Three home truths about the connected customer experience

Dan Hartveld, 4th August 2016

Connected customer experience is a hot topic - most retailers agree that it is key to success in a highly-competitive climate which is becoming increasingly driven by technical advances.

This article originally appeared on MyCustomer.

Connected customer experience is a hot topic - most retailers agree that it is key to success in a highly-competitive climate which is becoming increasingly driven by technical advances.

So why haven’t more big-name businesses taken the plunge when it comes to connected retail? Here are some home truths for those who have yet to face the future.

Home truth 1 – it’s time to wake up to what ROI really means

One of the most frequent objections to making an investment in a connected customer experience is the misconception that measuring ROI is difficult. However, now that business analysts are waking up to the importance of offering something more than the bare minimum to customers, evidence is beginning to stack up in support of committing both cash and resource to developing a superior customer experience, enabled by technology.

Research by management consultants McKinsey and MIT shows that retailers who use big data and analytics to provide a relevant and personalised customer service outperform their peers by 5% in productivity and 6% in profitability. In our own experience, retailers who implement a connected store experience see uplift of 3-6% on top line store sales. 

Forrester’s Customer Experience Index puts a cash figure on it, suggesting that taking steps to offer a better than average customer experience results in an increase in revenue of more than £130 million for the retail industry.

And customers themselves are saying it loud and clear – according to global customer management company SDL, 60% of shoppers aged 18-36 across the US, Germany, Norway, Australia and the UK ‘expect a consistent experience whether online, in-store or on the phone’ and ‘expect to engage with a company whenever they choose and via whatever channel they select. [They] don't pay heed to where they are or what device they are using when interacting with a brand…’

In short, traditional methods for measuring ROI don’t necessarily work on their own any more – it’s time to redefine the parameters to take the ‘people’ part of retail into account, which leads to home truth number 2.

Home truth 2 – don’t underestimate the importance of your staff

Connected retail relies on joined-up knowledge and staff empowerment. Retailers need to make use of their most valuable asset – one which they can immediately take steps to deploy to maximise customer experience.

Equipping staff with technology which delivers the same kind of information, knowledge and sense of brand connection as retailers afford their customers will have a profound and rapid effect, not only on customer experience but also on sales, operational efficiency and employee satisfaction.

Home truth 3 – those technical barriers that you’re worrying about aren’t really barriers at all

While proving ROI goes a long way to overcoming board-level fears, there will undoubtedly be a number of other perceived barriers on the path to adopting potentially disruptive technology. However, if you apply the desire to give customers what they want, to stay ahead of the competition and have a positive impact on profits and combine it with sound business logic, these barriers tend to become far less significant and much easier to conquer:

Barrier: multi-stakeholder projects involving established systems can strike fear into the hearts of retailers – they believe they will be big, slow and expensive. Some retailers may think the risk to existing operations is too high.

Solution: the key is to break the project down into manageable chunks with swift results. It’s possible to run quick pilots of small initiatives - modern software has a small minimum viable product, with agile development and fast speed to market. Retailers and their technology partners have the ability to choose a product which is simple to develop, pilot it to show business benefit, then use it to prove the case for building further developments.

Barrier: legacy systems in retail can be ‘locked in’ – closed by design. The perception is that it’s not possible to get data in or out, and businesses tend to think there’s too much risk even in simply building a new silo, let alone opening up and integrating/converging data across departments.

Solution: the way modern technology operates means there is always a way to integrate, as long as it’s logical. It’s time to move on from the ‘computer says no’ mindset by providing an obvious customer journey via a new ‘quick win’ platform, using middleware to bridge the gap between legacy systems and end data user.

Barrier: the perception that this kind of upgrade in customer experience is not necessary – some retailers are happy with their business silos and ‘swimlanes’ for channel management.

Solution: when retailers bury their heads in the sand, it tends not to work out well for them. A number of big-name businesses (Blockbuster, Zavvi, Woolworths and others) fundamentally misunderstood how to maintain a high street presence in an online/ecommerce age – their stores don’t exist any more. It’s a case of acknowledging the fundamental need for a mobile-first, cross-channel, joined-up customer experience, because your competitors already have.

Sometimes all it takes is a common-sense, fact-based approach to enable people to take the leap of faith necessary to do something which will truly revolutionise their method of working.  This has never been more true than in the adoption of technology to connect business silos – the idea that ‘crossing the streams’ of data within a business will lead to disaster is clearly outdated, and we have the facts to prove it. Once businesses open their minds – and their data systems – to a joined-up, cross-department approach which both empowers sales staff and improves sales, they will be able to deliver a truly connected experience which will increase sales, satisfaction and customer loyalty.