The Retailer Winter_2017/18
How to Survive and Thrive in the Retail Jungle
Kareena Uttamchandani Senior Manager, Solutions Consulting Medallia
“It’s a jungle out there, and retailers who want to thrive need to become “customer obsessed” or risk becoming extinct.”
WHY CUSTOMER EXPERIENCE IS HELPING RETAILERS STAY AHEAD OF THE PACK The High Street as we know it is under threat. High profile store closures, declining footfall, missed targets, and an increasing reliance on online giants – have resulted in a stark outlook for the industry. Today’s shopper is also a different beast, with new requirements and demands – both of which are driving brands to rethink their practices. In the current climate it is not enough to put products on the shelf and offer a competitive price point – today’s shoppers expect more. However, the future needn’t be bleak. Those retailers that recognise the importance of experience and the powerful role of listening to customers stand to benefit and enjoy greater success than the competition. AS millennials now represent the largest global consumer demographic and, according to a study, that 65 percent 1 would rather spend money on experiences vs. material goods, simply selling products isn’t a viable strategy anymore. Great companies have made customer experience the centerpiece of their go-to-market strategy. The question often asked is “how to create experiences that sell products”? What follows below are three ways to help retailers not just survive, but thrive, based on our experiences of working with some of the most admired retail brands in the world and analysing feedback and behaviours from their customers. 1. Start a conversation The attention span of humans is getting dramatically shorter— some studies cite eight seconds. The average U.K. adult also spends on average two and a half hours per day on their mobile device 2 . It’s clear that in today’s highly-connected world traditional forms of communication between the consumer and the brand are fading. There are many sources of feedback and one that retailers can manage is solicited feedback via instruments like a survey. Several years ago, experience leaders in retail began shifting to very short, highly personalised surveys that became a natural extension of the brand interaction. One example is the reinvented taxi ride; following your journey a five-star survey is presented along with the name and photo of the driver. Another approach is e-receipt— embedding a request for feedback in the email immediately after purchase producing “near real-time feedback”.
provided suggestions—all in real-time. By Tuesday, modifications were in place and the feedback turned highly positive as their Net Promoter Score (NPS® 5 ) for the store rose by 4 points but, more importantly, sales of women’s apparel grew by a whopping 12 percent over the following three months. What’s clear is when the above strategies are implemented together, the outcome is exponentially improved. The lens is broadened to encompass the customer’s entire journey helping identify friction and opportunities. These opportunities are then acted on as innovation becomes a natural extension of the brand. It is these retailers who choose this path that will reap the rewards – encouraging greater brand loyalty, improving overall experience and benefiting the bottom line. It’s a jungle out there, and retailers who want to thrive need to become “customer obsessed” or risk becoming extinct.
However, these short, natural, and personalised solicitations for feedback should be seen as the beginning, not the end of the dialogue. When questions are few, yet relevant to the experience, and customers have the option to tell you what’s top of mind for them through comments, a response becomes a natural next step. Engage with the customer, but not with a generic auto-response. 2. Focus on the entire journey It’s common knowledge in retail that consumers who purchase from a brand via multiple channels spend significantly more. A study 3 of 46,000 participants found that omnichannel shoppers logged 23 percent more repeat trips to the surveyed retailer than those who only shopped via one channel. As such, making it seamless and enjoyable for consumers to shop across all channels must be a retailer’s ultimate goal. However, this can be challenging prospect in a world fuelled by instant gratification and social proliferation. According to a Google study 4 , about 82 percent of consumers consult their phone prior to making a significant in-store purchase. Odds are that the consumer expects the sales assistant to have more or at least different knowledge on the products than what they have just learned on their mobile device. In store environments where feedback is captured continuously and shared with associates in daily huddles for learning and development, the exchange is often quite different. Both the customer and the associate benefit from the shared feedback as associates are empowered to go beyond surface conversations and get recognised for their effort both by the customer and management. It is also very common to receive feedback across channels. For example, customers may share their experience on the website through the in-store channel, because in the customer’s eye - it’s one brand and one experience. It therefore becomes even more important to connect the journey across channels because your customer is already doing so. 3. Innovate, adapt, repeat Innovations come in all sizes—from micro to massive—and they come from many parts of the organisation. In fact, some of the best retailers we work with seek input from virtually all their customer-facing employees. With thousands or tens of thousands of employees interacting with customers and observing their behaviours, this is an incredibly powerful source of new ideas. In an effort to increase sales of women’s clothing, one retailer tested placing more women’s inventory toward the front of the shop shifting much of the men’s to the back. Over the weekend a feedback pattern emerged with the theme “this no longer feels like my store.” Customers provided feedback and store associates
KAREENA UTTAMCHANDANI // +44 (0)7595760969 // email@example.com // medallia.com
1 https://www.eventbrite.co.uk/blog/millennials-want-experiences-ds00/ 2 https://www.emarketer.com/Article/Mobile-Takes-Majority-Share-of-UK-Time-with-Digital-Media/1014676 3 http://www.medallia.com/resource/study-46000-shoppers-shows-omnichannel-retailing-works/ 4 https://www.thinkwithgoogle.com/marketing-resources/micro-moments/mobile-shoppers-consumer-decision-journey/ 5 Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.
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