The Changing Face of Retail: Moving to a truly Digital World Part 2 – Customer Experience

Following on from my last article on the challenges faced in core business operations; this week I explore the world of Customer Experience and how retailers are using technology & digital products to stay ahead of the competition.

The Customer Journey:

All Retailers, FMCG, Logistics & Supply Chain business leaders will have realised that their customer journey will have changed dramatically in the past 3 months. Survival will require the entire business embracing a digital culture: pivoting as much of the business towards an online world, which supplements a bricks & mortar presence is critical.

Although stores will re-open on June 15th, retailers who traditionally rely on heavy footfall for revenues will still feel the pinch. The good news is that logistically, it will make fulfilment easier to complete with click & collect becoming available again, taking the strain off delivering products to home.

“So, What are the issues surrounding the customer journey?”

Safety

Data & Customer Engagement

Speed of Innovation

With safety being the number 1 concern for both customers & colleagues, the industry has to think innovatively on how to keep welfare their top priority. Aldi, for example, is implementing an impressive automated traffic light system to control the number of customers going in and out of its stores. This will be set up at the entrances, working together with the queueing system: the light turns green when there is enough space inside for customers to enter.

Rather than physical changing rooms, fashion retailers have the opportunity to invest in Augmented Reality products, like this AR Mirror Oak Mirror from Oak Labs, that can allow customers to try on clothes, without needed to physically touch them. A dedicated staff member can use the screen, ensuring that there is no cross over contamination from other customers.

Furthermore, with the drive to moving away from cash, using a digital wallet like Apple Pay, Google Pay etc, will allow you to buy goods with no upper limits on spending (within reason) and having a seamless integration with your online platforms can allow you to purchase goods at the click of a button on your phone (PayPal).

Some retailers have already trained their shop assistants to be trained on taking payments using a portable EPOS device, which helps with keeping time spent in the shop to a minimum. Negating the need for long ques at a main check in desk.

For small and large retailers alike, innovation and a forward-thinking approach will play a big part in their ability to thrive and maintain consumer confidence in a digitally altered landscape. We caught up with Kevin Parker, who specialises in helping organisations with their reset plans and turning them into action.

“Building feature-laden capability only adds to the complexity of systems and process and is why some retailers could not respond quickly when needed.

We need to deliver more, at greater pace and as a whole we have to streamline our delivery process, we also need to streamline the operational process into which we are delivering change on a continuous basis.

There are whole sectors of society who cannot receive home delivery, or those who did pre lockdown and this was reduced or removed as grocers concentrated on the priority vulnerable and shielded customers. Many of these are still shielding or self-isolating, so the demand will still remain for home delivery.

Fashion retailers are first and foremost occupied with a supply chain full of the wrong product for the time of year, so this needs to be cleared to create capacity for new stock, and do we really need as much gear when we aren't going out? Lockdown has caused many consumers to evaluate what they want versus what they need, consider the planet, and others, and who knows where this will land in terms of new models of demand.”

The previous retail trend for keeping customers in store for as long as possible will have to be curbed (for now), and the habit of browsing will need to be re-imagined. Whether it is rolling our mobile checkout capabilities or facilitating click and collection services, the focus will be on getting customers in and out as fast as possible – an altered form of convenience that could translate into long-term loyalty.

Data & Customer Interaction:

Data is going to be at the heart of your CX strategy, with a move to a digital business you can build up a clear picture of each individual customers behaviours off the back of insights generated off each touchpoint

From understanding their browsing habits across physical and digital channels, to seeing their previous purchases (both instore & online), their interaction with social media channels, finally allowing you to create a detailed consumer profile which finishes with a unique shopping experience for said customer.

With customer interaction & engagement absolutely essential for retailers to stay ahead of the competition, we have spoken to the following Industry experts for their thoughts & insight into the challenges on show:

• Mercedes Lobato - Ex Chief Digital Officer @ Clarkes,
• Simon Kaffel - Chief Data Officer @ Arcadia,

What is the biggest challenge you see with data & customer engagement and what solutions would you recommend?       

Mercedes: “The biggest challenge I see is the legacy landscape of today’s data warehouses, with systems that have been designed in silos. When the need to understand customer engagement happens across channel, organisation and systems as a collective.

A customer journey framework is essential. What retailers should consider is starting by redesigning their customer experience journey, clearly addressing the new value proposition and ways of interacting with your customers and addressing their needs. Identify in those journeys, the moments of truth that you should focus on, and then map towards your internal process and systems, what activities and data are supporting those critical moments.

This will help companies to focus on the most important activities, create a common understanding cross organisation and address, with micro-services, solutions to support your customers with the right data and service.

Start following those insights will help you to prioritise investments and focus your organisation. Just having a role looking after your customers’ engagement is not sufficient, the customer journey framework is a cross functional governance model.”

Simon: “Speaking with colleagues across the data industry, there remains a number of challenges that the data industry still needs to overcome. Internally businesses still struggle to realise the value of their data assets, often data spend is cut especially in times such as these, when a well-run data function should be providing the insight to both navigate through challenging decisions and in directing the business forward in the future.

On the flip side, some companies are hiring data literate and hungry business professionals that ‘get it’; however, their focus on commercial benefits overtake the need for successful data governance and control. 

Data Governance is increasingly coming to the fore as businesses realise that data quality and understanding negate inaccurate and often wrong decisions. “ 

Simon: Regarding the use of data driving customer engagement, the customer rightly remains wary of their data being mis-used. It is vital that all organisations use data in a commercial, legal and ethical manner that nurtures trust and enhances the value exchange where the customer understands the ‘what’s in it for me’, so is open to feeding more data into the machine. From a Solution Perspective, For me at the moment, I am looking to put data at the end users’ fingertips. My stakeholders need to be able to self-serve”

How can you see the use of data playing a key part in interacting & engaging with your customers?

Mercedes: “We all know that what is not measured will not happen. Data helps to navigate the critical areas of your business and keep you focus towards targets. I like to follow OKR (Objectives & Key Results) methodology and make sure that the organisation keeps focus on understanding the performance of your customer interactions and engagement.

I believe that always the starting point should be the customer not your internal process or products.”

Simon: “Data plays a significant part in a number of roles with customers, from enhancing the relationship through more engaging and relevant communications at the right time to the right people, to improving the customer experience through better understanding the customer journey. But most importantly data will drive more proactive actions/ operations and supply chain that will ensure the right products are designed and appropriate stock is maintained, displayed and distributed”

 What excites you most about the power of data & the levels it can take your CX to?

Simon: “So much data is being generated with every digital action customers and businesses take. What excites me is the progression in technology that enables this data to be processed by intelligent software solutions that are able to dive deeper into the data than we have been able to before. Where AI and Machine Learning are able to make real time decisions on structured and unstructured data to inform areas that have not been looked at previously is hugely exciting. It is all within our grasp, we just take the leap to exploit it”

Mercedes: Data is the fundament that supports a good customer journey framework. The insights that you can create from the data are the navigation tool that supports prioritization of investments and efforts, keeps your organisation focus and help to move the dial towards better customer engagement.

Speed of Innovation:

What cannot be denied is the current volatility of the retail sector, Innovation is required to just stand still at the moment and we have seen organisations run through some pretty substantial business changes in a matter of weeks, that would usually take 6 months +.

Internal politics, the fear of making a wrong decision & “we’ll do it next quarter” have had to be pushed aside for the long-term benefit of the business. Retail Leaders have really grasped the importance of making a decision & failing fast, with most following a 3-week strategy based on government announcements.

“Cost also plays a significant challenge”, explains Simon, “proving appropriate business cases are always a challenge. Taking the leap of faith to deploy this new technology takes a brave company, but those companies that have taken that leap are reaping the benefits. Many organisations remain entrenched in a mind-set of, what has worked in the past does not need fixing. We need to continue to innovate to utilise the technology available to us”

Expanding on this, we have seen collaborations between competitors, sharing of knowledge and leveraging relationships with platform companies like Deliveroo & Uber to ensure products are delivered to customers in an efficient manner.

Technology is a clear challenge in the speed of innovation and having a cloud-based architecture can allow business to scale innovation rapidly & also cool off the products if business return to BAU-BC (Business as Usual Before COVID)

Mercedes also added: “There are a number of challenges in the retail space which could inhibit innovation, these include, finding it difficult to invest in innovation, where the result is unpredictable, especially in times with restrictions around CAPEX. Furthermore, Innovation usually starts with an MVP and requires some interaction before the product is ready to scale, time pressure is never good when difficult decisions need to be made but is inevitable today.

Finally, Leadership, in organisations that are used to making decisions top down, find it difficult to create the right space for self-organised teams and giving them the right environment for innovation to be successful.

I advise you to think like a start-up

“I advise you to think like a start-up” explains Mercedes “Do not try to solve everything by yourself, open up for collaboration internally as well as externally. Give your teams the challenge, but don’t steer them too much, and involve all your crew… the best ideas often come from the shop floor!”

Innovation is constantly evolving how brands interact with their customers and there will be some investment needed to survive. For big retailers, this investment might prove easier – John Lewis, for example, has recently introduced new virtual services including complimentary one-to-one video appointments with staff members and Q&As with experts via Instagram, to support the needs of customers during lockdown.

Jordan & Vivo are working with a close cohort of associates, who are providing advisory services & “digital capability” health checks for Retail, FMCG, Hospitality, Logistics & Supply Chain organisations. If you feel your digital strategy could do with a health check or are unsure if your business is set up to thrive in a digital world Please Contact Jordan for a confidential discussion