Aligning Retail Digital Transformation to the Customer

Digital Warp Speed

According to research from the US Department of Commerce, Bank of America and ShawSpring Research, the ecommerce penetration rate (ecommerce as a percent of total retail sales) in the US rose from 16% in 2019 to 27% by the end of Q2 2020. The growth rate of Q2 was 44.5% compared to the same period in 2019 which is triple the typical average growth rate of the prior four quarters hovering around 15% during that period. This all means we’re getting close to nearly one third of all retail spending in the US being completed online. Most experts agree that this rate will continue to grow so if your organization is in Retail or Digital Commerce or interacts with these organizations, things have changed dramatically. So, armed with this information what are the key considerations I must be thinking about?

Double Down on the Customer Experience

Most of us in technology believe that we understand the importance of the Customer Experience. In the “State of the Connected Customer” from Salesforce it is reported that “84% of customers say the experience a company provides is as important as its products or services” and “73% of customers say one extraordinary experience raises their expectations of other companies.” Considering this impact together with this enormous growth in ecommerce penetration, we need to accelerate our efforts to ensure we are providing our customers with the best possible experience. We like to use many words to describe the ideal Customer Experience: extraordinary, intuitive, usable, and frictionless. But here are some other adjectives you should examine when evaluating how your customers interact with your products and services:

• The Integrated Experience – Many customers not only start and complete transactions across multiple devices, they also might bring the physical store into the mix. Even when shopping in brick and mortar locations, shoppers are using their smart phones to gather product information and comparison shop. A disconnected experience can be very frustrating. Digital services should enhance the physical experience and create an integrated, wholistic experience when applicable. And does your digital store bring your customers the same experience they would get at the physical store. Too many times we think of the digital and physical experience as two completely separate alternatives.
• The Personalized Experience – Consumers want tailored experiences that adjust in real-time to meet their shopping needs and preferences through product recommendations, custom search results, and personalized content. I’m not just talking about A/B testing through 17 shades of green to find the best response to an ad placement. This means stitching together a unique combination of services to build a custom experience or journey for an individual user. Of course, you’ll need the right technical architecture to support this goal. Customers want more than just the right look and feel, they want a truly customized set of features and options for interactions such as voice commerce that meet their specific needs and ways of doing things.
• The Data-Driven Experience – From the Social Networks to Internet of Things, nearly every noun on our planet – person, place, thing or idea – is continuously generating data. Our ability to capture this data has grown to keep pace with this explosion of both person and machine-generated data. But the vast majority of this data goes unanalyzed. In “The State of Dark Data” from Splunk, it is estimated that an average of 55% of all data in an organization goes unused for various reasons. This cannot be the case for the Customer Experience. Data must fuel analytics and machine learning to drive constant improvement. Data is the communication between person and machine and is critical to a common understanding between these two entities.
• The Smart Experience – AI has gone mainstream and has become an integral part of the online shopping experience. I’ve already discussed many topics where AI is crucial such as personalization and other AI implementations like chatbots have become commonplace. But we should be thinking about more sophisticated and creative applications of AI. Bots can function as product advisors or personal shopping assistants. Natural Language Processing can provide a quick and easy way for customers to order products via a smart speaker or voice-enabled application. Algorithms can listen to understand customer sentiment and make recommendations or take actions in real-time. We’re only just beginning, but with today’s abundance of data and the availability of inexpensive computing resources, we should build a machine learning capability into virtually all digital products and services.
• The Trusted Experience – A Cybersecurity breach can have huge financial and regulatory consequences, but it can also have a huge impact on the reputation of a company. And if you personalize that to the individual Customer, it equates to a loss of trust. Warren Buffet once said that, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” Customers are not only concerned about security and privacy, but also the way that companies use their data. Most of us have no clue how our data is being used and we’d have to be legal experts to truly understand most privacy policies or regulations. Trust builds loyalty and this means letting customers know their data is being secured, kept private, and used to benefit them.
• The Interactive Experience – When customers are shopping online, they lose their ability to physically experience and interact with a product. Digital shoppers want to close this gap between virtual and physical with a more immersive experience of your products and services online. Retail organizations must create platforms with 3D video and augmented and virtual reality to help overcome some of these barriers. Customers will be able to visit your store and interact with your products in new ways that can create incredibly engaging experiences and evoke emotional responses. Place furniture in your home, try on clothes, or shop together with friends. The intersection of Customer Experience with new tools and technologies such as AI, Big Data, Cloud Platforms, and 5G Networks will enable endless possibilities for immersion.

You may be undergoing a Digital Transformation or creating new and enhanced digital products or services, but I hope you’ll think about these adjectives and their applicability to your Customer Experience.