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How are customer expectations driving changes for retail?
There is extreme competition in the retail industry today and thousands of stores are closing in what is being described as the retail apocalypse. You cannot focus merely on survival, you have to have innovation and disruption as top priorities on your roadmap. Focusing on survival or a single core competency has been the downfall of numerous erstwhile behemoths such as Blackberry and Blockbuster Video. Nobody can be content with the status quo, no matter how strong your sales numbers are.
Consumers demand a simple and seamless purchasing experience across channels. They do not think in channels, only retailers do! Unified commerce is more than just having a single view of inventory, it is as much about consistency in customer experience and communication. The digitalization of the economy is all about how to reduce friction points in consumer interactions and becoming easy to do business with. Anytime, anywhere, any device. Device does not only refer to a hand held device such as smart phone or tablet. The internet of things (IoT) is here to stay with Gartner predicting over fifty billion IoT devices by 2020.
Innovations in customer engagement and experience will allow retailers to stay relevant and grow their presence. This hinges on a strong 360 view of the customer but requires a strong digital core that can drive personalized interactions both in store and across digital touchpoints.
Big data is another buzz word that is rarely leveraged to its ultimate potential. Today we have more data than we have ever had: decades of internal data, market research on competitors and social media. The data alone will not fuel growth but better real-time decision making and business insights will. This represents a unique opportunity to embrace this digital revolution and drive more personalization. Digital leaders need to constantly look at how the latest technologies on the market can disrupt the customer engagement paradigm and drive their brands to new growth. Remaining grounded and driving alignment and prioritization in the boardroom is essential if you want your brand to avoid being the next casualty in the retail apocalypse.
The fundamental objective is to give customers a consistently high level of service regardless of where or how they interact with a brand. We can do this by making it easier and more convenient to shop, enriching the quality of buyer interactions, and by anticipating the needs and expectations of our customers. If one of our customers from London visits a New York store, sales associates should be able to recognize that individual and pinpoint his or her buying preferences and purchase history within a matter of a few seconds. Likewise, when a shopper dials customer service, every touchpoint we have with the customer should be reflected and aggregated. In this way, a good 360 customer view can help brands personalize their service in real time.
"Innovations in customer engagement and experience will allow retailers to stay relevant and grow their presence"
Many retailers focus on merely marrying in store transactions with ecommerce transactions but the 360 view of the customer transcends that. The customer master database of the future should have every single touchpoint that the customer has had with the retailer regardless of whether or not it culminated in a sales transaction. This includes a full understanding of communication preferences, style and size preferences, as well as the relationship between sales, promotions and returns. This should be augmented with external data including demographic information as well as social media sentiments. Ultimately, we need to know our customers not as data points but as people. Furthermore, look at the metrics and data behind every customer touchpoint can expose bottlenecks in the customer experience.
Online influencers and friends in the shopper’s personal network are now the most trusted sources of information that drive purchases. Conventional advertising channels are being displaced by these individuals and word of mouth advertising. Retailers need to focus on telling their story through content and embrace video which is a rapidly growing channel. McKinsey reports that “marketing-induced” consumer-to-consumer word of mouth generates more than twice the sales of paid advertising. Those sales have a 37 percent higher retention rate. In addition, user generated social posts account for 25 percent of search results for the world’s top 20 brands, improving search engine rankings and driving greater awareness.
Based on these statistics there is little doubt that satisfied customers are the lynchpin of brand advocacy. So why then are brands only focusing attention on the sales funnel? Customer service after the purchase is just as important if not more critical. Retailers should think about customer lifetime value and provide the same white glove service in handling customer issues and complaints. Embrace the contact center and online service channels to provide an engaging and personable experience for the customer. This will drive higher retention and further work of mouth advertising. Too many brands have lost any sense of empathy and fail to recognize that customer service can be a powerful form of marketing to strengthen relationships with customers. Finally, every single engagement a brand has with a customer or prospect should not just be about pushing product. Customers are seeking authenticity. It is important to connect with them on a personal level and not lose sight of your unique value proposition and the spirit of why they are engaging with your brand in the first place.