Creating a Frictionless Customer Experience

Transcription

1 Creating a Frictionless Customer Experience RETAILERS PLAYBOOK SPONSORED BY

2 Why Frictionless Matters. In a preceding point of view Frictionless Customer Experience: Why Retailers & Brands Must Go Beyond Omnichannel, we illustrate why it isn t enough (or sometimes even prudent) for retailers to obsess over the O-word. Instead, they must focus their energies on aggressively removing friction from the customer experience or risk eroding customer lifetime value, losing loyalty and diluting brand value. In this point of view we share key findings from a global survey of 150 retailers, illustrating the value of being frictionless. Insights from the survey as well qualitative interviews with leaders have helped shape prescriptive recommendations across 4 key areas for retailers to focus on. An action roadmap is provided for each area, including key organizational and technology enablers. SURVEY DEMOGRAPHICS Global coverage: United States, United Kingdom, Germany, China and Australia The focus is on senior-level decision makers C-level Executives 29% Half of respondents have revenue greater than $1 billion (27% $1B to $4.9B, 9% $5B to $9.9B, and 13% more than $10B). 25% Marketing Top line-of-business departments represented are 21% Corporate 20% Merchandising 91% of respondents have job titles in a line-of-business department. The rest are in IT. VP-level 25% 28% Apparel and Accessories 17% DIY Top Retail Segments 22% Specialty 9% Grocer 9% Department Store

3 Payments & Commerce: The Connective Tissue 54.1 MILLION Europe The ability to conduct seamless commerce is a basic customer expectation; yet few retailers are able to provide unified commerce (single cart across channels, seamless order splitting at the point of sale) and seamless payments (EMV compliance, contactless checkout, full featured mobile wallet). GLOBAL MOBILE PAYMENT USERS BY END OF MILLION North America Payments has the potential to be the unifying tissue of the shopping experience. It already is in the case of pureplay online retailers that offer features such as one-click checkout and secure customer profiles. Extending that experience into the store is the big challenge for brick and click retailers. Retailers must shun the tendency to view mobile payments as a way to bypass bank-fees, and instead explore the appropriate application of payment technology suited for their customer experience strategy. The widely panned and largely unsuccessful mobile wallet and application launched by a who s-who conglomerate of US retailers (CurrentC) is a perfect illustration of how not to approach payments. Instead, consumer oriented mobile payment platforms and wallets Apple Pay, Android Pay, Boku, AliPay should be the benchmarks of the convenience consumers expect. POINTS OF FRICTION Different carts in different channels Inability to split orders at the POS Not accepting a preferred payment choice Long checkout lanes and wait-times Security and identity validation KEY ENABLERS Omnichannel POS (Unified Commerce Platform) Order Visibility at the POS Near-field communication (NFC) Mobile POS PCI, EMV compliance Social Commerce Strategies Fast POS application performance MILLION Asia Pacific GLOBAL M-COMMERCE MARKET GROWTH US$ 204 BILLION 32.4% CAGR US$ 626 BILLION

4 Personalization: Emotional Engagement The simplest definition of personalization is delivering relevance across all customer interactions while building trust. Relevance is a function of leveraging customer context to sharpen messaging, communication, offers and customer service. Trust is built on transparency, security and involving the customer in how their personal data is used for their benefit. IMPACT OF PERSONALIZATION: Basket Size Increase Across Channels Stores 17.4% Web 11.1% Mobile 12.9% Personalization both as a concept and in terms of the underlying technology that enables it is rooted in ecommerce. Brick and click retailers must extend its definition to include arming store associates and customer service representatives with the relevant insights at the right time, right place in order to move from personalized messaging to a truly personal experience. Store associate recommendations are 25X more effective at converting customer intent than personalized s. 1 POINTS OF FRICTION Lack of cross-channel customer identity Irrelevant messaging and offers Information overload Lack of transparency on data-capture and use Privacy and data-security KEY ENABLERS Customer data master Investigative/predictive Big Data analytics Recommendations engine Proprietary algorithms and IP EKN Omnichannel Personalization Research, 2015

5 Flexible Fulfi llment: Customer Maxima Consumers want fast, free shipping and free returns. They want to know if an item is available at their local store. If it isn t, does the retailer have it elsewhere? They want the flexibility of buying anywhere, choosing if they wish to pick-up or ship, and the ability to return anywhere. While the demands of the consumer may seem unreasonable and daunting, the fact is they are forcing retailers to think of stores as hubs of retail and of inventory as an enterprise-wide asset. Rather than blindly turning on omnichannel fulfillment, the smartest retailers are identifying what matters most to their customers and then introducing those capabilities in a gradual, considered manner with corresponding investments in store associate training. Omnichannel order fulfillment is fraught with business process, technology and organizational pitfalls that can introduce unwanted friction in the customer experience from order inaccuracy to long wait-times at store pick-up, from disgruntled store associates and managers (for they get saddled with returns of online orders) to the perennial out-of-stocks issue. Done right, a flexible fulfillment strategy can reduce profit erosion by decreasing markdowns and safety stock, increase revenue per square foot by improving space utilization in the store, and increase attachment rates for pick-up and return customer visits. The key is ensuring the customer experience is seamless. Else, the expected benefits will remain vaporware while the costs will be very real. POINTS OF FRICTION Out of stocks Order pick-up wait times Inaccurate orders Paying for standard delivery Long order-to-ship times Speed of delivery KEY ENABLERS Omnichannel Order Management System Inventory visibility at the POS Inventory and stock analytics RFID IMPACT OF USING STORES TO FULFILL ONLINE ORDERS 12.5% sales lift

6 Customer Service: The Human Touch There are fewer second chances in retail today. 86% of customers quit doing business with a company because of bad customer experience, up from 59% four years ago 2. Store and customer service associates are the frontline of a retailer s customer experience. Retailers must empower them through training and simplified business processes; arm them with richer information (customer, order, pricing, product and promotions related); augment key aspects of the in-store experience with technology such as mobile point of sale and kiosks; and redefine their KPIs to ensure their primary focus is delivering a positive customer experience. Failed customer service experiences can erode as much as 65% in customer lifetime value The role of technology is to support rather than to replace store and service associates. POINTS OF FRICTION Long wait times (call center and in-store) Inflexible policies Long resolution time Lack of engagement on social media Inconsistent product, pricing or order information KEY ENABLERS Associate training and empowerment Process simplification Customer data master CRM including social CRM 2 Harris Interactive Customer Experience Report

7 Frictionless Customer Experience Action Roadmap Retailers need a holistic gameplan to aggressively identify and eliminate points of friction across the 4 key areas of the customer experience. The framework below is intended to provide a strawman of such a plan. Retrain the Oganizational Fiber Redefine KPIs for store and ecommerce teams so they are focused on the customer experience and order value rather than on channel or category centric performance Establish or augment a role accountable for the customer experience. Empower the executive responsible with enterprise-wide business process change and technology integration Build Analytics as an Enterprise-Wide Capability Build or augment a single view of customer data and activity Improve analytics maturity with a specific focus on predictive and investigative customer analytics Empower store associates with customer profile and recommendations to deliver a more personal experience Create Bi-Directional Customer Engagement Build or strengthen a social media engagement and customer service strategy Be more transparent with customers about how their data is used to personalize the customer experience. Allow them to view and edit their personal data and activity history

8 Create a More Inclusive, Responsive Technology Architecture Improve application and infrastructure performance for key customer facing experiences such as point of sale, ecommerce, mobile app, in-store WiFi and kiosks among others. Evaluate the impact of using cloud-based technology or solutions to improve peak performance, speed to market and agility Re-architect enterprise IT to be more inclusive of store associate and consumer devices; of 3rd party web and mobile services through APIs. Prepare for a Mobile-First World Order Develop a mobile-first technology orientation including optimizing all digital touchpoints for smartphones and tablets. Frequently test and optimize the user experience across all digital touchpoints. Ensure new UI (such as for wearables or TV-based apps) are designed from the ground up with native capabilities and user-centered design principles, rather than by extending existing mobile UI. Amplify the Supply Chain Focus on profitable omnichannel order fulfillment. Use stores as distribution centers, enable order and inventory visibility at the point of sale and aim to achieve real-time inventory visibility Focus on order accuracy and store pick-up wait-time to measure the health of in-store fulfillment. Track pick-up and return recoup or attachment rates to measure ROI While the core tenets of a frictionless experience are the same globally, regional variance in relative maturity of business process and technology adoption and cultural and consumer preference differences should be accounted for when developing a plan of action. The research underpinning this report is based on participation from retail executives across the United States, United Kingdom, Germany, China and Australia. To request detailed, country-specific data contact us or tweet us

9 About EKN Our research is developed using inputs from the end user community and the end user community extensively reviews the research before it is published. This ensures that we inject a healthy dose of pragmatism into the research and recommendations. This includes input of what research topics to pursue, incorporating heavy practitioner input vis interviews etc., and ensuring that the blend of research takeaways are oriented towards a real-world, practical application of insights with community sign-off. For more information, visit us at EKNinfo@edgellmail.com About RIS RIS News is the essential source of information for retail executives, helping them connect with relevant content, engage with their peers and find best-in-class business solutions and strategies to make smarter IT and business decisions. We help executives adapt to change, stay competitive and maximize profits and productivity. Visit: About IBM IBM helps enterprises transform, innovate and grow. We deliver high value for our clients by bringing deep industry expertise to an industry-leading portfolio of consulting, IT implementation services and ecosystem of partners. Our unmatched analytics capabilities, cloud and cognitive offerings, enterprise systems and software are bolstered by one of the world s leading research organizations. We help retailers predict demand to meet customers changing needs; create a differentiated customer experience while fulfilling on demand; and build a secure, agile enterprise that supports innovation and drives profitable growth. With a significant global presence, IBM operates in more than 175 countries. Visit: ibm.com/retail About CGT Consumer Goods Technology is the essential source of information for CG executives, helping them connect with relevant content, their peers and best-in-class business solutions and strategies to make the right IT decisions. We help executives adapt to change, stay competitive and maximize profits and productivity. Visit: SPONSORED BY