In recent years, most executives in the retail sector have stated that, it is time to place the customer at the center of all the actions theytake. It’s a common goal of all organizations, and while many brands have invested in what they thought was going to deliver an amazing consumer experience, their efforts haven’t always been right.
In an era of growing consumer expectations, technological innovation, and industry mega-disruption, everyone agrees that it’s time to dig deeper and find out what really works, while reflecting on where brands fall short, either in reference to the information they reveal or the interactions with consumers.
The rebirth of retail
Every week, new headlines are very distressed to claim the downfall of the retail industry, yet the reality is that both winners and losers have emerged. This situation is mainly due to disruptions in retail consumer behaviour, caused by technological innovations, the struggle between competitors and the fluctuation of the economy.
However, these same pitfalls have caused brands to improve in their relationships with consumers. The continuous evolution of technology, particularly in the areas of artificial intelligence (AI), machine learning and virtual and augmented reality, creates new opportunities for brands to personalize experiences and transform internal operations.
Today, the retail sector is not in the midst of the Apocalypse, but it is experiencing a renaissance of the sector. This renaissance means that brands must rethink the consumer experience and how to invest in it to thrive.
There are reasons to be optimistic. However, brands must understand the four key disruptions behind the retail renaissance:
- Consumer Disruption: Thanks to the proliferation of smartphones and increased connectivity, consumer expectations around speed and comfort have reached new heights. Ten years ago, a five-minute wait on a payment would have been easily overlooked. In the “Click” era, that same wait could be inadmissible.
- Technological disruption: No facet of the retail sector has been left untouched by the technological revolution. For example, 34% of the shoppers say they have researched a product online using a mobile device in a physical store.
- Competitive disruption: Today, brands compete against literally thousands of competitors, including large markets, agile players and new business models such as subscription services, not to mention large companies like Amazon or Walmart, which they have unlimited resources for attracting customers across countless categories.
- Economic disruption: Revenue and cost pressures have driven a fork in consumer behavior, where companies with an intermediate price range have fallen behind.
With these four outages, brands need to understand that it’s important to know consumers and take a closer look at changes in their purchasing preferences. Of course, focusing on the consumer experience is not new, but now it’s more important than ever.
An excessive focus on the product
During this stage of renaissance consumers can enjoy unlimited options. So brands need to be focused on improving the value proposition that matters most to their customers. However, nearly 60% leaders say their only value propositions are based on product quality, compared to 11 that focuses on price.
These numbers show that the marks are stuck in the differentiation of the product. This may be relevant when offering luxury goods, but for those who feel the competitive pressure of online markets, it is necessary that to commodify new products or business models, new services are added that improve the experience consumer holistic during the purchase process.
Only 10% of the leaders rate values and emotional connection as their only proposition of value. For this reason, brands may be missing a key opportunity to not only attract consumers, but to keep buyer satisfaction high.
The consumer experience is disconnected
As stated at the outset, business leaders are trying to get back to the basics and put consumers at the center of their business strategies. However, that idea is far removed from reality.
The companies recognized that, throughout the customer’s journey, different points of “pain” arise in which the customer experience may be affected. Brands rated the biggest challenge within the commitment and discovery stage (32%), followed by awareness and acquisition (24%). These two areas collectively represent more than half of the areas that need to be improved the most.
Who should take over?
Once you’ve identified the areas where users are most troubled during their shopping experience, it’s important to identify which job figure is responsible for improving those situations.
According to SalesForce respondents, there is no clear role or department within organizations that have a strategic or execution plan that includes these actions. Results ranged from 34% for the CEO, 12% for customer service and service, and 8% for analytics/data intelligence.
Instead, this data is increased when C-level executives are asked, 72% in Suite C believes the CEO is the owner of the strategy that revolves around the consumer experience and its execution.
Whether it’s the CEO the latest owner or a multi-stakeholder collaboration, the success of the consumer experience is based on accountability, alignment, communication and, most importantly, data management. As long as there are several property approaches, data governance is critical to breaking silos and making them more accessible and actionable across the organization.
Data is the basis of everything
There is a solution to the problems that revolve around the consumer experience and it is the unlocking of the data to get to know the consumers and provide them with what they want, over and over again.
According to the latest surveys, the main problem is that today’s brands are not able to translate data into actionable insights, implying that companies are not prepared to apply innovative capabilities like AI.
However, more than half of leaders estimate that their digital businesses account for more than 25% of total revenue. Industry data reflects this shift to digital. During the 2017 winter holiday period, e-commerce sales grew by 18%, compared to 5.5% for retail overall during the same period (NRF).
However, despite the increasing share of revenue in e-commerce, most organizations have not fully assimilated the advent of the digital age.
Why don’t they prioritize?
Continuing the importance of data, it should be noted that regardless of the key areas of data management, the main deficiencies occur in:
- Business governance area: 68% companies have no clearly defined roles, let alone governance for consumer data management.
- Business Agility: 63% brands do not respond to consumer demands, in an agile manner.
- Company security: 54% companies do not have rigorous compliance to monitor and protect consumer data.
Brand leaders should prioritize accessibility to consumer data and establish clearly defined roles for data management. These roles are critical for unlocking data that remains inactive across the enterprise to harness the potential of AI and other data-driven capabilities.
The commitment to artificial intelligence
The potential impact of AI on the commercial area is immense, however, adoption rates are still low. On average, just over a third of leaders have adopted AI for a particular use case. But those who, if they have taken the step, have focused efforts on applications aimed at customizing prices, promotions and relevant search results.
Adopting AI can be a great effort, especially when the underlying data is confusing. However, investments by AI leaders promise to pay big dividends in the future.
On the other hand, those organizations that have decided to dedicate their efforts to the implementation of artificial intelligence should not forget the importance of hiring qualified personnel.
Artificial intelligence and user data, the perfect combo
Data empowers teams, individuals and company culture. However, for some business brands, lack of access to data is a barrier to success.
For example, 65% manufacturers cannot access a moderate amount of consumer data through an indirect route (i.e. wholesale markets or channels).
Indirect data sources are increasingly important for the construction of buyer profiles, and for the perception of the holistic journey that the client makes.
Competing in this new world, where competition is fragmented among thousands of options is impossible, so brands must focus on accessing third-party data first. But the right technology is required, as well as the right people and approach.
However, despite the importance of the data, they will not be the only important element within the equation. Marketing, commerce and service teams must collaborate to build a unified consumer experience, avoiding disparate systems and different departmental lines. Only then will a unified commitment be adopted.
Unified trading platforms
Finally, unified trading platforms have increased in importance in recent years given the disparate nature of the technological ecosystem.
With the expansion of enterprise digitization, an excess of technology platforms and systems have accumulated, all of which are intended to support the different capabilities of each channel.
Business leaders say they maintain an average of 39 disparate front-end systems to manage the different stages of customer travel. This includes point-of-sale, call center, e-commerce, digital marketing, social media, and content management.
Therefore, the emergence of unified trading platforms allows better management of consumer marketing, commerce, and the interpretation of service data. 32% of the organizations are already creating a unified engagement platform strategy.
Specifically, it is the members of the C suite (52) who are most interested in adopting a unified trading platform.
Conclusions
Expanding to a unified consumer engagement strategy helps address the biggest barriers within the consumer experience.
Therefore, brands must target their goals where opportunities are really located: the intersection of consumer data and the unification of the company.
Data is the most important element for the next generation of consumer experience initiatives. The winning companies will be those that manage to make the transition from a mediocre consumer experience to an excellent one using and managing all the data collected.
No expert can predict which channels will be talked about in a year, but it is very likely that data, technology, and multifunctional teamwork will be essential to personalizing and generating value for consumers.
