Elevating the Multi-Channel Retail Customer Experience |
Retailers are responding to increased competition by investing in Web, call center and catalog channels to complement existing bricks-and-mortar stores. A primary goal of these efforts is to attract and retain “multi-channel customers,” who often spend three-to-four times more on retail purchases than their single-channel counterparts. The question many retailers now ask is: “How do we coordinate our various channels to create an effective customer experience for multi-channel customers?”
Multi-channel Retail Customers: The Big Spenders
The multi-channel retail customer is one who shops and/or buys from a retailer using the Web, catalogs, call centers and traditional brick-and-mortar stores.
As many retailers recognize, the multi-channel customer is extremely valuable. In fact, one specialty apparel retailer recently found that its multi-channel customers (26 percent of its total customers), represented 57 percent of its annual revenues (see Figure 1).
Retaining Multi-channel Customers: What’s the Secret?
Multi-channel customers expect their experiences to be consistently excellent regardless of the channel. Consider a recent Harris Interactive survey that found 42 percent of consumers who have problems during Web transactions abandon the transaction process and/or move to another site. Additionally, 76 percent of customers who had a bad call center experience “…stopped doing business with the company, cut the amount of business they do with the company or complained to the Better Business Bureau.”
Clearly, the quality of the multi-channel customer experience is a key element in building loyalty within this valuable segment.
The Multi-channel Customer Experience: Key Considerations
The following points are offered for retailers to consider as they approach multi-channel customer experience improvement:
Make the experience relevant to the customer
Most retailers continue to provide a generic, non-specific experience to their customers. We still live in a world where customers’ online search terms return irrelevant products; call center agents sometimes recommend products that the customer already purchased in a store; store employees don’t have visibility into customer transaction history, and so on.
A truly “personalized” experience needs to be relevant to the shopper’s goals and interests. This requires an understanding not only of who the customer is, but also of their behavior and unique attributes, as well as the intent of the activity. Forward thinking retailers are using customer and transaction data, infused with up-to-the-minute customer activity information (e.g., Web browsing history), to identify what the customer wants to do and to help them do it.
Develop a ”voice of the customer”
An understanding of the customer experience needs to come from multiple perspectives. Surveys alone are commonly used to determine customer satisfaction; however, most customers who had a poor experience do not complain – they just spend less or leave altogether (see figure 2).
Understanding the customer’s perspective requires retailers to complement surveys with additional, channel-specific data-gathering. Such tactics include customer interviews or focus groups that can be combined with surveys to create a multi-channel “voice of the customer” (see “Web Site Satisfaction Case Study” given below).
Move beyond the quick fix – think “transformation”
Technology certainly can help improve the customer experience (Web chat, call routing, etc.). Regrettably, retailers often try to implement quick IT “fixes” that have unanticipated, far-reaching implications throughout internal operations.
Retailers need to look beyond IT to develop and/or improve customer experience capabilities. An effective multi-channel customer experience “transformation” will include the customer experience vision, cross-channel customer experience-related operations and organizational support.
Cast a wide net
Even the strongest multi-channel experiences within certain retail sectors may not be exceptional when considered against the broader retail industry. For example, the best online grocery store experience may not compare to the online experience for the best electronics or clothing retailers, for instance.
Of course, as an example, consumer electronics retailers would be remiss without benchmarking against other consumer electronics retailers. A comprehensive benchmarking assessment should include a retailers core competitor compared with retailers known for customer experience excellence even outside of immediate competitors. This should help to develop a robust understanding of the true quality of the customer experience.
Website Satisfaction Case Study
Problem: A billion-dollar apparel retailer recently conducted a Web site satisfaction survey. It received an average score of 8.6 out of 10, which seemed fairly good. However, its competitors received an 8.8 score. This left the retailer unclear as to whether the experience was strong (8.6 would seem strong), or weak (customers believed the experience slightly lagged competitors).
Action: This retailer combined online survey results with call center customer feedback captured by call center agents. Additionally, focus groups were held with multi-channel customers to identify areas of strength and weakness in the experience. The marketing function then combined information from each data source to generate a multi-channel ”voice of the customer.”
Benefits: The voice of the customer gave the retailer a clear sense of the customer’s perception of its Web experience (it became clear that improvement was, indeed, required). This information was then used at the C-suite level as one of four major dimensions by which customer experience-related initiatives were prioritized. The voice of the customer information was instrumental in prioritizing customer experience-related improvement initiatives worth an estimated incremental $200M in revenue.
Back to the Multi-channel Retail Customer…
Multi-channel customers are increasingly the most sophisticated, demanding and timestarved customers; they’re also among the most valuable.
Retailers who recognize today that this fundamental change in the consumer base is here to stay — and act to embrace the challenge of multi-channel shopping experience excellence — are likely to win the loyalty of one of the most profitable retail customer segments in the market today.
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