April 16, 2018
Four ways retail businesses can improve the customer experience to thrive in the age of instant gratification.
Shopping. It’s everywhere. We shop for groceries and other goods, if not daily, at least weekly. To compete, retailers must be focused on providing the best customer experience.
Yet PwC’s Experience is everything survey found that only 49 percent of US consumers say retail companies provide a good customer experience today. That’s not nearly good enough to compete against the retail giants that experts say set the standard for customer experience today. Amazon, Apple, Zappos, Nordstrom, and Warby Parker, for example, all prioritize providing the best possible customer experience and have reaped the rewards.
To find out what retail companies can do to improve the customer experience, we talked to Theodora Lau, founder of Unconventional Ventures and former director of Market Innovation at AARP, and Annette Franz, CEO of CX Journey Inc., a customer experience strategy consulting firm. Lau and Franz have dedicated their professional lives to helping retail businesses understand the importance of the customer experience and taking steps to improve it.
There are four key ways Lau and Franz believe retail companies can improve the customer experience; they’re all related but aren’t likely to succeed on their own. Technology, for instance, can’t fix everything. But it can help companies create extraordinary customer experiences and achieve greater commercial success: 82 percent of the top-performing companies in PwC’s 2017 Digital IQ survey reported paying close attention to the human experience around digital and technology.
1. Get to know your customers—really know them
How well do you know your customers? Franz says retailers need to get to know their customers’ needs and preferences. Franz uses journey mapping with her clients, which she describes as a good way “to walk in your customers’ shoes” and get a crystal-clear view into their experience with the company.
“You’ve got to understand customers, their needs, their pain points, and the problems they’re trying to solve before you can design their experience.” says Franz.
Lau agrees, adding that when companies make it clear they don’t understand customers’ needs, they chip away at their chance to score customer experience points. We’ve all had the experience of a bank sending us repeated offers for various credit cards—even though we already have a card from that bank.
PwC’s Consumer Intelligence Series survey on customer experience found that 73 percent of consumers point to customer experience as an important factor in their purchasing decisions, just behind price and product quality. But if you don’t know your customers or haven’t taken the time to walk in their shoes, how can you improve their experience?
Franz says companies must also actively listen to customers using methods such as surveys, social media, and customer advisory boards. Rather than customer segmentation, Franz also recommends that companies use customer personas as the starting point for journey mapping. Instead of looking at men aged 18 to 34, which is a segment or target demographic, you might look at men who have a similar problem they want to solve or a common motivation for visiting a particular retailer. For her part, Lau recommends moving away from a fixation on generational differences to focus instead on how to give all of your customers a fantastic experience. “I don’t think designing for a particular generation is relevant anymore,” Lau says, “I advocate more for a more inclusive approach to customer experience design.”
If you truly know your customers’ needs and problems they are trying to solve, you can make changes that will deliver value and serve customers better in the future. The Experience is everything survey found that nearly 80 percent of American consumers point to speed, convenience, knowledgeable help, and friendly service as the most important elements of a positive customer experience. Are these things important to your customers, too—and if so, are you providing them?
2. Empower employees to better serve customers
Your employees are key in the quest to improve the customer experience. Only 38 percent of US consumers say the employees they interact with understand their needs, while 46 percent of consumers outside the US say the same.
Franz and Lau advise retail companies to reverse this by making organizational changes necessary to make sure you hire the right employees, train them appropriately, empower them, and give them the tools they need to provide a top-notch customer experience. Lau mentions Whole Foods as an example of a company that has made it a priority to ensure its employees can address customer issues and concerns on the spot, regardless of their position. “If something is wrong with a product, they would replace it for you, no questions asked,” Lau says. “So as a consumer you feel okay with paying a premium because you know that your experience is going to be good.”
Franz says companies like Amazon, Zappos, Ritz-Carlton, and Southwest Airlines also strive to exceed customer expectations. In one legendary story about Zappos, CEO Tony Hsieh was so confident in Zappos customer service reps’ training that when he found himself with clients who craved pizza after the hotel’s room service was closed for the night, he told them to call the Zappos customer service line. It was 2 a.m. and the call wasn’t about a Zappos order, but the customer service rep found three pizza restaurants that were still open and able to deliver to the group.
Companies that operate like this successfully reduce friction for consumers and empower employees to go to extra lengths to increase customer satisfaction. “Every employee–from the back office to the frontline—impacts the customer or the customer experience in some way, so we need to make sure they understand what that impact is and give them a clear line of sight to the customer,” she says.
Closing the gap between what consumers expect and what they actually get may be a matter of implementing technology that complements the human element of customer experience. Even if people love your company or product, in the US 59 percent will walk away after several bad experiences, 17% after just one bad experience.
3. Make technology an enabler, not the end goal
Businesses should implement new technologies that facilitate delivering a better customer experience. These technologies are vast and varied. “Retail CIOs have their hands full,” Franz acknowledges. “They will need to work closely with CMOs and/or CCOs as they integrate new technologies with existing platforms,” Franz says, “And they’ll need to ensure they connect customer data across all systems in order to provide that single view of the customer, to personalize the experience, and to deliver a seamless omnichannel experience.”
Franz and Lau also agree more should be done in the area of using customer data to best benefit customers. “The technology and, hence, the experience are going to be powered by data,” says Franz. “You can’t have a conversation about technology without talking about data, how we analyze that data, and how the data makes the technology a better tool, a better enabler or facilitator of the experience.”
4. Build customer trust
When it comes to using customer data, the issue of trust comes into play in a big way. Our survey found that 43 percent of US consumers say they would not give companies permission to collect their personal data (location, age, lifestyle, preferences and purchase history) to allow for more personalized, customized experiences. However, they felt differently in one instance. For a service they say they truly valued, 63 percent said they’d be more open to sharing their data.
All companies are smart to listen to customers when they say they want assurances on data security. In a constantly changing industry like retail, it’s better to listen to what customers want than ignore it. Safeguarding customer data is a better way to guarantee they’ll willingly share it with you: Our survey found that 88 percent of US consumers say that how much they trust a company determines how much they’re willing to share personal information.
“Trust is everything,” says Lau. Ultimately, customers will decide what’s most important. You can take the extra steps to earn your customers’ trust now so they’ll give you what you need to best serve them—and, more importantly, do it better than your competitors.
Additional details in PwC’s consumer research: Experience is everything: Here’s how to get it right. 15,000 consumers in 12 countries revealed what it takes to deliver the kind of experience that keeps them coming back.