Customers are demanding service that matches their needs. Chloe Rigby reports on what that looks like and how European retailers are responding.
Make no mistake – shoppers are now in charge. If retailers do not respond to the way that customers behave and the service that they demand, they will lose potential business. After all, it’s never been easier to click away to a rival site. Customers want service that works, on their terms, and that means retailers have to be accessible in the channels and languages that shoppers want to use.
Those retailers that succeed in encouraging shoppers to buy across channels are well placed to be the winners in this competition. There’s plenty of evidence suggesting that customers who use more than one sales channel to shop spend more. Superdry owner SuperGroup said in full-year results published in July 2017 that its own research had shown that, “multichannel customers are more valuable to us than single channel customers as they spend more often and have greater brand loyalty”.
IREU Top500 research aims to measure retailers’ performance across metrics that relate directly to customer service, such as how long they take to answer a phone call or to resolve an issue via social media. But it also measures performance through how quickly a retailer’s website loads, both on desktop and on mobile, and how far retailers go to localise the shopping experience for visitors from the 32 different markets in the European Economic Area, plus Switzerland.
It found that Top500 websites fully load in an average of 7.7 seconds, although leading retailers within the index offer faster websites. Czech electronics and computer retailer Alza, for example, stood out for a domestic website that was 13% faster than the average Top500 retailer. And while most retailers serve one market in one language, retailers such as each Next, Apple , Zara and H&M at least 10 European languages, communicating with shoppers across a range of engagement channels. These are the traders that are leading the way in the current fast-changing retail environment.
“Shoppers are now in charge. Customers want service that works, on their terms.”
The retail experience
With disruptive technologies enabling sea changes in shopper behaviour, retailers must respond accordingly. This started with the rise of the internet, then the smartphone, although it’s now platforms such as social media that are being used by customers to engage with retailers.
Eva Cullen, head of customer fulfilment operations at UK department store John Lewis says that it’s important to use the customer to both see what changes are happening and prioritise their responses to this. She points to the way that shoppers now expect to be treated in a consistent way, no matter how they buy with a retailer.
“We’ve seen our customers continue to enjoy being in John Lewis shops but wanting a retail experience, and shifting that physical purchase, online,” she said, speaking at Salesforce World Tour. “The popularity of click and collect has meant we’ve had to change our business model. The challenge for us now is how to give online customers parity. Whether they enjoy fashion or are shopping for a washing machine in branch, when they go online to the desktop or mobile, it’s about making sure the experiences are similar. Our ways of working, using legacy systems, have had to adapt. Services are a more complex area and our focus is now on building seamless services for retailers.”
Regis Koenig, director of customer services at French electricals-to-books retailer FNAC Darty, says that shoppers now expect ubiquity and instant access.
“In the next few years, we’ll see the rise in importance of millennials and Generation Y, whose expectations are around not wasting time shopping,” Koenig said, speaking to InternetRetailing ahead of the InternetRetailing Summit. “If they go shopping, it’s either a very good experience or they just need a product to be sent to them. This trend will increase.” He also sees a move towards customers demanding more transparency about the products they buy: “For Darty, there are questions about whether the washing machine you’re selling me can be repaired, and how long it will work for. Everybody has access to more and more data, so the new rising generation will expect brands to be very, very transparent about the service and the products they sell.”
He thinks retailers can prepare for this new level of scrutiny: “We need to start thinking about what information we can deliver to the customer right now on how we work and how we behave on the market. In France, for example, we see that lots of people are complaining about Amazon not paying taxes. We can establish this kind of information and we should start thinking about what else we can share with our customers that they might like to know.”
Claire Carroll, head of member and customer services at UK grocery-to-electricals retailer The Co-op, leads a team of about 200 customer services staff. Speaking to InternetRetailing at Salesforce World Tour, she talked about seeing a significant shift towards shoppers using social media.
“How customers get in touch depends on what the type of query is,” she said. “We get everything from, ‘There’s not enough chicken in my chicken sandwich,’ to, ‘I’ve had an accident in store or your lorry has driven into my car.’ The more serious the complaint, the more people want to speak to somebody but with more trivial complaints, people prefer email. Social media, especially Facebook and Twitter, is a really strong channel and has trebled in size in a year and a half.”
She went on to note that this shift has been at the expense of email: “Young people today don’t even use email. I think they are now a lot more confident in terms of posting their views about companies online, so the challenge we face is to get to those customers who are posting negative thoughts and resolve their complaints as quickly as possible. When a customer is unhappy, we try to contact them directly. In my experience, it’s always better to speak when someone is aggrieved about something as a slow response to an online complaint can stick around to damage the brand.”
When Carroll joined The Co-op, the customer call centre was abandoning 20% of calls and the average response time for a customer query or complaint was more than a week. Now, she says, her target is to respond to social media enquiries in 90 minutes and to emails in less than two days. Abandoned calls have dropped to 2% and the difference, she says, has been to give call centre staff the ability to do anything they like in order to ensure that customers are satisfied.
“Each customer who calls has bothered to spend time and give us feedback about our products and services. That’s an absolute gift to us and that’s how we need to treat it – with a thank you to every customer that has bothered to get in touch.”
Looking to the future
Retailers such as these are already looking to the use of new emerging technologies as they consider how best to improve the service they offer customers.
AI-powered chatbots, according to The Co-op’s Carroll, have a role to play in customer service but this will be in the most appropriate way, without ever giving the false impression that they are really human beings. “We are exploring chatbots but I want it to be about the transactional,” she said, adding that chatbots may fill a valuable niche by offering out-of-hours services.
“Traditionally, customers liked to be serviced over the phone but it’s no longer acceptable to have the contact centre open limited hours. It’s about broadening channels and embracing technology, which is why we’re looking at where we can use chatbots.”
Meanwhile, John Lewis is also looking to the use of automation in areas such as fulfilment, as well as the potential of AI in a marketing context. “We can then start to communicate with the customer, reinforcing that everything is okay,” said Cullen. At the same time, like The Co-op, John Lewis sees the importance of empowering staff. For the department store, she says, the question is: “How do we empower them to exceed customer expectations?”
Other retailers are tapping into the power of automation in ordering. Devices such as Amazon’s Alexa, for instance, are making a difference to the way that shoppers order and keeping up with this type of innovation will certainly be a challenge for European competitors. Darty’s Koenig believes that it will be important for retailers to focus on delivering exceptional service in just one or two areas: “Since I can’t do everything, I need to pick something and do that very, very well. We really need to ask ourselves what our added value is – the thing our customers will value the most. One brand may offer one-hour delivery while another may have the cheapest prices and another will develop a lot of different methods but just focus on a few products. When Amazon launched one-hour delivery with Amazon Prime, it did so on only 2,000 SKUs. It was very specific.”
But even where new technologies are used, the ultimate aim remains constant. According to the Co-op’s Carroll: “For me it’s really simple. It’s about customer satisfaction all day long. From a business perspective, it’s about basket spend. So, as a result of interaction with a shop or a customer service agent, will that customer spend more with The Co-op?”
“Young people today don’t even use email. They are more confident in posting their views about companies online” Claire Carroll, The Co-op
There’s agreement too on the importance of making service work, rather than waiting for it to be perfect. John Lewis’ Cullen thinks it’s important to maintain a flexible and agile approach to retail, focusing on what works at this particular moment in time: “By the time it’s perfect, the customer’s needs will have changed.” The Co-op’s Carroll makes a related point: “Don’t sacrifice ‘improved’ for ‘perfect’. Listen, listen, listen to customers.”
At the cutting edge, it’s clear that retailers across Europe are working hard to improve the service that they offer customers. Making it easy for customer to engage and to get the shopping experience they desire are fast becoming points of differentiation in a world where those that please the customer will see them return again and again.