eCommerce & Merchandising

Retail innovation starts with understanding that yesterday’s retail experiences are dying and good riddance

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Leading analysts agree that customer experience is a key battleground to differentiate and compete. After all, a “delightful” and frictionless customer experience yields increased satisfaction, loyalty, advocacy and customer lifetime value. But what is customer experience and how do retailers invest in new strategies and technologies to win?

One of the biggest cross-industry and global CX trends is digital transformation, which represents the investment in technologies, processes and infrastructure to compete for the new generation of connected customers. In the retail world, this sets the stage for a more agile organization, one that is capable of introducing and supporting new services in store and online faster, better and at scale.

But technology and agility are just the beginning. In my research over the years, I have found that while retailers are ready to take on the challenge of digital transformation and customer experience, it is done through a lens of legacy rather than with an updated vision of what is and what’s possible.

Let’s start by defining customer experience (CX). This is important because many retailers and businesses overall, invest in CX as a means without purpose. By this I mean, that executives do not see the world through the eyes of customers, but instead make investments based on what’s possible from an organizational point of view. But, customer experience can only be defined through real world expectations and the experiences of, you know, customers. Thus, CX is defined as the sum of all engagements a customer has with your company at each touch point, in every key moment of the customer journey and throughout the customer life cycle. It’s not just about how well you do in one moment, because every moment counts. If you have helpful representatives and a cool story layout but an outdated website, complex app, or aging service model, your customer experience can only amount to the average of these things along with every touch point.

The experience customers actually experience, is shaped in totality and thus requires thoughtful design on the whole and in each part.

SHIFTING PERSPECTIVE TO RETHINK PRODUCT AND SERVICE DESIGN

Customer experience is in the eye of the beholder. Retail decision-makers are not representatives or champions of evolving customer segments. They operate through a complex organizational culture that makes it impossible to see people clearly. Yet, executives often think they are their customer. There’s a litmus test for it though, albeit one that is hardly scientific. It’s meant to evoke a smile but also to get you thinking.

In the picture below, what do you see?

Solis Image

While you may see a crowd of people enjoying a captivating moment, you also see the very thing that prevents companies from designing products, services and experiences that matter to connected customers.

Executives see and relate to the lovely woman in the front. She’s not unlike a common customer persona most businesses cater to. But, for the moment, take her age, gender, education, or any demographic for that matter, out of the equation. Let’s just think about it as “the customers we’ve known for a long time”.

EXPERIENCE DESIGN APPROACHES

Any time you design new store layouts, apps or mobile services, or consider new technologies, this group is holding you back from the future of retail. They represent your center of reference. As such, it’s easy for you to see always-on consumers and the technology that they use as fringe, the latest in hot trends, or something that is different from you and the world you know, so it must not be real or critical.

This leads to a few uninspired, legacy-based CX approaches, including:

  1. The use of data to iterate on existing services to deliver the same old thing but maybe better
  2. Capitalizing on a tech trend to try to ‘be hip’ and emphasize tech over value or usability
  3. Repackaging existing products and incentivize them with new gimmicks
  4. Creating in-store and online experiences with the latest tech without understanding how to blend tech and experience in culturally relevant ways that captivate connected customers

Either way, you may miss what’s really going on in the picture. Some see people on their phones prioritizing tech over the moment. Others see that they are not only in the moment, but they’re able to straddle digital and physical worlds to share the moment with others in real-time thus making the moment bigger than just to those present.

Everyone in this picture is in the moment. The question is, can you design experiences that cater to traditional customers and the evolving expectations of your connected customers? Hint: you can and you can’t. But understanding what you know and don’t know is exactly how you win.

As a result, new approaches must be considered. Understand…

  • What does my “digital” customer expect?
  • What do they prefer and value?
  • How do they make decisions online (desktop vs mobile)?
  • How does mobile affect in store customer journey, online touch points and in store experiences?
  • How can cognitive systems help you to understand and predict customer expectations, behaviors, preferences and values?
  • How can you take these insights to re-imagine the future of retail so that it’s more innovative rather than iterative?

The future of retail can only go so far as the products, services, processes, systems, operations, etc. are designed to support. This is why customer experience, design, innovation and leadership must work in lock-step to fuse the connection between usefulness, user experience, value and enchantment.

Change gains momentum with a new mindset that sees customers, markets and opportunities through a lens of possibility and invention, not legacy perspectives.

*This blog post originally appeared on THINK Marketing.

Brian Solis is a world renowned digital analyst at Altimeter, a Prophet company, keynote speaker, and author. His latest book, X: Where Business Meets Design, explores the future of brand and customer engagement through experience design. Follow him on Twitter and LinkedIn. Invite him to speak at your next event.

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