CUSTOMERS EXPERIENCE WITH APPAREL AND ACCESSORIES WEBSITES A SUBCATEGORY OF THE FORESEE EXPERIENCE INDEX: RETAIL EDITION. Eric Feinberg Vice President

Transcription

1 CUSTOMERS EXPERIENCE WITH APPAREL AND ACCESSORIES WEBSITES A SUBCATEGORY OF THE FORESEE EXPERIENCE INDEX: RETAIL EDITION COMMENTARY & ANALYSIS BY: Eric Feinberg Vice President RESEARCH BY: Joyce Davis Research Analyst 2016 FORESEE

2 OVERVIEW In today s competitive apparel and accessories marketplace, improving customer experience (CX) is the front line in the battle for business growth. Apparel and accessories retailers have long understood the criticality of setting trends, but more recently are realizing the importance of the customer experience as well. Eighty-nine percent of companies say that CX is their number one competitive weapon as product differentiation diminishes (Gartner). Yet, many companies struggle to get clear understanding about the voice of the customer (VOC) aka a company s understanding of customer expectations, preferences, and aversions to guide their CX improvements. A whopping 71% of CX professionals believe their VOC programs are failing to improve customer experience (Forrester). The reason behind this unacceptable failure rate is that traditional VOC programs do not possess the same rigor as other business-critical functions, such as finance, supply chain, manufacturing, or sales. Typical VOC programs are survey-focused instead of measurement-focused. Without business discipline, VOC is based largely on guesswork leading to inconsistencies at best, and false positives that lead to error-prone business decisions at worst. As a result, there is a new CX imperative: run VOC as a strategic, rigorous competency and business discipline that brings certainty to CX improvements. To that end, ForeSee regularly measures the customer experience at the biggest apparel and accessories retailers in the U.S. By applying a precise, rigorous, and multi-patented methodology to the discipline, we give apparel and accessories retailers a reliable benchmark against which to measure their success. 2 CUSTOMERS EXPERIENCE WITH APPAREL

3 CUSTOMER EXPERIENCE WITH APPAREL & ACCESSORIES RETAILERS: THE FXI 2015 SCORES Average customer experience scores for the apparel and accessories category is high (79 on the study s 100-point scale), with scores for individual retailers ranging from a high of 82 from Nordstrom to a low of 77 from Urban Outfitters. Some in this category are competing against one another for the same business, but all are competing with the pacesetter Amazon (86) in the mass merchant category, because Amazon sets the bar for a good web experience. Figure 1: APPAREL/ACCESSORIES Point Change Since 2014 Point Change Since Beginning Aggregate Nordstrom nm L.L.Bean Ralph Lauren nm nm nm nm nm nm nm Victoria's Secret nm nm nm Abercrombie & Fitch nm nm nm nm nm nm nm Fanatics nm nm nm nm nm nm nm Foot Locker nm nm nm nm nm nm nm Gap nm Macy's nm Belk nm nm nm nm nm nm nm nm nm nm 79 nm nm Land's End nm nm nm nm nm nm nm nm nm nm 79 nm nm Neiman Marcus nm nm nm nm nm nm nm Ann Taylor nm nm nm nm nm nm nm Express nm nm nm nm nm nm nm nm J.Crew nm nm nm nm nm nm nm Urban Outfitters nm nm nm nm nm nm nm nm = not measured Any retailer falling below a score of 80 risks a loss of loyalty, recommendations, and sales among both current and new customers. Executives should take note: begin having conversations with others across the company to figure out why they are trailing the leaders. It starts with using a robust system of metrics that measures all aspects of the customer experience, including drivers and outcomes. 3 CUSTOMERS EXPERIENCE WITH APPAREL

4 WHY CUSTOMER EXPERIENCE MATTERS TO APPAREL AND ACCESSORIES RETAILERS With a systematic, proven methodology, measuring the customer experience (as opposed to just collecting survey responses about it) can help executives prioritize business decisions as well as predict and influence success. CX is the most important metric retailers can track because it is a key driver of the outcomes businesses care about most: likelihood to purchase online, offline, recommend, and be loyal to the brand. ForeSee measures the following future behaviors by asking customers questions about their intentions, and analyzing answers within the framework of our econometric model: Brand confidence: how confident are you when buying products from this company overall? In-channel purchase: how likely are you to purchase from the retailer again online? Other-channel purchase: how likely are you to purchase from the retailer through other channels like store, phone, mobile, catalog, etc.? Purchase next time: how likely are you to buy from the retailer again the next time you purchase similar merchandise? Recommend company: how likely are you to recommend the company to someone else? Return: how likely are you to return to the website again in the future? In this report, a subset of the ForeSee Experience Index (FXI), we compared less-satisfied users of apparel and accessories websites (with CX scores of 69 or less) with highly satisfied users (CX scores of 80 and higher). This approach quantifies the value of a good customer experience. When compared to less satisfied site visitors, highly satisfied visitors to an apparel or accessories website say they are: 52% more likely to have confidence in the brand 54% more likely to purchase on the website 56% more likely to purchase from another channel (like mobile, store, or catalog) 58% more likely to purchase again the next time they purchase similar merchandise 57% more likely to recommend the company overall 52% more likely to return to the website 4 CUSTOMERS EXPERIENCE WITH APPAREL

5 HOW ACCESSORIES AND APPAREL RETAILERS CAN IMPROVE CX The FXI measures four key levers of the retail customer experience: Merchandise: the appeal, variety, and availability of products on the website Navigation: ease of navigation, consistency of layout Price: price competitiveness, product value, and product quality for the price Product descriptions: clarity of descriptions, quality of images, etc. The results of these measures tell us how customers feel about these areas, and how each element influences customers overall experience with the website. Improving the highest-impact elements leads to quantifiable increases in the FXI score, which translates to increases in sales, loyalty, and recommendations as demonstrated by the likely future behaviors reported in the previous section. Figure 2: 2015 FXI APPAREL AND ACCESSORIES: SCORE AND MODEL Levers of Customer Experience SCOre impact 81 Merchandise Navigation Price Product Descriptions 0.8 Which levers should I pull? Customer Experience Patented FXI Score Where am I right now? impact Outcomes of Customer Experience SCORE 4.3 Brand Confidence In-Channel Purchase Other-Channel Purchase Purchase Next Time Recommend Company Return 81 What outcome does it impact? The levers, or changes to a particular element, that will have the most impact on the customer experience (and, therefore, future behaviors) differ for specific brands. However, we can share overall findings for the apparel and accessories category of retailers. On average, the top priority element for this category of retailers is price. This is a new finding usually we find that price is a relatively low-priority element. This change demonstrates exactly why each individual retailer needs to understand its own priorities in relation to its VOC initiatives. 5 CUSTOMERS EXPERIENCE WITH APPAREL

6 CONCLUSION ForeSee s approach is to measure the overall customer experience for retailers in the apparel and accessories category, which will lead to increases in revenue and confidence in the brand. To do this, retailers in this category need to be aware of how changing specific elements of their websites will impact their customers experiences, either positively or negatively. Only by approaching VOC with the same rigor used for disciplines like finance or operations will business leaders be able to make decisions that can generate the greatest return on their investment. This is an invaluable insight in our technological era. In the hyper-fast world of e-commerce, customers will be loyal to websites that meet and exceed their needs and expectations. Only by approaching VOC with the same rigor used for disciplines like finance or operations will business leaders be able to make decisions that can generate the greatest return on their investment. 6 CUSTOMERS EXPERIENCE WITH APPAREL

7 ABOUT THE FORESEE EXPERIENCE INDEX (FXI): 2015 RETAIL STUDY Since 2005, ForeSee has produced the ForeSee Experience Index (FXI): Retail Edition, a study that quantifies holiday shopper satisfaction with the digital and brick-and-mortar experiences provided by top retailers in the U.S. and U.K. While there are many sources that offer metrics related to holiday sales or traffic, our objective is to provide scientifically-sourced insights that illuminate the why behind those numbers. And who better to explain why they purchase (or don t) than the consumers themselves? ForeSee s retail clients of all sizes leverage our unique methodology to continuously measure customer experiences across their web, mobile and store channels. ForeSee not only helps them know how well they are meeting customer expectations today, we utilize predictive analytics to identify which elements of the experience need improvement in order to drive future revenue and loyalty. The FXI takes that same renowned analytical methodology and for the eleventh straight year applies it to a panel of holiday season shoppers who browsed or purchased in web, mobile and store channels. The result is a series of scores on a 100-point scale with accompanying analysis that retailers can use to compare themselves to competitors, measure changes in satisfaction levels over time, and predict future revenue and loyalty. The FXI: 2015 Retail Edition was fielded from November 6 to December 1, 2015 and collected customer experience data from over 40,000 survey responses. We determined which retailers to include based on revenue and other factors. 7 CUSTOMERS EXPERIENCE WITH APPAREL

8 ABOUT THE AUTHOR, RESEARCH TEAM, & FORESEE AUTHOR Eric Feinberg Eric drives ForeSee s marketing strategy to infuse innovation and operational excellence into the company s offerings. Since joining ForeSee in 2004, he has contributed to the organization s strategic growth, particularly providing leadership around mobile solutions. He is the author of several of the company s thought leadership studies, including the 11th annual ForeSee Experience Index (FXI) and the American Employee Study. He is a frequent speaker on customer experience analytics and marketing best practices. Eric is a board member of the Digital Analytics Association (DAA) and an adjunct professor of mobile marketing at the University of California, Irvine Extension. He is a graduate of the University of Michigan. RESEARCH Joyce Davis Research analyst Joyce Davis has over 5 years of years of experience in marketing and customer satisfaction research. As a ForeSee analyst, she works extensively with customer satisfaction data in order to deliver actionable insights to companies hoping to improve their customer experience across all channels. Joyce earned her B.A. in Sociology from Metropolitan State University of Denver and her M.A. in Survey Research from the University of Connecticut. FORESEE Founded in 2001, ForeSee is the pioneering leader in Voice of Customer (VOC) solutions. Armed with the ForeSee CX Suite, more than 2,000 companies worldwide in retail, government, financial services, healthcare, consumer packaged goods, and other industries have transformed their VOC programs into a strategic and rigorous business discipline that delivers economic impact. Only ForeSee offers a multi-patented algorithmic approach to customer experience measurement, access to an unmatched 175 million benchmarked experiences, and actionable insights from a team of 200 expert analysts that give certainty to CX improvements. A subsidiary of Answers Corporation, ForeSee is headquartered in Ann Arbor, MI and has offices in New York, San Francisco, Mountain View, St. Louis, Cleveland, Vancouver, and London. FS CUSTOMERS EXPERIENCE WITH APPAREL