How do you measure Customer Experience in Retail

27 Dec 2023

7 min read

Ever wandered into a shop, felt the warm welcome of helpful staff, found exactly what you were after and left with a smile on your face? That's retail customer experience in its finest form. But why is it so important?

You see, it's more than just making sure customers are happy when they walk out of your door - although that’s certainly important! It's about building relationships, earning trust and ultimately creating loyal fans who not only come back time and again but also spread the word to their friends.

This isn't just some nice-to-have ideal either. Good customer experiences can lead to higher revenue, better retention rates and even growth through word-of-mouth referrals.

But how can you measure the impact that a good customer experience has on your bottom line? Let's take a look.

Understanding Retail Customer Experience

Retail customer experience is more than just selling products or services. It's about the journey your customers take with you, from their first interaction to the last.

Think of it as a theatre play: each act contributes to an overall narrative that makes or breaks the audience's (customer’s) impression. And in retail, every touchpoint plays a crucial part in shaping this perception - be it browsing through items online, receiving personalised recommendations, engaging with store staff or even after-sales help.

Forbes' insight on Customer Experience vs Customer Service helps shed light on why both are essential but not identical components of a memorable retail experience.

Key Elements of a Positive Retail Customer Experience

A top-notch retail customer experience is like a well-orchestrated symphony. It's the harmony between product quality, efficient service, and after-sales support that plays sweet music to customers' ears.

The first note in this composition is product quality. No matter the grandeur of your shop or how polite your employees, if what you offer is not satisfactory, it will leave customers displeased. Products should not only meet but exceed expectations - think of it as hitting those high notes that make an opera memorable.

The next essential element is efficient service. This involves everything from smooth checkouts to swift resolution of any issues. Customers want their journey through your store (physical or digital) to be effortless, for packages to arrive on time, and be simple to open and operate.

Last but certainly not least comes after-sales support. Once they've made their purchase, customers need assurance that you'll continue helping them if needed. This can involve handling returns smoothly or answering queries promptly – picture it as having someone there ready with warm blankets just off the slopes when skiing. A study by Harvard Business Review showed that 93% more positive customer experiences occur when companies provide effective follow-up (HBR Study).

  • Fine-tune Product Quality: Deliver beyond expectation.

  • Hone Efficient Service: Make sure the customer journey flows seamlessly.

  • Cultivate After-Sales Support: Be there for your customers even after they've made their purchase.

By paying attention to these three elements, you'll not only create a retail customer experience that's music to your customers' ears but also one that has them returning for more performances. Remember, the goal isn't just making sales - it's creating advocates who will sing your praises far and wide.

What is the goal of a good customer experience?

A top-notch customer experience (CX) shouldn't be seen as just an endgame. Rather, it should serve as the springboard for more tangible business outcomes.

The first goal of great CX? It's all about loyalty. A Bain & Company study shows that customers who rate companies high on CX are likely to make repeat purchases and stay loyal to brands they trust.

CX fuels Revenue Growth

You might ask if quality CX can actually lead to revenue growth? The answer is, absolutely. Good experiences drive repeat business and higher spending. Customers who have positive interactions with businesses are not only more likely to come back but also spend more during each visit or transaction.

Retail Customer Retention Rates

Another key objective of delivering stellar customer service revolves around retention rates. It's all about ensuring your patrons come back time and again due to their fondness for you and the services you provide.

  • Loyal Customers: By increasing retention rate, you can increase your customer lifetime value, which is crucial to ensuring that it is higher than customer acquisition cost.

  • Satisfied Shoppers: Happy shoppers stick around longer, increasing lifetime value per customer – boosting your bottom line over time.

Growth through Word-of-Mouth Referrals

We've all been there - raving about a brand we love or sharing tales from our favourite shop with friends and family. This word-of-mouth effect is another prime outcome fuelled by excellent CX; these personal recommendations can often lead to new customers and further growth for your business.

Creating Customer Advocates

Last, but certainly not least, an exceptional CX can transform your happy customers into advocates. They'll sing your praises far and wide, helping spread the word about what makes you great - whether that's top-quality products or simply superb service.

Each one of these goals is deeply intertwined with the others, forming a cohesive unit.

What are you looking to measure?

In the retail sector, gauging customer experience is more than just a 'nice-to-have'; it's critical. But what should we focus on measuring? Let's delve into that.


Your company's net income gives you a prompt understanding of how your business is doing. A rise in revenue often means customers appreciate your products and services. It’s not just about getting new customers though; returning patrons also play a significant role in boosting revenue.

You may need to look at other factors in order to tease out the exact reasons why revenue has increased, but if you can break it down by new revenue vs. returning revenue, and check it against any major campaigns.

Customer Satisfaction

This factor goes hand-in-hand with revenue growth but digs deeper into why consumers keep coming back (or not). Are they happy with their purchases? Is your after-sales service commendable? Surveys like Net Promoter Score (NPS), Customer Effort Score (CES), and Customer Satisfaction (CSAT) can give us these insights.

Customer Retention

The cost of acquiring a new customer typically outweighs retaining an existing one, making this metric vital for profitability. High retention rates reflect positive experiences and loyalty – crucial elements of successful retail businesses.

Word-of-mouth Growth

A satisfied patron isn't just likely to come back; they'll probably tell others too. Word-of-mouth referrals drive high-value traffic because people tend to trust recommendations from friends or family more than ads.

This organic growth might be challenging to track, but tools like referral programs or tracking codes could help gauge its impact better, or you can simply ask customers how they heard about you.

Note: Always remember that metrics aren’t standalone indicators - look at them collectively for a more comprehensive view of your customer experience.


How can AI improve customer experience

A question often asked is how artificial intelligence (AI) can elevate the retail customer experience. It's like having a dependable aide who is always available and never tires out.

The beauty of AI lies in its ability to answer questions promptly and fix issues immediately. Think about when you've been stuck on hold trying to get help from a company. It's frustrating, right? Now imagine getting instant responses at any time - that’s what AI offers.

IBM reports that businesses using chatbots have seen up to 80% improvement in response times. This isn’t just great for customers; it helps businesses too by freeing up their human agents to handle more complex tasks.

Faster Problem Solving with Artificial Intelligence

AI can spot patterns far faster than humans can. For example, if a product develops a fault that causes customers to reach out, an AI customer service bot can help find the root cause. Perhaps it's a particular material that's failing, or a certain factory that is having quality control issues.

By spotting these patters, AI can alert your operations team to fix the issue at root cause, and prevent anything else going wrong, and damaging the customer experience for future customers.


So, we've uncovered the importance of retail customer experience. It's not merely about pleasing customers - it's also building trust and inspiring commitment.

Remember, this doesn't just make your shop a nicer place to be; it boosts revenue, improves retention rates and drives growth through word-of-mouth referrals.

We've looked at key elements that shape these experiences too. From product quality to after-sales service, every touchpoint matters.

And don't forget the role of AI! Whether answering questions swiftly or resolving issues instantly, AI can take your service level up a notch.

To sum up: keep an eye on those metrics and always strive for improvement. Because when you get the retail customer experience right... Well, that’s where real magic happens!