where choosing where to shop is trivially easy, those tiny frictions and rewards can have a big influence on what a customer does.

Post-pandemic choice
The pandemic has forced customers to interact with retailers differently. The frictions and rewards have been radically altered from the norm.

Some retailers lost customers. Others gained new customers as competitors were temporarily closed. Customers used new channels to shop, moving online to make purchases they would previously have made in-store.

But those changes aren’t permanent. Retailers who lost customers have to make sure the rewards they offer are high enough to bring previous customers back, and frictions are low enough to keep them coming. Those who gained customers can’t rest on their laurels — their friction variables need to be low enough to retain customers in the face of increased choice, and their rewards need to be higher than ever to compete with the lure of competitors and customers rush to embrace choice again.

So as the choice economy returns with a vengeance, what do you need to do to make sure that when customers choose, they pick you?

Richard Hammond, Uncrowd CEO

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Thought-leaders in next-generation customer analytics. https://uncrowd.uk

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Coral Tee

Coral Tee

Marketing and Operations Executive at Uncrowd

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