With a recent study revealing that 75% of UK consumers are ‘expected to buy in at least one peak event’, and 60% expected to use a laptop or PC for their purchases, there’s no doubt that the peak retail season is continuing to grow in popularity year-on-year.
How, when and why consumers buy has a massive influence on national business performance. Shopping is something fundamental to the mood and confidence of UK plc. but how we do it is constantly evolving, being driven by a perfect storm of competition, technology and changing expectations.
Nowhere is this more acute than now. Success in the festive shopping season can make or break retailers. This ‘event’ starts earlier and earlier. What was once a day (Black Friday), then a long weekend (Cyber Monday) is now a long sales frenzy that doesn’t officially conclude until we dispose of our Christmas trees in early January.
But this is set against a backdrop of high street malaise. Nearly 3,000 shops shut on UK high streets in the first half of this year and in July the proportion of all shops that are empty reached 10.3%, its highest level since January 2015. It has been widely reported that this is likely to be the bleakest mid-winter for retailers for some time. At the time of writing, Bonmarche is the latest that is being wound up. But, while much of the pressure is being placed on the high street, online retail is not immune to the threat of customer ‘walkouts’.
Retailers need to control online churn
It’s arguably easier to deal with an angry, disgruntled or disappointed customer when not actually faced with the person in question but, just because customers are now largely shopping online doesn’t mean they’re any less likely to ditch a shop or product if they’re not getting the service and personal touches they expect.
We recently polled 500 retailers on the pressures facing online digital teams in advance of the busy retail season. Our study found that, while 92% of digital teams are focused on business outcomes and delivering an omnichannel experience that delights their customers, 60% are failing to measure customer churn. This is even more shocking when you consider that of those retailers polled, around one in three (30%) have an average drop rate of 50% or more on online properties.
In an environment where every penny counts, losing this much custom is seriously haemorrhaging potential revenue. In fact, UK figures from The Institute of Customer Service suggest that customers who are treated well with “excellent” customer service can spend up to £53 (around $65) more at a particular retailer, on average. The same report found that nine out of ten people who received ‘excellent’ service during Black Friday shopping with that retailer again, 37% more than those who received ‘ok’ service. That’s quite a return on smiling, treating customers politely, and trying to anticipate their needs – either digitally or in person.
Turning to technology
Clearly, festive success depends on going beyond consumer expectations. And so, perhaps it is no surprise that in an attempt to blend the bricks and mortar with clicks and mortar to deliver seamless silver service, retailers are turning to technology. Our report found that retailers are releasing an increasing number of digital products and apps as they look to foster connections with a vast array of customers. The production of these digital products increased by 20% when comparing 2018 to this year and only looks set to continue with three quarters (75%) of UK retailers believing this trend will increase in 2020 (this rises to 87% in the US).
Outside of new products and apps, retailers are also deploying technologies such as; live chat (46%), native mobile apps (46%), and front-end web technologies (45%), which are expected to play a bigger role in how they engage with consumers moving forward. Over a third of retailers (34%) are also looking to incorporate AI to improve the digital experience for customers and, when it comes to the scale of the digital experience, 35% of organizations are maintaining five or more digital channels, and 72% measuring three or more channels.
Unsurprisingly, this is an additional pressure point comes when it comes to having the necessary skills. Our research found that one in five organizations are lacking testers to ensure they deliver an omnichannel experience which delights customers, and getting this right is critical. If historical shopping behavior has taught us anything it is to expect the unexpected and this is hyper-critical for retailers at this time of year. While over 70% of retailers deploy AI to test software and applications, being able to weave in some form of human intelligence and understanding can be the difference when the competition is so fierce.
Business outcomes bumper buyer bonanza
What is clear is that retailers are now recognizing the importance of business outcomes and delivering outstanding customer experience. And, while critical, it is not enough. Traditional high street retailers have to grasp with the enormous task of transforming their businesses to digital experiences and the digital experience needs to deliver the very best of face to face interaction.
Today consumers want the best of both worlds and retail has to find the answers. It’s no surprise they are turning to AI and new technologies to deliver an omnichannel experience that drives business growth and delights customers.
About the Author
Dr John Bates is CEO at Eggplant. John is a visionary technologist and highly accomplished business leader. He holds a doctorate in computer science from Cambridge University, U.K., and is the author of the book “Thingalytics: Smart Big Data Analytics for the Internet of Things.”