CX Beats: CX Tips Other Industries Can Learn From Retail Sector
Retailers are leading the way in creating exceptional customer experiences by focusing on customer journeys and leveraging technology. They have shifted from brick and mortar to online channels, enabled contactless processes, merged offline and online experiences, and used AI chatbots for personalized assistance. Other industries can learn from these practices to enhance their own customer experiences.
Episode Transcript:
Svetlana: Hello all, hope you are doing well! As promised, we are back with another session of our LinkedIn Live Stream, and we are glad to have Saurabh again with us today! Thanks so much Saurabh for your time!
Saurabh: Hey Svetlana, it’s always great to catch up! So what’s on our agenda today?
Svetlana: You know I got thinking recently that when we think about customer experience, we invariably look to retail to see what this industry is doing. Retail always seems to be at the forefront when it comes to creating exceptional customer experiences. Even in today’s digital environment, retail is showing the way. I wanted to ask you what can other industries, say food & beverage, travel & tourism, healthcare, auto, etc. learn from the savvy retailer. What practices can these other industries adapt from retail?
Saurabh: Yes, you know the entire retail landscape is changing at a breakneck pace. For customers, it’s no longer just about buying a product, it’s about the entire experience of buying. Is the brand making them feel special and valued? Is the brand available on channels where they hang out? Does the brand care about their safety and convenience? Is the purchase process frictionless? These are issues customers care about. And you know the retail leaders are literally shifting their focus from transaction values to customer journeys. They are putting the customer at the front and center of their strategy. And technology is aiding this change, making so much possible.
Svetlana: Could you shed some light on what strategies they are deploying to improve CX?
Saurabh: Oh there are lots of things really. I could go on and on. If you’ve noticed, right around the time of covid, people had to avoid all physical contact. People needed to fulfill their retail needs in a safe, clean, reliable, and convenient manner. They were relying a lot more on digital purchases to meet their needs. Smart retailers pivoted overnight and enabled contactless processes, right from ordering and payments to pick-up and delivery. Contactless payments like those via a mobile app really picked up at that time. And you know many retailers are investing in mobile transaction capabilities to improve customer convenience because this trend is set to stay. People are simply no longer interested in digging into their wallets to make payments and opt for mobile payments instead. Even with covid receding and store footfalls increasing again, people overall prefer less contact and love in-store kiosks with self-checkout options.
Svetlana: I think this is also helping stores in ensuring faster checkouts and minimizing their labor costs.
Saurabh: Oh absolutely. You know we must not forget that the pandemic has left most businesses reeling from economic pressures and contactless technologies are definitely looking like a worthwhile investment because they help employees become more efficient. You know the thing is that we are seeing an unprecedented level of offline and online synergy in retail. Customers have simply stopped differentiating between digital and in-store. Big retailers are integrating brick and mortar with virtual. Store spaces are being reimagined.
Svetlana: Yup, I went to a store recently where they had put up huge digital touchscreens where I could actually type in my customer ID and was able to log into my online account. I paid online while collecting my purchase in the store itself.
Saurabh: Yes, even I visited a showroom recently where sales persons were roaming around with IPADS where they accessed our customer profile by typing in our customer IDs while we were at the store. They could instantly see our accrued loyalty points and tell us how to redeem them during my current purchase.
Svetlana: I also increasingly see QR codes being displayed on in-store signages and product packaging.
Saurabh: You know QR codes are really making a comeback in a big way. They are also definitely a part of going contactless and this merging of digital and physical. Many brands are in fact incentivizing customers to scan the QR code on their mobiles, they are offering free deliveries, discounts, etc. so that customers scan the code that will link them directly to the specific product page on the brand’s website, or link to the brand’s official messaging channel, say WhatsApp, where they can have conversations with agents or even bots for routine queries, say about a product’s availability.
Svetlana: So basically it’s all about driving the offline traffic to online.
Saurabh: And vice versa – you can also book an in-store consultation by placing a request on a brand’s app. You can even use an app to find out if an item will be available at a particular store! You know the thing is that an unprecedented level of offline and online synergy is happening in retail. Customers have simply stopped differentiating between digital and in-store. Big retailers are integrating brick and mortar with virtual and trying to create a seamless experience between the two. And they are achieving this by getting to know their customers really well and then using that information to target them with products that fit well with the customers’ unique needs.
This is not really an easy feat, given today’s customer segments are not static. They keep moving from channel to channel in their purchase journeys. Do you know, shoppers today use an average of nine different touchpoints to interact with brands. And they spend much of their time away from the brand’s owned platforms – on messenger apps and on social media platforms. On cue, smart retailers are also expanding their presence across channels at greater frequency in order to touch base with as many customers as possible. By including more touchpoints in their strategy, retailers are also gaining more customer data in the process, and they are using this data to create better and more consistent customer experiences across channels.
Let me give you an example. Beauty product retailer Sephora has done something quite unique. They collect information on customer preferences via an app as customers explore and rate products online, and make this information available to sales staff when they visit a store in person. According to analysts at McKinsey, initiatives like this typically reduce marketing costs by around 20%. Sephora also deploys another tactic.
Svetlana: What about other industries? Where are they at when it comes to this marriage of offline and online?
Saurabh: You know even other industries are accelerating the shift to digital and creating some kind of synergy between physical stores and digital spaces. During the pandemic, the food industry’s online sales exploded. Contactless deliveries, curb-side pick-up become very common.
Even the auto industry, which has always depended on in-store sales pivoted to online. Car dealerships started leveraging digital channels like WhatsApp to provide information on new cars, offer pre-and post-sales support, share proactive updates, schedule visits to stores beforehand, and so on.
Also the hotel industry benefitted from conversational digital interfaces that could handholds their clients right from room booking, rescheduling, cancellations, contactless check-ins and check-outs, contactless menus at their restaurants.
The healthcare industry too came online – doctor appointments, medicine deliveries, lab reports, all were shared virtually.
Even the education industry started leveraging digital communication tools like WhatsApp to announce important dates, offer enrollment assistance, onboarding, counselling, etc. online.
But yes, no doubt retail is really leading the way, no doubts about that!
Svetlana: Wow! So true! Retail is really pushing the envelope when it comes to customer experiences. They have really taken customer experience to a whole new level.
Saurabh: Yes, and you know the important thing is to understand that the pandemic has changed customer behavior and accelerated digital adoption, and these changes are here to stay. And customers will expect this same convenience from other industries as well. So they will have to change with times or risk losing out to competitors. Customers are a very impatient lot, remember. If they don’t get the level of convenience they have come to expect thanks to companies like Amazon, they will take no time to ditch a brand and move on to something else.
Svetlana: So true. I also hear a lot about another concept now – virtual clienteling! Isn’t that a hallmark of retail now?
Saurabh: See traditional clienteling has been around for a while. It was used by luxury retailers as a way to provide one-to-one assistance to high value customers when they were out shopping. Specialists would assist customers in an ultra-personalized way, suggesting styles, getting them the right fit, and welcoming the customer each time they visit the store. This assisted selling would improve conversions, maximize each customer’s lifetime value, and also increase the average basket size.
With covid, clienteling has also moved online. And an interesting thing has happened, not just luxury brands but other mainstream retailers who have a larger customer base, cheaper ticket items, and tighter profit margins have also started virtual clienteling with the help of conversational messaging platforms powered by automated bots to facilitate clientelling services. Chatbots are doubling up as virtual assistants, helping customers locate the nearest store, book an appointment with an in-store advisor, or buy online and pick up in store. These are innovations other industries can learn from. Sephora is a master of virtual clienteling. The brand uses an AI chatbot to help customers find the right products based on their face and skin tone. By using customer data and automation, Sephora is able to replicate the in-store experience in a highly personalized and effective way. You know many clothing brands allow customers to even virtually try out products and even recommend products based on their body type.
Other industries can take cue and offer dedicated services such as recommending products based on the customer’s preferences, sharing product catalogues, informing them of product restocks, confirming payments received, sharing order tracking updates, following-up purchases with thank you notes, booking in-store appointments, announcing new product drops, and so on.
Svetlana: Right. What innovation is the retail industry using when it comes to loyalty programs?
Saurabh: You know nowadays customers are notorious for dropping out of loyalty programs – if they find the reward to be uninteresting, or the redemption experience to be inconvenient, they don’t bother redeeming and happily defect to other brands. Claiming rewards has always been a huge pain point, with customers facing a number of hurdles including:
> Ability to redeem rewards through preferred channels
> Poor customer experience on mobile or websites
> Loss of loyalty points and delays in crediting benefits due to technical glitches in linking rewards with online accounts
> Long call wait times and transfers to multiple agents before customers can get their problems addressed
> Call center agents not aware of issues with online channels due to lack of integration
Svetlana: So one could say that brands also need to adapt their loyalty programs to the digital age?
Saurabh: For sure. The few businesses that are successfully running loyalty programs today have integrated loyalty into the customer’s digital experience. As customers have pivoted to online shopping, smart retailers have taken their digital loyalty programs online. They have modernized the rewards program to appeal to a customer’s desire for convenience and seen greater loyalty. They have actually made loyalty programs available on messengers. Brands like Sephora have even experimented with incorporating giveback programs, allowing consumers to donate to non-profit causes within their loyalty programs, creating goodwill with customers. You know they also offer their most high value members early exclusive access to new products, invitations to special events, free beauty services, and more.
Savvy retailers have made their rewards redeemable across all channels. They have invested in technology platforms that are fully integrated with internal systems such as e-commerce, ERP, and POS. Platforms that can support cross-channel rewards redemption. This has created an infinitely better redemption experience for their customers, and this is something other industries can learn from.
Svetlana: Also I think now customers are not just rewarded for transactions. They are also rewarded if they write a positive product review, take part in a survey, or participate in a campaign. Also, the reward itself is now not always in the form of a discount. It can also be as an invitation to an exclusive event.
Saurabh: Ya right.
Svetlana: I think what helps retails is also very detailed record keeping. What the customer likes, what items they browsed, what items they bought last, and so on. Retailers who have easy access to such records can improve their customer service. By keeping an orders history, consumers don’t even need to call up support agents to clarify order status. They can simply re-order something. And this is probably something other industries can learn from too. For example, in the food & beverage industry, an order history can help customers reorder the same tasty dessert quickly, likewise in the in spas and salons, customers can choose the same specialist that they liked previously.
Also online ordering is similar to online booking for other spheres – customers can book a time slot for a service at a convenient time in advance without time-consuming long calls. Healthcare comes to mind. Doctor appointments are becoming a lot simpler to manage.
Saurabh: Absolutely! Coming back to retail, I think what’s helping top retail players is that they have successfully implemented personalization at scale. And they continue to raise the bar with granular, innovative offerings to individual customers. And they often do this by collecting zero-party data, which basically means data provided willingly by customers in the form of quizzes, surveys, etc. shared by the brand. The retailers get to collect a treasure trove of data from such questionnaires and use it to offer hyper-personalized offerings.
Svetlana: Also, isn’t the concept of dynamic marketing gaining ground?
Saurabh: Yes, see the concept of one-size-fits-all marketing is gone. Retailers are not sharing the same offerings with all customers. For example, if customers are loyal and buying regularly, a brand may not offer a discount to them on a particular day, but if the shopper is very infrequent and has shown up for a purchase one day, the brand will target this customer segment with discounts to woo them back.
Svetlana: Thinking of marketing, I also think the retail industry is very focused on its marketing program. They are very focused on making an extra buck during special holidays like Black Friday, Thanksgiving, etc. and tend to offer attractive discounts during such days.
Saurabh: Yes right. There’s really a lot other industries can learn from retail.
Svetlana: Well thank you so much Saurabh for another enlightening session. We hope you’ve enjoyed our discussion! We promise to be back soon with yet another live session on another topic of relevance! Take care!