Majority of Consumers Abandon Brands Following Three Negative Interactions
In today's dynamic retail landscape, customer expectations play a pivotal role in brand retention, particularly through customer service experiences. According to a series of reports by Coveo and Forrester, brands that focus on service and support throughout the customer journey can breathe life into their subscription models and drive consumer growth.
Quality Customer Experience (CX) is Crucial
A whopping 80% of customers consider the experience a company provides as important as its products or services, and 88% say good customer service increases their likelihood to repurchase[1]. Brands that deliver consistent, personalized, and emotionally engaging service foster deeper trust and long-term loyalty[1][4].
Personalization Drives Retention
71% of modern buyers expect personalized experiences and feel frustration without them[4]. Personalized communications encourage higher spending and repeat purchases; brands that make customers feel appreciated gain recommendations from 87% of consumers and repeat purchases from 76%[1].
Unified Data and Seamless Service Matter
Customers expect all company representatives to share consistent information about them (70%) and want seamless online and offline service options (74%)[1][4]. Siloed systems and poor data integration reduce CX quality, negatively impacting retention[4].
Variation by Age Demographics
The needs and expectations of consumers can vary based on their age. Gen Z consumers, being digital-native, expect high personalization and integrated digital experiences. However, only 14% of loyalty program members currently are Gen Z, and 82% of firms have no or only ad hoc generational strategies targeting them, risking future loyalty and market share[5].
On the other hand, Baby Boomers tend to appreciate reliability and consistency in service and may value human-contact more. They might be less comfortable with fully digital or AI-driven experiences but still expect personalized, quick, and accurate service[1][4].
Concerns Regarding AI and Data Collection in Personalizing Shopping Experiences
While customers expect companies to use collected data to improve experiences, concerns exist around data privacy, trust, and AI adoption. Despite the potential of AI to boost customer retention by 63%, only 6% of firms currently use AI for service recovery[5].
However, improper AI implementations or automated interactions without transparency can erode trust. Gen Z and other younger shoppers may be more privacy-conscious and skeptical of data collection, requiring transparent, ethical AI use to avoid alienation[5].
Many companies suffer from siloed data systems and outdated processes that hinder the effective use of AI and customer data to tailor experiences, meaning customers encounter generic or inconsistent service despite technology investments[4][5].
In summary, brands that meet or exceed customer expectations for personalized, seamless, and empathetic service—leveraging AI and data wisely—improve retention across demographics. However, they must carefully address data privacy concerns and adopt generational strategies, especially targeting digitally native Gen Z consumers. Baby Boomers may prioritize consistent and reliable service experiences more than hyper-personalization but still benefit from improved service quality[1][4][5].
[1] Coveo Report [4] Forrester Survey [5] Generali Global Assistance Study
- In the retail industry, the adoption of AI can boost customer retention by 63%, but concerns about data privacy, trust, and AI adoption persist, especially among younger generations.
- Brands focusing on service and support throughout the customer journey, and delivering personalized, emotionally engaging, and seamless service, can foster deeper trust and long-term loyalty among consumers.
- Age demographics vary in their needs and expectations; Gen Z consumers, being digital-native, expect high personalization and integrated digital experiences, while Baby Boomers might value human-contact more and prioritize consistency and reliability.
- Among customers, the experience a company provides is as important as its products or services, and 80% consider the experience a crucial factor in brand retention. Brands that make customers feel appreciated gain recommendations from 87% of consumers and repeat purchases from 76%.
