What happens to the customer experience when an omnichannel journey goes bad or ugly? In a recent webcast, I highlighted some of the key challenges our global retail customers are sharing with us regarding the omnichannel customer experience. By breaking down these challenges we can isolate where the potential value and financial outcome for excellence exists, as well as look at what happens when the CX is suboptimal.
One of the most pressing challenges for today’s retailer is prioritizing the 70-plus customer journeys that may be offered. This requires a complete pivot to the customer—a shift to a business model that puts the customer at the center of every business decision and process. Let’s look at the opportunity to deliver omnichannel excellence and understand the potential cost of a badly executed customer journey.
Key Challenges in the Pursuit of an Optimal Omnichannel CX:
We need to cultivate omnichannel shoppers, as they drive the most traffic, but they are also the hardest ones to please. 75% of buy online, pick-up in store (BOPIS) customers are likely to make an additional purchase and 49% go on to make an unintended purchase while they're picking up in store, driving additional topline sales (Invesp). These customers are also at least two times more profitable to a retailer. They're more loyal, they purchase more frequently, and we know more about them. This allows us to market and target them more effectively. In fact, a McKinsey survey found that where a brand improves the customer journey, revenue impact can be as much as a 10-15% increase and the cost of serving that journey can fall by 15-20%.
Your employee is your best brand ambassador. Consumers are empowered with their smartphones in hand and equipped with more information than many store and contact center associates. Retailers must arm store and contact center associates with tools, data and knowledge to create a superior experience. Not only does this improve the customer experience, but it also increases employees' motivation, job satisfaction, and retention rates.
According to one report it costs $3,300 USD to find, hire, replace and train a minimum wage employee. Of all retail positions, part-time hourly store employees have the highest turnover rate, with about 81% on average in 2018. This churn rate is a major drain on resources but companies that make a concerted effort to improve their customer experience are seeing employee engagement rates go up on average by 20%.
There's never been a time when the cost of new customer acquisition has been higher, and it's equally never been easier to lose a customer from a bad experience. Consumers expect a consistent and seamless experience across all touch points. They also want their experience to be individualized—they don't want to see irrelevant offers, they expect offers that are both targeted to their preferences and relevant to what they're doing now. Real-time relevance for a retailer can result in positive business impacts—from being able to rescue an abandoned basket online in a store to converting additional sales from identified traffic.
According to a recent article, 86% of customers will pay more for a better experience, and keeping an existing customer happy is 14 times more profitable than landing a new customer. Maintaining and cultivating loyal customers is the best way to improve the bottom line. Harvard Business Review reports that if you can improve your retention rate by just 5%, you'll see a multiplier effect that will increase profitability by 25-95%.
Digital exposes every single one of a retailers’ business processes to their customers, and frankly, digital exposes mediocrity in an organization. Every seam, every bit of friction, every inefficiency in your business process is on view to your customers. Every customer, every guest, has a voice and digital gives those voices a platform. After just a single negative experience, 51% of customers reported that they would leave a brand forever (Newvoicemedia.com). In addition, $1.6 trillion is lost by companies in the United States due to customers switching because of poor customer service (Accenture).
With digital exposing mediocrity in the world of modern retail, there are a few key strategies we are helping retailers adopt:
We've been working with several retailers to prove out these potential wins:
We have a methodology and a team that can help you assess your current omnichannel capability, maturity and readiness. We can help you look for areas where you're being exposed by digital and help you drive your business to next practice.