Institute for Business Value

Every industry can learn from retail’s pursuit of optimal customer experience

Retail and consumer products brands have much work to do to satisfy customers’ continually evolving expectations. On a 0 – 100 scale, brands scored an average of 33 in the 2017 Customer Experience Index Study from the IBM Institute for Business Value. Only 3 percent of brands were classed as “Leading Edge,” which means they scored 60 or higher on the index. With so few brands pushing the envelope of customer experience innovation, there is a real danger that customer expectations will outstrip brands’ capabilities to deliver the optimal shopping experience.

Many brands are falling behind in customer experience

This problem likely isn’t unique to retail and consumer products companies. Organizations in every industry have customers of one type or another, and every organization is in competition to keep customers’ loyalty, advocacy and spend. If your business revolves around selling or providing goods or services to another entity, then the CEI study is relevant to you. And its insights can help you determine how to adapt your business model to enhance your competitive advantage and improve customer loyalty.

To create the CEI study, we leveraged feedback from 35,000 consumers who told us what was important to them at strategic points along the shopping journey, factors that would influence the choice of one brand over another. Their responses show that companies must focus on seven key areas:


Organizations must tailor the experience to customers’ preferences. Who are these customers? What do they want? How can a company give them what they want at scale while remaining cost-effective and profitable? Any business must be able to answer these questions.

Digital experience

The world is in motion and data is all around. Companies must make it easy for customers to connect and transact wherever and whenever they want in a frictionless manner. If it’s difficult to do business with you, then customers will go elsewhere.

Supply chain

Companies must have the right product in the right place and at the right time and price. Getting the basics right so you never have to say no is fundamental to customer confidence. Visibility, transparency and reliability underpin a positive brand experience and will encourage customers to spend.

Physical/digital integration

Where physical and digital meet is one of the key battlegrounds for the hearts and minds of customers. It’s about ensuring consistency of experience, regardless of channel, because customers don’t recognize separate channels anymore. They see only the brand, and they’re looking for the provider of the best brand experience.

To improve customer experience, brands need to focus on more differentiating capabilities

Social media: Companies must get to know customers beyond the transaction and become essential in their lifestyle during every life stage. Brands need to stay relevant and create an ongoing dialogue. Co-creating and collaborating with customers (in new product development, for example) will mean more hits than misses. This will be good for your bottom line.

Mobile: Everyone has a mobile device. Make it easy for your customers to get the best out of their devices. Design your experience around the always-on, always-connected mobile consumer.

Store experience: What if my industry doesn’t have stores? Well, how about branches, showrooms, cinemas, terminals or offices? It’s the same idea, just a different name. It’s where you physically interact with the customer, and that can create a very lasting impression indeed. A digitally integrated “store” experience with connected, knowledgeable associates acting as brand ambassadors can help customers make the right choices when making purchases and keep them coming back for more.

Please read the full CEI study to learn more about how its findings can be relevant to your industry and your business. Analyzing your organization through the CEI lens could give you a vital point of differentiation in the battle against your competitors and help you strengthen relationships with your customers.

Global Retail Lead, IBM Institute for Business Value

More Institute for Business Value stories

C-suite executives are ready to double-down on cloud computing

At a time when the hype around emerging technologies such as autonomous cars and augmented reality seems to be sky-high, C-suite executives are keeping their feet firmly on the ground when it comes to investing in a core area: cloud computing. While it might not seem surprising that a majority of CxOs would prioritize such […]

Continue reading

Four steps can help your organization close the gender gap in leadership

Despite abundant evidence that gender equality in leadership is good for business, an overwhelming majority of organizations say advancing women into leadership roles is not a formal business priority, according to a new study from the IBM Institute for Business Value (IBV). In fact, women hold only 18 percent of senior leadership positions among 2,300 organizations surveyed […]

Continue reading

In the Spotlight: Damian Brown

What is your current role for IBM Talent Acquisition Optimization? I am leading go-to-market sales efforts across Middle East and Africa for TAO, a role which has broadened across our Talent and Engagement (T&E) offering over the last six months.

Continue reading