It's beginning to look a lot like CXmas...

Dan Hartveld, 17th December 2019

As the year draws to a close, CTO Dan Hartveld shares his own kind of Christmas list. Find out which retailers were ‘naughty’ or ‘nice’ when it came to customer experience in 2019.

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This article first appeared on MyCustomer.

As the year draws to a close, it’s time to take a look back at the last 12 months’ hot topics and compile that all-important list – which subjects made it to the ‘nice’ list and which were relegated to the ‘naughty’ list when it comes to customer experience.

On the ‘nice’ list

It hasn’t been a vintage year for retail – the economic challenges have only intensified and uncertainty about the future has without doubt played a part in the reluctance of some retailers to make any big strategic decisions for transforming their customer experience. But there have been a couple of shining examples of why it’s important to take the plunge, especially when times are tough:

Luxury retailers

They know that offering guaranteed VIP treatment from well-informed store associates armed with the right tech to anticipate their customers’ wants and needs is a terrific motivator for an in-store visit. According to consultants Bain, by 2025 around 50% of all luxury purchases will be digitally enabled, and ‘the role of the store will evolve from a simple point of sale to a true touchpoint for consumer engagement.’

What sets luxury retailers apart is their willingness to embrace the use of tech that makes it easy for them to deliver superior service - Burberry, CHANEL and Louis Vuitton regularly make the top ten lists of retailers offering the best tech-enhanced in-store experiences. Over the last year, luxury brands that have gone ahead with everything from concept stores to hyper-personal service, and the latest in-store innovations have helped to fuel the industry’s overall growth of around 5%.

Beauty retailers

GlobalData predicts that health and beauty will be the fastest growing industry sector over the next five years, with the UK market alone reaching £26.7bn by 2022. Harrods and Boots have led the way this year with their all-new beauty halls, providing in-store experiences where each consultant and store associate has the right digital tools to deliver a truly personalised, one-to-one service with every customer’s details at their fingertips.

From consultation-based services with individual conversations based on customer preferences to tailored inspirational content and tutorials, digitally-enabled beauty advisors are in an ideal position to deliver the kind of experience that will ensure customers keep coming back to the store.

Retailers who offer flexible fulfilment

Retailers who see their physical retail space as an asset are taking steps to make every square foot of their real estate work for them as a revenue generator rather than a drain on capital. From making sure each store, each store associate and each customer is able to see, order and receive goods from any business channel and have those purchases attributed correctly to teaming up with other retailers and established logistics operations to ensure same-day delivery, they’re able to meet customers’ increasing demands for flexible fulfilment options.

On the ‘naughty’ list

Some retailers have decided that, right now, doing nothing is better than making the wrong strategic choice. But the result of inaction isn’t preservation – it’s more likely to be the destruction of an already fragile business:

C-suite inertia

According to analysts Everest Group, only 10% of the C-suite are ready to take action and make digital transformation happen. There’s a fundamental fear that setting the digital store ball rolling will take out a number of existing structures on its way through the business.

Tackling this issue depends on shifting business focus from cost to value. Rather than weighing up the expense of implementing a digital store strategy – traditionally a stumbling block for the C-suite – it’s vital to assess the value of transformation across all business areas.

And speeding up the internal change process is essential for survival – given that the life span for tech is now around five years, you can’t make any kind of progress when relatively small initiatives take 12-24 months to agree, plan and implement. Taking this long over the planning stages means that it’s likely that that the situation has changed by the time the implementation phase is ready to begin, resulting in a never-ending cycle of replanning. This is especially symptomatic of retailers who have not adopted an agile approach to technology change.

Retailers who don’t get their back-office processes right

Good customer experience depends on good operations. Click and collect is a great example of a process which some retailers have neglected, to their cost. Research carried out by global analysts IHL showed that, despite most retailers offering the service and its evident popularity with customers, they are still experiencing operational issues when it comes to picking up purchases in-store:

  • 18% said their order wasn’t ready when they arrived to pick it up
  • 18% said there was no employee available to help them
  • 12% said that the pickup area was hidden at the back of the store, with no signage to direct them

And the problem will intensify over busy periods – if retailers’ systems can’t cope with click and collect orders on a daily basis, they certainly won’t be able to meet customer demands over the Christmas period. They also won’t be able to take advantage of the opportunity to cross-sell and upsell – there’s evidence to suggest that click and collect customers spend up to 69% more in-store when they come to collect their purchases, if the experience is right.

A happy new year?

Retailers who want to secure a place on the ‘nice’ list this time next year need to get started as soon as possible in 2020. There’s no better time to take action – the start of a new decade should signal the start of a new strategy encompassing both employee and customer experience, with comprehensive back-office support.