Our Thinking

Like all businesses, retailers need to pay close attention to measuring the ROI of their spending decisions. But since the relationship shoppers have with brands is hopefully long-term, it is becoming increasingly important for retailers to look beyond a simple ROI ratio and to focus on ROX – Return On customer eXperience.

So, what is it exactly?

“Customer experience is defined as your customers’ perceptions – both conscious and subconscious – of their relationship with your brand resulting from all their interactions with your brand during the customer life cycle.”1

As the overarching definition implies, customer experience involves many things: the quality and integrity of the brand’s offering; the customer journey; brand touchpoints the customer interacts with; the physical store environment; customer involvement with the brand (directly within the store, or indirectly via marketing and, increasingly, social media); loyalty programs; etc.

Most businesses agree that customer experience is vitally important, but not all retailers are excelling at providing the experience today’s shoppers really want. Although 80% of businesses state that they offer a “great customer experience,” customer surveys indicate just 8% of companies are rated as truly delivering superior experience.


Focus on Shared Values

So, what are the 8% doing? Key is understanding their target customers’ values, and tailoring the experience to convey – at every brand touchpoint – that they understand and share those values, and are committed to helping customers make choices in sync with those values. Rather than simply focus on improving product or service offering, they take a broad view of the customer experience and strategically integrate the various components into a brand ecosystem.

These retailers understand that though the investment might not yield an immediate quantifiable return, the projected long-term customer relationship will provide countless opportunities for interaction – and transactions – to occur, thereby boosting the bottom line.

For example, rather than focus on a traditional product offering (e.g.: ‘we sell food’), a successful ROX strategy commits to set of fundamental values they know their target audience shares (e.g.: ‘we sell healthy food that is affordable’).

How do retailers detect shared ‘fundamental values’ and translate these into the brand experience? By endeavouring to understand their customers, and developing the tools to do so. A key tool at their disposal nowadays is, of course: data.


Using Customer Data

In today’s digital age, shoppers are increasingly comfortable with technological innovations ranging from phone-based apps to e-receipts and scannable QR codes. And thanks to technology, retailers are able to gather lots of information about their customers and how they shop – what they buy and when, how much they spend, how purchase patterns combine, seasonal variations, etc. Loyalty programs provide retailers with individual shopper profiles (sex, age, etc.), which can be linked to the shopper’s historical transactional data, further enriching the customer profile. Specific customer data sets can then be used, algorithmically, to identify customer preferences typical of their target market and, more narrowly, to zero in on the particular wants and needs of individual customers.


Creating Magic Moments

These data-rich customer profiles enable retailers to customize their offering, thus creating ‘magic moments’ that delight and inspire.

At the macro level, data that has detected shoppers’ commitment to seasonal produce can translate into in-store events like a pop-up meet-and-greet with local farmers or a small-scale, peak season asparagus festival.

At the micro level, an individual shopper’s patterns can be used to further personalize the experience, for example via electronic ‘coupons’ on items they often buy, or giving them a head’s up when these items will be on sale.

Customers appreciate – and expect – offers that are specifically aimed at them. It means the store is using their data to benefit them, by paying attention to their values and preferences, and helping fulfil their desires and needs, making life a bit easier.

Cumulatively, these magic moments help build brand stickiness. Personalized service piques a customer’s interest, forges a connection, and builds customer loyalty over time.


Getting Back to Shared Values

Tailoring a data-driven customer experience is easier to achieve for retailers with a specialized offering. Great examples are stores like Lululemon and The Running Room, whose offerings run the gamut from clothing and gear to info sessions, group classes or training. Their physical stores exude values their customers share – community living, wellness and self-improvement.

But what about retailers with a wide range of offerings, like grocery stores?


Organic Garage: The Complete Package

One grocery retailer that has the customer experience down pat is Organic Garage, with four locations in Ontario. Their tagline is, simply, “Healthier food for less” and man, do they deliver. It’s like a cross between a health food store and traditional neighbourhood retailer. Everything about the store is cohesive and highlights what the brand stands for. The interiors invite shoppers to relax, browse and learn, prices are reasonable, the store’s vibe is distinctly young and urban and the overall messaging comically alludes to our daily urban “struggles” (another message proudly displayed in a funky font is “Join the grocery revolution.”) Their target market is the city crowd who want to eat tasty, nutritious foods that are ethically produced but won’t break the bank.

As consumers increasingly demand that retailers deliver on values related to nutrition, traceability and access, successful stores will be the ones that take the time and use available data to really get to know their customers and devise strategies to design a customer experience that is personal, holistic, and integrated.


In sum, as stores evolve from being solely transactional to also being experiential, it is understanding ROX that will deliver greater ROI. The magic is the marriage between the two.