Why customer acquisition and loyalty are retailers’ biggest challenges today

In an Australian retail environment defined by heightened competition and consumers tightening their wallets, acquiring new customers – and keeping them – is proving a critical challenge for many retailers. 

In the latest edition of her Retail Untangled podcast series, Inside Retail’s Amie Larter talked to Toby Cumpstay, senior merchant success manager at Shopify, about how retailers can navigate such a challenging course – and where there are opportunities to outperform rivals. 

Cumpstay sees securing new customers – and keeping them – as the great challenges retailers face right now. Brands across the board are telling him that the cost of customer acquisition is rising and that makes it more essential now than ever to ensure technology systems are integrated and that retailers have a unified commerce perspective.  

“Consumers are being more selective now more than ever about where they’re spending that next dollar and especially where they want to spend their disposable income. So it is crucial in this space for retailers to focus not just on the acquisition space, but more so than ever, how they retain their customers and create customer experiences that drive loyalty.

A recent Shopify report found that 92 per cent of consumers have bought from different brands than they normally do over the past year – primarily driven by cost – with 57 per cent of customers now often switching brands for a better price, discount or promotion. 

“Loyalty is hard to earn but easy to lose,” he says.

To respond, Cumpstay says retailers should focus on how they can be more competitive, by offering a wider range of products, enhancing the customer experience and showing up in channels and spaces where consumers want your brand to be, rather than where they may have traditionally been.

Strategising the channel mix to acquire new customers is important to brands and a key to success. 

“We know that customers can come from any channel so it’s essential to optimise the experience across every channel where your business is showing up. For instance, if you’re using TikTok, how you show up on that platform and acquire customers on that platform is going to be dictated by that platform. So we know that social media, it’s all about face-to-camera, personal experiences, social selling, and influencers. 

“On the other hand, traditional media, where we are seeing a resurgence at the moment, is all about bringing the brand’s values and unique selling points to that platform. So, your channel strategy as a brand is critical at the moment.”

Cumpstay cites luggage retailer July for excellence in acquisition strategy. To draw foot traffic to the opening day of its Brisbane store, July promoted a competition via social media and local advertising. In return for joining the brand’s mailing list, visitors could ‘guess the combination’ on luggage to win it. 

“July was able to use its point of sale to log all of those new acquisitions into its single system. It was a great way to bring the community together, and create a social and shareable moment for the brand as well.”

Another example is the ethical toilet paper brand Who Gives a Crap, a global seller looking to drive brand awareness and acquisitions in the UK. At a one-day pop-up shop in London, shoppers were sent a box of toilet paper for free in exchange for providing their email address and a physical address for delivery. 

“It offered a unique experience not only to talk about the product but some of the incredible work it is doing with charitable organisations and increasing sanitation and hygiene across the globe.” 

The opportunity of internationalisation

Cumpstay says internationalisation presents a tremendous opportunity for growth, but many retailers are hesitant due to a variety of concerns, including logistical challenges, currency issues, and navigating the complexities of taxes and duties, which all come with it.

“It can all feel a little bit daunting. There are a lot of unknowns.”

Who Gives a Crap addressed this by creating multiple storefronts and automatically displaying its products in the customer’s native currency and language. The retailer loves the ability to manage multiple storefronts, languages, and currencies, all from one backend, which then allows them to see the entirety of their business all in one place. 

“But most importantly, it creates a seamless customer experience as well. So wherever I’m shopping across the globe, I can shop with Who Gives a Crap in my local currency, language and even subscribe to its products as well.” 

Why unified commerce is essential

Pursuing a unified commerce strategy is essential in any market, he explains. That means having unified customer profiles – understanding your customers wherever they are, wherever they shop, across one platform, and centralising inventory so you can see what’s available across all platforms and all locations, whether in stores, warehouses or in between. And then centralised data – knowing that all of this customer data and these transactions, can be accessed in a centralised place and then reported on for better decision making. 

But customers are the main winners from a successful unified commerce approach – they can shop wherever they want, whenever they want and they know their order history is there, they know every gift card they’ve purchased is going to work and they know that the promotions are seamlessly integrated across the platforms as well.

On the flip side, with brands investing in delivering great experiences through unified commerce consumers are more aware of bad customer experiences, warns Cumpstay. 

“The bad stands out where you can’t return an item that you’ve purchased online at a store, for example.  Or you may have purchased a gift card in a store and you can’t use that online. Those experiences add friction.

He says retailers need to create an environment that is an enjoyable experience to shop and to engage with customers. 

  • Listen to the Amie Larter talk with Shopify’s Toby Cumpstay on Episode 11 of the Retail Untanged podcast series here on Inside Retail. 

Have you caught up on Episode 10 yet? Why it’s crucial retailers deliver the same experience in-store as online.


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