Customer Engagement High on Retailers’ 2012 To-Do List
Retailers plan to get all customer-centric this year by focusing on customer service initiatives, upping investments in IT, e-commerce and mobile. That’s the conclusion of a new report, Benchmarks for 2011, Forecasts for 2012, from the National Retail Federation Foundation and KPMG.
According to a survey of retail executives, 67 percent listed customer satisfaction as their top strategic goal of the year. Eighty-two percent said improved customer service will be their top priority for the year, up from 75 percent in 2011.
“Though customers are always a company’s top priority, customer satisfaction will get a huge facelift this year. From increasing their brand visibility through cross-channel initiatives to providing unique, personalized shopping experiences through every channel, retailers have indicated 2012 is all about the customer,” said Matt Shay, president and CEO of NRF, in a press release.
An increased emphasis on e- and m-commerce was clear from the survey’s results. Eighty-five percent of respondents said they would emphasize increasing online sales versus 83 percent in 2011. The percentage of companies putting a greater focus on mobile jumped from 29 percent last year to 38 percent in 2012. Fifty-three percent said they would look to personalize digital commerce with “location-based services and tracking methods unique to shopping habits.”
Moving into stores, retailers planned to make greater use of mobile point-of-sale.
“Retailers have turned their attention to growth acceleration, with an emphasis on improved customer engagement strategies and tactics,” said Mark Larson, KPMG’s global head of retail. “Harnessing the vast amounts of customer data they have at their disposal to create unique consumer interactions will be critical, especially as digital sales grow. Clearly the retailers who master the one-to-one customer approach, and who also leverage the full potential of e- and mobile commerce platforms, will be in a much stronger position to gain wallet share.”
Discussion Questions
Discussion Questions: Where do you see the greatest opportunities for retailers to engage more effectively with customers — online, mobile, social, in-store? What chains or independents can others look to for “best practices” in customer engagement?
I feel that retailers should engage with customers through all these channels (online, mobile, social, and in-store) at once. As retailers and marketers, we must keep in mind that consumers form one opinion about the brand, regardless of the channel(s) they interact through. Retailers must therefore deliver a coherent experience across the board.
I’d question whether any of these are focused on customer service or engagement. If retailers want to be “all about the customer,” they need to interact with the customer and make available what the customer wants. This means that store help needs to be better trained and more responsive and websites either need to improve (as the Braintrust has often noted) or they need to make a real person available. Going digital is not about customer service.
I find the percentages not as important as the scope/scale and associated demand on the marketing/merchant and infrastructure organization. In client meetings we find that “big data” is a challenge — how to leverage it to deliver meaningful, exclusive and differentiated shopping experiences — in-store, online, mobile, and through direct order. Aspiring to lift customer satisfaction is but one measure of how personalized service informed from data will lift business metrics. Refreshing the loyalty program design/value proposition, leveraging mobile apps, and building multi-tier promotions via social media are all key initiatives retailers are seeking to focus on in 2012.
Investments in ecommerce and mobile do not necessarily equal better customer service. Those technological advancements do little for consumers if products are out of stock or if a retailer has a draconian return policy.
It’s the basics that constitute good customer service. And no amount of digital wizardry can cover that up.
For bricks and mortar retailers, the focus still needs to be on the in-store experience. In an environment of reduced head counts in stores, there is a real opportunity for positive differentiation by having engaged, empowered front-line staff.
For retailers operating in an online capacity, social media represents a terrific opportunity to listen and engage current and potential customers. The key is to create a dialog, not simply focus on selling and price discounting.
Best in class: Amazon.com
Last year, the NRF Retail Horizons survey showed that loyalty was the top strategic initiative and this year’s priority is a precursor to that. Customer loyalty starts with engagement and given the tools, channels and dynamics at work, the opportunity isn’t either/or in terms of online, mobile, social or in-store. It’s all of the above as the retail experience, in most cases, is omni-channel.
Different customers will engage with different channels but the one constant opportunity is integrating the shopping experience itself (in-store, online, mobile, or whatever) with what happens before and after.
This is the absolute failure point for most retailers, where that pre- and post- purchase is simply an “on-sale” message rather than relationship-building ones related to customer recognition and appreciation.
I think the greatest opportunities for retailers should be in-store with a staff empowered to see transactions through.
Online, mobile, social are gimmicks that may get customers into the store, but a good staff knows how to close the deal and read a customer better to get a transaction completed.
The problem I see and it is magnified during the holiday season is the lack of “cash registers” and long lines to conduct transactions. Retailers need to do something about this and maybe have mobile POS to conduct transactions faster.
Getting customers out of the door efficiently and quickly is just as important as getting them in the door for engagement.
First, let’s be honest; the vast majority of retailers haven’t figured out how to maximize the value of in-store customer engagement. Sure, web, mobile, and social are all important too, and deserve some attention. However, studies continue to show that staff availability and appropriate assistance are two of several factors that consistently annoy customers. (Others include not being able to find the desired merchandise, and waiting too long in line). This represents a huge “low hanging fruit” opportunity for most bricks and mortar retailers, an opportunity they can’t afford to ignore.
Historically, retailers have found it very difficult to manage in-store engagement because the only effective tool was the most precious resource in the store, the time of the store manager. Today, there are technology solutions available to gather, analyze, and provide insight on customer engagement (and the other top customer annoyance factors) so that the store manager and others in the retail enterprise can quickly see the nature of their customer engagement and its impact, positive or negative, on that specific store or department’s results. This puts the store manager back in the sweet spot of productivity, coaching the store team to ensure the desired customer experience and its immediate impact to sales and profit.
It comes down to a truism voiced by Peter Drucker some time ago: “You can’t manage what you can’t measure.” Retailers who invest in the ability to measure their customer engagement performance will have the leg up on managing that critical activity to drive customer satisfaction and financial results.
There’s a difference between buying into customer-focused mobile technology and strategy that is developed on customers’ use of mobile technology. What I read is that retailers are moving ahead with technology they are told relates to customers, but not necessarily basing retailer strategy on customer mobile behavior. Just saying.
The greatest opportunity for the apparel retailer to engage more effectively with their customers is in their fitting rooms; in-store or online. Much has been done to make the online experience more accurate which can only help the dismal online apparel return rate of better than 50%.
For the brick and mortar apparel retailer, 67% of people who use fitting rooms buy versus 10% who browse the sales floor. Browsers don’t make the trip to the brick and mortar store anymore and are now online. Customers who visit stores are there to use the fitting room to make their buying decisions. Doesn’t it just make good sense to make it easy for the customer to engage with the sales associates while they’re in the fitting room?
Fitting room technology has great potential, but is worthless unless it enhances personal connections between the customer and the sales associate. Additionally, emphasis on fitting room service behaviors is necessary to drive customers to the fitting room and service them appropriately once there.
At the end of the day, the buying decision is not made with a click online or on the sales floor in-store. The decision to buy is ultimately made when the customer puts the garment on in the privacy of their own home or in-store in the fitting room.
The only real way to find out the answer to this question is to go into stores and ask the customer. I’ve worked in retail for 17 years now and I’m always surprised at the minimal engagement of headquarters employees with the consumer.
Nice: “67 percent listed customer satisfaction as their top strategic goal.” These are retailers, right? Is there something OTHER than customer satisfaction that matters most?! LOL! Shopper engagement has to become ingrained in the retailer’s culture. Best examples: Fairway in NYC, and Trader Joe’s.
I was all set to chime in with the choir on this one about the value of personal engagement and how brick & mortar retailers haven’t maximized this one yet.
Then I recalled that seven (at least) of this year’s top ten retailers for customer service were pure online plays. Whoops! How does that work?
Maybe it’s that word “engagement.” By definition, engagement is a two-way street. When I am online shopping, I am there because I choose to be. I am already open to being “engaged.”
When I’m in an auto dealership or a furniture store, I’m probably in that same frame of mind. I’m there because I want to be and because I want something.
Now think of the typical Food/Drug/Mass trip. How much do I really “want” to be there? Not much. I’m there because I HAVE to be there. I need food, drink, toiletries, etc. There is nothing “engaging” about it.
So perhaps the brick & mortar folks are getting a bit of a bum rap. Maybe they don’t engage us because we don’t want to be engaged.
How about on the sales floor? I was at an Apple store yesterday and they had 24 people on the floor. 24 in approximately 5,000 square feet, with more running in and out of the G-bar. Not one customer went without help. Not one. It’s no wonder that store is cranking amazing numbers and looking for a bigger space.
I know everyone’s tired of using Apple as an emulator, but the idea of abundant, well trained sales help goes back a lot further than Apple. Time to re-invest in the sales associate, IMO. All this focus on technology is a bonus, but helping customers with people is blocking and tackling.
What’s the combination of kumbaya and deja vu? Kumbay-vu? We must thank Matt Shay and Mark Larson for their escorted trip down a Timothy Leary-induced memory lane.
These pie-in-the-sky, pabulum observations have been chewed on for years, but are still dutifully reported from speaking circuits. Amazing. I can’t begin to enumerate the trite cliches found in the speakers’ comments. Stop the mastication!
Tom Peters taught us much, and shame on us if we ignore his lesson, among many others, on MBWA “Management By Wandering/Walking Around,” a practice born at HP in the 70s. Hopefully we are all familiar with Tom’s 1982 “In Search Of Excellence.” If not, get thee to Amazon. Thee can learn a lot.
Let’s go back to the future. Pay heed to the Tom. The lessons still apply today.
I agree with earlier commenters that technology by itself won’t do a thing; it’s how you integrate it into an overall customer experience strategy that matters.
Two potentially overlooked consequences of technology that retailers can address to improve the customer experience:
1. Invest in tech for front-line associates: One big source of lost sales and potential customer frustration is the “information asymmetry” phenomenon of a smartphone carrying customer having more information in their hand than the retail associate can access from the cash wrap. Arming associates with technology that allows them to access product, pricing, stock and competitive information on the floor allows them to add more value to their customers’ experience.
2. Addressing price transparency head on: It’s time for retailers to stop penalizing customers for making the effort to physically go to a store by charging them more for an item than they would pay online. Retailers that align their online and offline pricing will see benefits in customer loyalty.
Customer service is more than an initiative. A few new gadgets won’t make much difference without this being truly core to the strategy, culture and measures of the business.
Like customer satisfaction and customer loyalty, customer engagement has different definitions depending on whom you ask. Of the three, customer engagement is more of a two way street than the others. Some customers want it. Some don’t. The catch is that, if you asked, most want the opportunity if they need it.
The choices of opportunities given, online, mobile social and in-store are interesting. Each pose different types of engagement with entirely different options. Ideally, all lead to the same thing – selling something. It is also interesting that over two-thirds of the survey at this point say the greatest opportunity lies in-store. Let’s just say that a customer inside the four walls of brick and mortar and one that lands on a web page are both in-store. They are, aren’t they? If so, the question on engagement is the same. Can the retailer engage with them and can the customer engage with the retailer? Can either do it easily?
It is not really an ambiguous or complex issue. Its very basic. The technology need not add complexity or mystery to the issue either. The basics would still apply:
Did you greet the customer?
Did you intentionally let them know assistance is available for any need?
When asked a question, do all of the retailer’s assoicates know never to answer, “I don’t know”?
Do you know the key points of engagement in-store?
Did you offer to compliment their purchase?
Can the customer get an answer when they engage the retailer?
Was there a complete opportunity for interaction and engagement at the point-of-sale (check-out)?
Did you tell the customer something they didn’t know about your offer?
Did you offer the customer a reason to return?
Did the customer acknowledge your offer?
Technology is available to compliment, but not complicate, all of these actions. Retailers that do all of these well are those like Costco, L.L.Bean, Zappos, Whole Foods, Amazon, Brighton, Nordstrom, and many auto dealers.
Smartphones present an amazing opportunity for customer engagement. With over 100M in the US alone and almost 90% of them being used for some form of shopping, the numbers are staggering. With shoppers now bringing their “computers” into the store, retailers need to understand the various ways they can use them to delight customers.
We focus on helping shoppers find the exact locations of products and the deals they are most interested in, but that’s only the beginning. Smartphones can radically enhance the customer experience and provide significant shopper insight.
And, if the shopper is not using your app or tools, they’re likely using someone else’s.
Customer Engagement and Customer Service are absolutely keys to differentiate yourself in a price-driven world.
I have heard some horror stories recently of price matches where customers have gone into stores and shown products at cheaper prices online and actually it is with the retailers own website and customers have been told “sorry we don’t price match to our own website”! How is that customer service?
Technology needs to help prevent these types of issues and also create customer engagement by providing similar experiences, no matter where or how customers shop. There is still so much inconsistency.
I have always wondered why fashion retailers seem to put inexperienced store staff on the fitting rooms. I have thought this is a great place to show exceptional customer engagement and “guided selling” by recommending other products that go with items customers have taken into the fitting rooms. This could also lead to increased basket size.
I believe Phil Rubin hit the nail on the head with his comment on the importance of offering an “omnichannel” experience. This is a buzzword that gained considerable momentum at NRF 2012 last month and for good reason: Customer engagement is happening on all channels simultaneously (online, mobile, social and in-store). As such, the lines between different channels have become blurred.
In the omnichannel setting, retailers must offer a consistent buying experience and succeed in keeping customers engaged an ALL channels. Technology is a big part of that equation, connecting the dots between online, mobile, social and in-store.
A desire to offer a solid omnichannel experience is also the motivation behind e-commerce giants like Amazon, eBay and PayPal opening physical stores — they don’t want to be limited to the online or mobile commerce. They’re willing to come to the tried and true brick-and-mortar space as well.
So the question remains: How can traditional, brick-and-mortar retailers compete? They, too, need to go omnichannel.