Creating a Frictionless Customer Experience

Transcription

1 e BOOK Creating a Frictionless Customer Experience WHY RETAILERS AND BRANDS MUST GO BEYOND OMNICHANNEL SPONSORED BY

2 Omnichannel isn t Enough Somehow omnichannel has come to be the de-facto shorthand for the consumer s greatest good. Yet, in describing the internal transformation retailers and consumer goods manufacturers must go through, it stops short of conveying a true consumer benefit or value. Consumers don t think in terms of channels. They simply shop. Consumers value speed, simplicity, quick responses to questions and reliable delivery, rather than worrying about whether they shop online or in-store. The ability to shop anytime-anywhere, order online and pick-up in-store, receive orders fulfilled from local stores, have a universal cart that travels with the consumer across channels and other capabilities that together represent omnichannel will soon be table stakes. Retailers and manufacturers must guard against a me-too approach to omnichannel. In fact, blindly adopting omnichannel capabilities can lead to margin hemorrhage. They must instead focus on defining the ideal shopping experience for their customer demographic, brand value and business model, and then ensure that their business processes and technology systems are optimized to deliver that experience consistently and seamlessly wherever and however the consumer chooses to engage. 86 % of consumers will pay up to 25% more for a better customer experience 80 % of companies say they deliver superior customer experience. 8% of their customers think the same. 1 The Annual Customer Experience Impact (CEI) Report 2 Lee Resources

3 Commerce and Engagement are Converging The line between engagement and commerce is blurring. WeChat s 550 million monthly active users can find their favorite retailer, talk to a local store associate and buy merchandise all within the chat application. Pinterest, Instagram, Twitter and other social networking platforms have either launched or announced buy buttons that allow customers to shop within the social media experience. Digital interactions influence 64% of store sales 3 With ubiquitous mobility, consumers are adept at navigating multiple channels, devices and apps seamlessly. Today is focused on mobility, social media and the web. Tomorrow may bring wearables and connected devices. The fact is, the consumer is the only channel. Retailers and manufacturers have spent decades perfecting the art of building products that move efficiently through the supply chain to be bought at an end-point controlled by them (stores, catalog, ecommerce, direct-to-consumer). As consumers increasingly push them outside their four walls and into unfamiliar territory 3rd party apps, social networks, over-the-top messaging services, last-mile delivery services, and subscription-based services this organizational fabric of culture, processes and systems is put under severe duress. Social media increased its share of ecommerce referrals 200% 4 3 Deloitte, Navigating the Digital Divide 4 Internet Retailer, Q Social Media 500

4 Friction Equals Abandonment, Loss of Loyalty and Diluted Brand Experience The break points of this duress lead to friction in the customer experience. Friction refers to customer experience failures that cause customer dissatisfaction and create incentive for consumers to abandon engagement. Customer experience is defined as the sum total of conscious events, as as a coordinated series of interactions between a customer and a brand to accomplish anything. Above all words a customer experience is defined by the customer, for the customer, at each touch-point, each time. ESTEBAN KOLSKY Retailers and manufacturers face a tough dichotomy: Conditioned by rich digital experiences, consumers have increasingly low tolerance for customer experience failures. And, it is easier than ever for consumers to abandon engagement at the slightest friction. The impact is far-reaching. THE IMPACT OF FRICTION IN THE CUSTOMER EXPERIENCE Online Cart Abandonment: The average online cart abandonment rate is 68% 5 Store Trip Abandonment: 78% of consumers have bailed on a transaction or not made an intended purchase because of poor customer experience 6 Bad News Travels Quicker: News of bad customer service reaches twice as many ears as praise of good service 7 Losing a Customer is Expensive: Customer acquisition costs 6-7 times more than customer retention 8 Loss of Customer Lifetime Value: Companies can expect to lose 65% of a customer s share of wallet the year after a customer experience failure 9 5 Baynard Institute; 6 American Express; 7 White House Office of Consumer Affairs; 8 White House Office of Consumer Affairs; 9 SDL

5 Causes of Friction in the Customer Experience DEPARTURE FROM THE EXPECTED PROCESS INEFFICIENCY UNRESPONSIVE TECHNOLOGY LOW EQ HUMAN TOUCH DESCRIPTIONS Consumers have come to expect some things to just be. Any deviation is cause for a pause. Inefficient processes break down the promise of a seamless experience and cause the exact opposite effect. Consumers interface with more enterprise technology today than ever before. Slow isn t an option. Store and customer service associates are brand ambassadors. When they fail, the experience fails. POINTS OF FRICTION UI/UX issues, lack of free shipping, not accepting a preferred payment option, frustrating packaging Order inaccuracy, wait times at store pick-up Slow POS terminals, unresponsive digital displays, slow WiFi, high application load times Procedural customer service, lack of in-store customer profile, unidirectional social media strategy IRRELEVANCE Marketing, offers and promotions that are not personalized transfer the burden of finding relevance on to the consumer. Lack of experience personalization, security or privacy breaches, lack of product recommendations UNFULFILLED DEMAND The inability to convert purchase intent directly results in lost sales. Out of stocks, lack of total inventory visibility, limited fulfillment options, long checkout lanes

6 Removing Friction from the Customer Experience Retailers and brands must go beyond the traditional definition of omnichannel, and excel at key aspects of their customer experience to ensure a frictionless experience. EKN and IBM conducted a global survey of 300 retailers and brands to understand each industry s maturity across the key elements of a frictionless customer experience. The findings from the research combined with insights from qualitative interviews with retail and consumer goods executives are available as prescriptive Industry Playbooks. Each Playbook delves into details of each of the 4 pillars of a frictionless experience, including identifying key organizational and technology enablers. RETAIL PLAYBOOK BRANDS PLAYBOOK Commerce & Payments Personalization Flexible Fulfillment Customer Service Product Innovation Retail Execution Supply Chain Flexibility Marketing & Promotions To request a copy of the Frictionless Customer Experience Playbook for Retailers or Brands, contact us or tweet us Research

7 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