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Research: Why the customer experience remains key

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As part of our research programme, InternetRetailing recently looked at issues around customer experience. Jonathan Wright reveals the results.

While the idea of providing a great customer experience should always be crucial to retailers, we had one specific extra reason to conduct research in this area over the late summer. It’s tied up with a piece of jargon that’s become ubiquitous among retail professionals in recent years – omnichannel. It’s a word that means subtly different things to different people, but at InternetRetailing we’ve taken omnichannel as referring to retail where the friction between channels has been entirely removed and where the retailer offers a consistent experience.

Customer experience is not just important, but growing in importance


There are two problems with this idea. Firstly, we don’t think anyone has actually got there yet, even forward-looking retailers that have made big investments such as M&S [irdx RMAS] or John Lewis . Secondly, it’s a piece of jargon that’s become associated with systems, logistics and technology.



In this context, while a smooth-running click-and-collect operation, or even just a website that loads efficiently, are examples of great customer experiences, we’ve lately detected a small but significant shift within the industry, a worry that maybe this focus on omnichannel has left many retailers not paying sufficient attention to consumers. With the idea of customer experience-centred retail gaining ground in reaction, it seemed an especially apposite moment to take a snapshot of retail professionals’ views on customer experience.

To do this, we conducted an online survey, and also spoke at length to retailers and our partners in the research, Sitecore, SLI Systems [irdx VSLI] and Solocal .

STATE OF THE INDUSTRY

Firstly, we wanted to gauge what respondents thought about their company’s performance here. The answers, it’s safe to say, suggest confidence. More than 83% of respondents said their companies are very good or good at providing a great customer experience. Conversely, less than 3% of respondents said their companies are poor here. This is heartening, although we would caution that if you work in retail and you’re good at what you do, then you’re probably not going to hang around at a company that isn’t providing great customer experiences – plus of course companies that don’t serve their customers well may not be the kind of retailers that stay in business.

So, where do these same respondents see their companies as strongest within customer experience? Around 29% opted for website experience, while 24% went for in-store. At the other end of the scale, 4% opted for the mobile experience, and 3% for linking different channels. We were expecting the figures for mobile and cross-channel experiences to be low, but we were surprised by how low they were. On reflection, perhaps we sometimes underestimate just how hard the transition to a mobile, cross-channel – omnichannel if you must – world is for retailers. Factors such as creaky legacy systems, the amount of strategic planning needed and resources all play in here.

This doesn’t mean people aren’t doing work in this area, or at least thinking about it. So where do respondents think their companies an make the biggest improvements when it comes to customer experience? One of the answers initially rather foxed us: 19% of respondents said their companies could make the biggest improvements in the website experience, which doesn’t appear to tally with respondents’ confidence that they’re providing great customer experiences and that the website is a strength. Conversely, 23% said the mobile experience was where their companies could make the biggest improvements, which is what we’d expect.

The website figure may represent a recognition of a need to build what David Kohn, Multichannel Director of the outdoor sports clothing and equipment retailer Snow+Rock Group , calls a “strong core website”. In other words, you can think your website is good, but still want to improve it – perhaps even build out from it if you’re working for a company that’s serious about bringing digital into the store.

So, what practical steps are retailers taking to improve the customer experience? As you’d expect, more than 80% of retailers use email marketing. Other techniques being employed include getting customers to log into their accounts (60%), through the use of loyalty programmes (38%) and searchendising techniques, surprisingly low at 24%.

PERSONALISATION AND CROSS-CHANNEL

It’s been clear for some time that personalisation is a key part of customer experience, and 7% of respondents said it will be important in winning and retaining customers in the years ahead. With this in mind, we also asked whether retailers are working towards gaining a single view of the customer. Around three-quarters of respondents said their companies are doing work here. In addition, more than 20% said their companies are planning to do work here.

However, there’s a problem around tracking customers across different channels, with 41% of respondents saying this was the biggest barrier to ‘talking’ to customers individually within cross-channel retail.

We also asked about the role of the store and social media. When we asked about the techniques retailers are using to get customers to stores, keep it simple appeared to be one message, in that having an online store/branch locator was rated as very effective by 43% of respondents. Similarly, promotions and coupons, click and collect, and making in-store inventory available were all cited as very effective techniques by more than 35% of respondents.

Finally, on social media, more than 80% of respondents said their companies are exploring how to use social media within customer experience initiatives, but nevertheless it still looks like early days here as yet. We would expect the use of social media within customer experience initiatives – going far beyond monitoring Twitter and having a Facebook page – to get much more sophisticated in the months and years ahead.

If we had to make just one overarching point as a result of our research into customer experience it would be this: there is a clear understanding within the industry that customer experience is not just important, but growing in importance. More than this, it’s often a key point of difference between retailers. Customers, after all, don’t just shop on price.

So, how should retailers approach such a business landscape? One approach is to think what your brand represents and tackle customer experience from that perspective. At Snow+Rock, David Kohn talks about conveying expertise and passion to differentiate its brands from competitors. Snow+Rock is a place to go when you need expert advice. The company is working on introducing live chat, with the idea that people will find the same expertise online as on the high street.

But this kind of work isn’t easy. It requires resources, creativity and technical know-how to create the kind of personalised and seamless cross-channel experiences to which the best retailers aspire. One example from a retailer we spoke with illustrates this: pureplay Chemist Direct [irdx RCHD] is currently looking at mobile because that’s what its customers want. But how do you sell products that might require a customer to fill out a six-page form over a smartphone? What if there’s a way that you might use voice rather than typing to fill out this form? That’s one scenario the company is exploring.

The fact Chemist Direct is exploring this scenario brings us to a final point. All the issues around legacy technology, resources and so on can’t be an excuse. Customers will keep demanding great customer experiences and every time forward-looking retailers try something new that works, it ups the ante for everybody else.

For a more in-depth analysis of our research into customer experience, please go to http://etail.li/59a04 where you can download a fuller report at no cost.
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