CONSUMERS INCREASINGLY WANT PERSONALISED SERVICE AND PERSONALISED RECOMMENDATIONS, AND THEY WANT THEM NOW, NOT LATER. HOW SHOULD RETAILERS GO ABOUT MEETING THE DEMANDS OF SUCH CONSUMERS? ANDY FRY REPORTS
Study after study shows that enhanced personalisation leads to an increase in conversion rates, higher average order
values, greater customer lifetime value and increased website revenues. But how do retailers know what customers really think about online experiences? And how do companies act onsuch insights?
At recommendation and personalisation specialist Peerius, the response to such questions is to look at the stream of data generated by a person’s online journey. “The key to improving experience is constant engagement with the customer,” says Peerius co-founder Roger Doddy. “The more you learn through their behaviour, the easier it is to create product recommendations that deliver a relevant online experience.”
The Peerius approach is based around two key engine, which throws up product recommendations at various stages during the consumer’s online post-transaction emails to feature personalised recommendations too. “These services give the consumer’s online sessions increased relevance and that converts into a greater likelihood of purchase,”says Doddy.
“The beauty of this approach is that recommendations that are served during a session degrade if they are not followed up, creating room for others to surface. Do that constantly and you start to see a fully personalised experience.” According to Peerius, introducing its personalisation products to Notonthehighstreet.com led to a 31 per cent increase in average order value, while introducing SMART-mail to ChemistDirect’s email marketing had an immediate impact on clickthrough and conversion.
Turning to men’s shirt retailer Charles Tyrwhitt , the challenge for Peerius here, says Doddy, was how to give the company’s online interface some of the same qualities as the physical shop experience: “A classic scenario was when an item was out of stock.
In the shop, the sales assistant would know what the customer wants and recommend an alternative. But that wasn’t happening online. We used our SMART-rec engine to tackle that problem and also make recommendations on products that complement their purchase. The result was a 36 per cent increase in average order value (AOV).”
SHOPPING CART ABANDONMENT
QuBit comes at customer experience in a similar way, using behavioural insights to help clients personalise cites the example of LK Bennett, which wanted to address the issue of high-value customers who had added items to their checkout basket but never purchased. “What we did was add a free delivery message for people who were leaving the basket page after adding a product to their basket,” he explains.
“The result was an 11 per cent increase in conversions in this segment.” behavioural approach to customer experience works well because of its immediate impact: “We’re not spending five to six months implementing changes. It’s a kind of real-time retailing where you can identify an issue and act on it straightaway.” This approach is moving to another level now that mobile devices are so central to the consumer journey. QuitBit research analyst Robin Jack says: “One of the most effective ways to personalise is by using a customer’s local to alter your messaging.
They could be on their way to the airport to go on a beach holiday and you could offer the option of click-and-collect diving equipment.”
Peerius’ Doddy is equally enthusiastic about what mobile brings to the customer service story: “For people who opt in to the geo-location piece, there’s such a lot you can do. For instance, when they’re within 100 metres of your shop, they could get a message saying there’s going to be a flash sale for the next 60 minutes.
However’ it’s important to recognise the improved performance outlined above doesn’t mean retailers have somehow cracked the customer experience puzzle. It doesn’t, for example, explain why people abandon purchases on the point of completing their transaction. Nor does it fully explain the way they weave backwards and forwards between the physical and virtual retail experience.
One way of trying to fill in these gaps is to ask customers what they think, listen to what they say and respond. QuBit, for example, offer a service called Vision Opinion. “This is a feedback service which triggers as people are about to leave,” says Cooke. “It asks a very open-ended question about what they like and what can be improved. We get millions of pieces of feedback that are broken down into categories.”
SPEAKING FROM EXPERIENCE
A NEW BATTLEGROUND CUSTOMER ENGAGEMENT“As digital channels expanded, the emphasis was on buying traffic cheaply. But the new competitive battleground is experience.”
Graham Cooke, co-founder, QuBit
THE BIG DATA FACTOR
“Big data is gold for retailers but a lot of them don’t know how to mine it. They haven’t put in place the processes to aggregate,normalise, cleanse, analyse and operationalise that intelligence.”Rob Garf, VP of product and solutions marketing, Demandware
LOOK BEYOND COST
“A lot of brands and companies still haven’t got beyond seeing
customer service as a cost rather than a business benefit.”
Nick Peart, marketing director, EMEA, Zendesk
TALKING BACK
Texas-based Bazaarvoice is a feedback specialist, a company that aggregates opinion from 500 million people a month on 20 million products. This feedback isn’t just used internally to access a site’s strength and weaknesses, it also has a direct role to play in persuading customers to purchase items.
“All the research indicates that consumer reviews are significantly more trusted than manufacturer descriptions,” says Bazaarvoice spokesman Matt Krebsbach, “so our role is to aggregate opinions, questions and experiences, and channel them into places that help sales and marketing teams, and influence purchases decisions.”
Developing a direct dialogue with consumers is at the heart of what Bazaarvoice’s Connections technology does. This enable brands to answer consumer question that have been posted to retailer sites in real-time. In doing so, saying Krebsbach, retailers are directly able to enhance user experience and close sales that might otherwise have been abandoned, for example, where a customer is wavering before committing to a big-ticket item.
GOING INTO TURNAROUND
Particularly intersting is how brand to customer human dialogue can turn around what might have started out as a bad experience. Based on an analysis of data from more than 100,000 pieces of user-generated content, Baazarvoice says: “When consumers saw a brand’s response to a negative review, their opinion of the product and their intent to purchase doubled compared to when they saw a negative review without a brand response offered to refund, upgrade or exchange a customer’s product for a different model, shoppers were 92 per cent more likely to purchase than shoppers who saw no response.”
The key lesson here, says lisa Pearson, chief marketing officer at Baazarvoice, is that “responsiveness is one of the most important dimension of “human” commercial relathionship.
Companies that want lasting relationship with consumer must partecipate in experiences that foster trust, dialogue, and collaboration.”
Reviews, ratings and other forms of feedback aren’t without their flaws (customers can be irritated by pop up surveys and are sometimes sceptical about the authenticity of reviews). But there’s clear evidence that customer experience can be improved by soliciting opinions. The logical extension of this is to support behavioural and feedback-based analysiswith bespoke surveys.
US-based Demandware, for example, recently teamed up with the University of Arizona to survey 7,000 consumers in the US, UK, Germany and France. The result was an insightful piece of work about an audience segment that Demandware calls ‘digital divas’.
REACHING DIGITAL DIVAS
Rob Garf, Demandware ’s VP of product and solutions marketing, says: “Digital divas are only 22 per cent of fashion shoppers but their purchasing power represents 69 per cent of all fashion spend in Europe and the US. As opinion leaders, they are five times more lickely than non divas to influence freinds, family and colleagues, which makes them an exponentially valuable segment to attract and retain.”
Where this gets really interesting is in how digital divas shop. “They are extremely active with social media,” says Garf, “but more importantly they use an average of 3.4 destinations during their shopping journey. In other words, retailers who want to appeal to this audience need to provide a seamless multichannel experience, one that provides fluid and relevant interactions across physical and digital channels.”
The problem is that many companies are operatingwith systems that are not geared up for a consumercentric, omnichannel approach: “Consumers dictate and control the shopping process, but existing architecture, applications and vendor relationship aren’t keeping pace,” says Garf. “While there is an aspiration to better understand consumer behaviour,organisational structure to analyse and operationalise these insights. This has caused siloed systems that and complex integrations that slow innovation.
Omnichannel strategies cannot be effectively executed in this environment.”
This, says Garf, is why Demandware has created Digital Store, a tablet-based solution that allows salesassistants to plug into customer, product and inventoryto get up to speed with a consumer journey that mayalready be under way. For example, sales assistants can search stock for in-store customers, whether that stock is in the store, a warehouse, or elsewhere. It also means shoppers can pay through web-based payment methods from the store. Also interesting is that items saved in the customer’s cart can be added to any in-store purchases.
AFTER THE MONEY’S BEEN TAKEN
This emphasis on omnichannel shouldn’t stop when the sale is sealed, adds Nick Peart, marketing director, EMEA at Zendesk , a company that builds cloud software for better customer service. His company has just published a piece of international research that focuses on post-sale customer service.
“We found that a high proportion of customers feel that brands pay more attention to generating sales across the channels than providing integrated customer service,” says Peart. Echoing Demandware’s service function is not joined up: “[A] silo approach eaves a lot of customers frustrated that the support system has not kept pace with the way they’ve been sold to. They want to be able to contact the company in question by any available channel but often find themselves having to default back to the phone.”
Zendesk’s response has been to create a customer service platform that centralises all data about customer and his or her current concern: “A single desktop provides a customer sales audit and all the conversations that have been had on the current issue, regardless of which platform they came through.”
Explaining the rationale for this, Peart says: “Brands that get customer service right are likely to be rewarded with loyalty.” This claim is backed up by data from the report. In the case of UK consumers, for example, 82 per cent said they would use a brand again if they received excellent customer service while 62 per cent said they would recommend such a brand to friends and family.
One area of real concern highlighted by Zendesk is the inadequacy of self-service solutions. While 53 per cent of people would like to use self-service, only 27 per cent do because they think the phone is a more effective channel. This gap widens among 18-34 year-olds, explains the report: “The younger the customer, the more likely they are to complain and the more demanding they are of brands to deliver real-time and self-service support options.” In other words, explains Peart, companies that don’t address this expectation gap risk alienating their most important demographic.
WHAT’S CHANGED?
The quality of customer experience is vital within retail. Accordingly, more and more retailers are recognising the importance of techniques associated with personalisation – from the analysis of data to technologies that enable retailers to react in real-time to consumer demands.
