The New Frontier of Customer Experience

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1 The New Frontier of Customer Experience Why fantastic in-store experiences matter more than ever and how you can deliver them.

2 The New Frontier of Customer Experience: Why fantastic in-store experiences matter more than ever and how you can deliver them. By Imogen Wethered In such a fast-changing competitive landscape, it has never been harder for brick-and-mortar retailers to compete. Competition has never been fiercer and customers have never had so much choice, or information at their fingertips. The ease and comfort of shopping online, as well as the low prices this can offer, means customers are more demanding and more willing to walk away to a competitor than ever before. When customers come into your stores, they re looking for great service and fantastic experiences. Recent studies show when customers have a bad in-store experience, such as a lengthy wait time in a poorly organised queue, 26 percent will abandon their purchase and leave the store 1 ; and the damage continues after they leave the store. Brick-and-mortar retailers need to unlock the potential of their biggest assets beautiful stores, engaging instore experiences, and enthusiastic staff who have the expertise to make each and every customer feel important

3 The Fall-Out of Negative In-Store Experiences One of the biggest challenges retailers face is that customers are now more than ever, more demanding and impatient. With more options available to them, they are more likely to walk out the door if they have an unsatisfactory experience. To date, queues and wait times have presented an insurmountable challenge to retailers when looking to convert customers in their retail stores. As it stands, even if you provide highly sought after products at a low cost with best-in-class customer service; customers will choose to go elsewhere. This can cause a detrimental impact to the bottom line of the traditional in-store retailer. This impacts retail revenue-generating potential in four critical ways: 2 Qudini independent market research 3 Estimated cost to individual retailers have been calculated using research data combined with an estimated 1,100/month footfall, combined with average spend figures: The cost to retailers in aggregate has been calculated by and multiplying the individual retailer costs by the number of retail outlets in the UK:

4 1 2 10% of UK customers walk out of stores 55% of customers have switched to another company Walkouts...Customers will walk out without service Our research shows that poor in-store experience and long wait times lead to 10% of UK customers walking out of stores 2. That means the average store loses 52,000 every year 3 directly from walkouts and poor in-store experience, with the total cost of walkouts to UK retailers at 15 billion a year and hitting the entire economy hard 26% of customers who walk out of a store will discontinue their purchase completely 4, costing the UK economy 3.4 billion a year. Lost Loyalty...They often won t return After walking out on a retailer, most customers won t return 55% of customers have switched to another company 5 after a poor experience. Causing UK retailers to miss out on 8.1 billion of sales that just one more visit would have brought in x Word of mouth...most will tell their friends According to Zendesk, 54% of customers share bad experiences with more than five people 6. If 60% of those who listen to them visited the retailer in question one more time, this would amount to another 14.7 billion of revenue. Social media...many will share their experience on social media With 317 million monthly active users on Twitter 7 and 1.86 billion monthly active users on Facebook 8, social media can compound the issue of poor customer experience, with a significant impact on revenue, reputation and more. Poor in-store experiences cost retailers 168 billion a year In summary, poor in-store experiences can have a negative impact on customer retention and can lead to negative social media reviews, customer walkouts and propensity to purchase products from competitor stores. To negate this, retailers need to invest in their stores and look at enhancing the customer journey. 4

5 Social Media and the Twitter Effect The popularity of social media channels has grown exponentially over the last decade. With this in mind, customers use them as a crucial touchpoint to engage with retailers on a real-time basis for customer service, with Twitter being the main platform for this. Qudini conducted independent research in September 2016, providing an analysis of the main customer complaint topics on or related to the search term Bad store experience across a sample of 150 tweets on Twitter. The results showed that 36% used social media to share a poor customer service experience, 9 whilst also identifying the top two complaints shared on Twitter: 22.9% 14.3% Rude or inefficient staff at the number one spot with 22.9% Wait times, accounting for 14.3% of complaints, coming a close second This is what we call the Twitter effect; the social media platform amplifies the impact of long queues in stores, creating massive headaches for retailers. If each negative post is seen by 200 people, 30% of whom would otherwise have visited the store in question the lost revenue opportunity for an average store would amount to 451,000 a year billion for UK retailers as a whole. The true costs of long wait times and poor experiences soon start to stack up so what can retailers do about it? 9 5

6 The Transition to Technology; Why Retailers are Investing in Customer Experience Technology in Stores Although 86% of customers now use multiple channels to make a purchase10, 88% of retail transactions are still completed in-store11. It s now more important than ever to create a memorable experience from the moment customers walk in to stores. Customers are looking for more than just products to buy. Only the best retailers can give them unique, engaging, tailored experiences across multiple channels. Better in-store experiences can beat lower online prices With store operating costs high, retailers can t compete with online prices however price isn t the only factor in buying decisions. In fact, 47% of consumers surveyed indicated they are willing to pay a premium for a better customer experience12. Customers are voting with their feet as they shop more online, and for multichannel retailers that means the need for an increasingly focused, curated and engaging brick-and-mortar store experience that creates maximum conversion no matter what channel ultimately records the purchase. PwC Total Retail Global report,

7 Transform In-Store Experiences... The shift from transaction-based to service-based retail has led physical retailers to evolve their store experiences to encourage more customers to complete their purchase journey in-store. Retailers are using innovative technology to deliver outstanding in-store experiences; driving online sales, improving conversions and increasing spend by transforming their brick-and-mortar stores into hubs for exciting brand experiences and service interactions. We re seeing retailers rethink their stores in a variety of ways, for example: Offering additional services and events in-store (including ones that customers can pre-book), therefore creating more opportunities to build lasting relationships with customers Creating more immersive, memorable experiences in store that enable customers to see products in action Using a concierge or host to engage customers and help orchestrate their in-store experience from the moment they walk in 7

8 Transform Business Results Retailers are reimagining their in-store customer experience to help them: What retailers do Why retailers do it Improve immediate in-store sales On average, customers reporting the best in-store experiences spend 140% more than customers reporting a poor experience 14 Drive online sales and conversion and higher spend Customers who engage through multiple channels generate three times the volume of sales and more than twice the margin of store-only customers 15 Build long-term loyalty to support business growth A 5% increase in customer retention produces more than a 25% increase in profit 16 Differentiate from competitors Consumer Intelligence Consultancy, Walker, have estimated that by 2020 customer experience will become the number one differentiator between brands, succeeding both price and product 17 Increase word-ofmouth marketing and brand advocacy 77% of of customers are more likely to buy products recommended to them by family or friends. 18 Through excellent customer experience, word of mouth and social media can be utilized to benefit your business w /gb-en/_acnmedia/pdf-10/accenture-strategy-gcpr-digital-profitabilty.pdf#zoom=

9 Better Experience, Better Revenue The fact is, great customer experiences drive revenue growth. Research has shown that retailers who deliver the best in-store experiences will outperform their competitors by a huge margin. Forrester analysed companies revenue growth over a five-year period. The results speak for themselves. Forrester s customer experience leaders achieved 17% growth. The poorest customer experience performers, on the other hand, grew by just three percent. 17% growth by Forrester s customer experience leaders 9

10 We are Qudini In this retail revolution, we work closely with retailers to transform their in-store experiences to boost sales, streamline operations and create lasting, valuable customer relationships. Our enterprise Customer Experience Management solutions enable you to easily manage and connect with your customers across multiple journeys and channels, all within a single platform, using: Walk-in & Queue Management Multi-Channel Appointment Bookings Click & Collect Management Collection & Repair Management Request Assistance Workshop & Event Bookings 10

11 Rethinking Customer Engagement By thinking about customer journeys as a series of service experiences, rather than a series of financial transactions, and using technology to improve those experiences, forward-thinking retailers are starting to achieve some phenomenal results. 62% 10% reduction in walkouts within O2 UK store conversion increase, as a result of online appointment bookings for one our new enterprise customers 40% satisfaction improvements for House of Fraser Buy and Collect Increased customer browsing and spend whilst customers wait for service for John Lewis It s been fantastic working with Qudini. We found them incredibly agile. They ve been very receptive to our needs, and we re really really comfortable that what we ve got now is absolutely perfect for our stores. Bridget Lea, General Manager, O2 View our case studies online: qudini.com/customers Let s design your customer experience? If you d like to discuss how enhanced in-store experiences could open up new possibilities for your business, get in touch at imogen@qudini.com 11