Retail, Digital Transformation Tue, Feb 26, '19
Want To Provide a Better Customer Experience? Focus on Retail Operations

 

With Amazon capturing 5 percent of all retail revenue in 2018, the race for brick and mortar retailers to differentiate the in-store experience continues to increase in its intensity.

In order to stay competitive with Amazon and the frequent onslaught of digital native brands, 78 percent of retail executives have made customer experience a strategic priority. Whether through investments in augmented reality or the adoption of memorable experiences -- like REI’s in-store rock climbing walls -- retailers are rushing to bring something extra to physical stores.

But in spite of a sharp increase in CX investments, 54 percent of US shoppers still believe that the customer experience needs improvement.

What Is Causing The Customer Experience Disconnect?

In many cases, the biggest barriers to CX are not due to a lack of creativity or effort. Bad customer experiences usually come down to operational gaps that impact product availability and in-store support, or cause issues with payments or returns.

Much has been written about the need for aspirational brand experiences that delight and entertain customers, like AR applications that make trying on clothes fun and easy. But in the Maslow’s pyramid of customer needs, an in-store social calendar is an aspirational goal, while being able to accurately fulfill click-and-collect orders, or accurately provide inventory information is a critical need.

This is where well meaning retail marketers and customer experience professionals miss the boat. While investments in experiential technology are critical, prioritizing form over substance is a mistake; and retailers that forget to invest in the fundamental technology and process improvements that make a truly optimal customer experience possible will get left behind.

CX Teams Can’t Overlook the Importance of Operations

Part of the challenge of creating the omnichannel, seamless experience that customers desire is that Operations is often excluded from CX initiatives. Many retailers have hired Marketing professionals or CX leaders to focus on brand sentiment, but neglect to bring Operations into the process. While many Marketing and CX teams may not see Operations or Supply Chain groups as having a major bearing on customer experience, gaps in these areas lead to delays in procurement, poor demand forecasting, and lost inventory -- and these are the issues that actually make an impact on Marketing’s ability to hit ambitious customer experience goals.

This means that CX can’t just be a marketing initiative, it needs to be a shared goal with Operations.

Retailers that are still trying to put the responsibility of customer experience fully on the backs of a siloed CX or Marketing team are missing an opportunity to drive a more effective in-store customer experience through enabling more streamlined operations through a unified approach to store technology and systems.

Marketing, Operations, IT, buyers, and other critical players must all work together -- for the first time ever in many retail companies -- to ensure the omnichannel experience is smooth -- from the first visit to the final fulfillment.

Operations In Action: The Impact of Inventory Management On Customer Experience

How does operational efficiency impact the customer experience? Consider grocery retailers, where inventory challenges -- like out-of-stocks -- continue to cost retailers $22B annually.

For retailer marketers looking to improve the customer experience, understanding what is available at the local store, and tailoring promotions to highlight available inventory is a simple step to ensure that customer demand matches supply, and that shoppers can always find the products they are searching for on the shelves.

This sounds simple, but it requires real-time data about orders coming in across all channels, as well as a connection to real time, shelf-level inventory information, and the ability to make information available to all sales associates.

Imagine being able to integrate inventory information with in-store promotions, driving customers to select overstocked items as they browse the website or aisles. Now imagine prioritizing those promotions based on a customer’s shopping profile, so not only are the recommendations in line with the business goals of reducing overstocked inventory, but the customer is getting deals based on their personal preferences.

For More Flawless Operations Starts Invest in Technology; Get Rid of Silos

With 89 percent of customers reporting that they will leave a company after a bad customer experience, CX is an area all retailers must continue to invest in. But don’t mistake investments in bells and whistles for true digital transformation.

In order to create the ideal customer experience, take some time to understand where the process gaps occur in your organization, invest in the right systems to help your teams succeed, and bring Operations and Marketing teams together to look at truly integrating the technology that makes processes -- like click-and-collect -- intuitive and customer friendly.

If you’re interested in learning more about how digital transformation can streamline your operations and drive value for your organization, click here to get in touch with us!