Sentiment analysis is a powerful tool that allows brands to understand their audiences' positive or negative perceptions. While sentiment analysis can benefit companies in any sector, retail companies may find it especially important since customers often have strong emotional perceptions about retail products and stores.
Some sentiment analysis tools rely on basic tasks such as scanning a consumer's comments on social media to differentiate between positive and negative ones. More advanced tools work by mimicking human intelligence and understanding the nuances of sentiment.
Let's look at some ways sentiment analysis can help retailers bolster their brand image and cultivate customer loyalty.
Importance of Sentiment Analysis
Sentiment analysis can provide great insights regarding strategies retailers can implement to become more customer-centric and boost their business growth. Several statistics underscore the importance of assessing customer sentiment and delivering positive experiences.
- Around 54% of businesses have already adopted the technologies to analyze user sentiment from social media or their reviews. This figure is likely to exceed 80% in 2023. (Bain & Company)
- Text analytics, which is the backbone of sentiment analysis, is likely to reach a worldwide market value of $4.84 billion by 2026 at a CAGR of 17.35% between 2021 and 2026. (Mordor Intelligence)
- Offering customers suggestions based on their sentiments from previous experiences improves customer satisfaction by 90%. In contrast, random recommendation tools can only achieve 65% customer satisfaction. (IEEE)
- 50% of customers say that many businesses disappointed them during COVID-19 by not offering sufficient support and understanding of their needs and sentiments during difficult times. (Accenture)
- 76% of consumers feel frustrated when they fail to receive a bespoke experience. (McKinsey)
- 95% of consumers consider customer service critical to their choice of and loyalty to a business. (Microsoft)
- Customer-centric businesses are 60% more profitable compared to businesses that don't focus on the customer. (Deloitte)
- About 61% of consumers abandon a brand because of poor customer support. (Microsoft)
- Over 50% of customers have scrapped a planned purchase or transaction due to inadequate service, and 33% are likely to switch brands after one instance of poor service. (American Express)
4 Ways Sentiment Analysis Can Help Boost Your Retail Brand
Using sentiment analysis techniques can help retail brands achieve several advantages. With sentiment analysis techniques, you can gain a clearer insight into how customers feel about your brand so that you can take proactive steps to engage with them positively, combat churn, and elevate customer satisfaction.
1. Address customer concerns and needs
Using sentiment analysis, retail brands can identify general issues affecting their customer base. When you have a clearer picture of what your users want and their motivators and pain points, you can make well-informed decisions about how to serve them better. Applying sentiment analysis techniques on call transcripts, customer comments, complaint emails, chatbot histories, returns, refunds, and user surveys will give you valuable insights to align your processes with customer needs.
For example, one retailer used sentiment analysis to investigate a spike in security-related complaints. The company found that customers felt concerned about the brand's lax rules about password strength, with high net worth and the highest revenue-generating customers being the most vocal about the issue. Once the brand started requiring stronger passwords, concerns subsided.
2. Engage positively and effectively with customers
Businesses can apply sentiment analysis to social platforms and their communication channels to understand what customers want and communicate with them effectively. Retail brands can follow trends and investigate spikes in positive, negative, or neutral sentiment to learn what their customers really want. This can give you a clearer idea of the type of messaging you should post on social platforms.
Moreover, brands can leverage sentiment analysis techniques to gauge the impact of their existing offerings, new product releases, and marketing campaigns on consumers, quickly tweaking their approach where needed. For instance, many clothing retailers are using sentiment analysis to study comments on TikTok videos, getting deep insights into customer behavior based on their demographics, pricing, design, and fabric.
3. Address customer churn
Customer service is a critical factor in attracting and retaining consumers. Several statistics reveal that the stakes remain high for getting customer service right each time. By understanding your customers' feelings and acting accordingly, you make them feel heard, reducing their chances of leaving your brand or switching to a competitor.
Additionally, sentiment analysis can inform retailers about whether customers feel satisfied with their products. As My My Total Retail reports, many big-name retailers faced store shutdowns, with bad product assortments being a chief cause. For example, customers expressed dissatisfaction with Fitbit products, ultimately leading to financial declines and layoffs. Using sentiment analysis techniques could have prevented some of these undesirable outcomes.
4. Enhance customer satisfaction
Sentiment analysis techniques focus on the feelings and emotions behind consumers' words. For instance, you can identify the challenges people face when purchasing something on your retail website or what they dislike about your stores. Using these insights, you can prioritize changes.
A study published in the Global Journal of Management and Marketing revealed how retailers can study themes in open-ended feedback to clarify hot-button issues for customers. For example, an analysis of feedback received by retail giant Walmart identified three key themes: "store," "employee," and "card." Customers felt most concerned about the condition of stores, the quality of service received from employees, and transactions on debit and credit cards. Addressing any or all of these areas could help Walmart improve customer sentiment and satisfaction.
Leverage Sentiment Analysis to Up Your Brand Game
Customer feedback, whether it's through social media, your website, chats with customer support reps, or any other source, contains a treasure trove of valuable business information. However, it isn't sufficient to know what consumers are talking about. Understanding how they feel will give you better insight into their experience with your brand. Sentiment analysis is a great way to extract valuable insight from those experiences.
At Helpware, we help companies monitor online conversations about their companies. Leveraging sentiment analysis techniques, we offer content moderation services so you can create a positive online presence while safeguarding your brand. Our approach to content control, security, and moderation allows dynamic integration irrespective of your in-house, social, or user platform.
We drive personalized control at every step of your customer journey. Using the best technology stack, we put the right people in the loop at just the right time to transform your content control and support you in understanding customer sentiment. Get in touch to learn more.