The Spring of B2B Marketplaces : Modelling the impact of B2B Marketplaces strategies
Following the presentation of the study : The Spring of B2B Marketplaces at the Marketplace Summit by Mirakl, we are pleased to make it available to...
David Turner, CEO of Webhelp UK, analyses why UK’s retailers are failing to meet customer expectations.
Retail growth is back. In April this year UK retail sales grew by 1.3% – the biggest single month leap in a decade. And it doesn’t seem to be a flash in the pan brought on by the arrival of Spring and a sunny Easter. On an annual basis, according to the Office of National Statistics, sales are up 6.9%, the highest annual growth since May 2004. So, it would appear that the good times have returned and its time to focus on sales, sales and sales! Perhaps not. Or, at least, not exclusively. New research indicates that consumers are growing frustrated with retailers who seek to maximise revenues by selling to them over multiple channels, while allowing the service experience to wither for lack of investment. Today’s shoppers say they are experiencing a service deficit, when the sales promise is let down by the service experience.
It’s hard to fault retailers for focusing on their multi-channel sales effort. They are doing it, after all, in response to customer demand. Consumers’ appetite for shopping online continues to escalate. Online sales of non-food items rose by nearly a fifth in December 2013, according to the UK Retail Consortium. In the grocery market as much as 15% of UK sales (worth £900m), were booked online between 20 and 23 December 2013 alone. So, naturally, retailers have prioritised sales channel development, making sure consumers can shop when, where and how they want to. Increasingly that’s online, via mobile and tablet, and at odd times of the day. Savvy retailers are seeing new sales peaks in the early morning (shopping from bed) and 8pm in the evening when the family are relaxing. Some would even say shopping is replacing TV as a family ‘at-home’ leisure activity.
Any time, any channel
So, consumers want to shop over any channel at any time, and the industry has responded well to that desire. But customers also expect to receive service across any channel at any time – and for that service to be fully connected. The truth is, on this point, retailers have been slower to move. Research carried out by brand consultancy Loudhouse, reveals that 80% of UK consumers believe – based on their experience – that retailers are putting more effort into multi-channel sales than multi-channel service. It’s easy to see how that could give rise to resentment and frustration, when the ‘promise’ of the sales experience is let down by the reality of failed deliveries and poor responses to questions or complaints.
80% of UK consumers believe retailers pay more attention to generating sales across multiple channels than to providing an integrated customer service experience.
There are two reasons – both very understandable – why retailers are failing in this regard. First, during the long years of recession and slump, the fight to win sales was a desperate one. It’s not surprising then that opportunities to open up new sales channels or routes to market were given priority. Second, because, while opening up a new online sales channel is relatively cheap, building the infrastructure to support excellent delivery and service follow-through is more expensive, takes longer and generates no obvious revenue return.
It is, however, time to adjust those priorities. Retailers can hardly blame customers for thinking ‘if you can sell to me over multiple channels, surely you can serve me that way too.’ Nor should they be surprised if their failure to do so erodes future sales performance. In the Loudhouse research 33% of consumers said they would spend more with a retailer or brand that provided good customer service, while 78% said that a company’s service reputation had a significant impact on their buying decisions.
The customer journey
The secret to unlocking successful sales and service is to stop thinking about customer transactions and start thinking about customer journeys. The customer’s journey may well include a euphoric high when they click to add that much-desired object-of-desire to their online shopping basket, but it doesn’t end until that object has been delivered and proves to meet their expectations. The challenge for retailers now is to make sure there is no disappointment at any point in that journey.
So what’s to be done?
1. Sell – then deliver
For every non-store purchase delivery is a crucial element of the customer journey. What customers value most in this regard isn’t so much speed (get it tomorrow!) as certainty. Think how many times a website has promised you a three day delivery only to deliver in five days (by which time you’re probably hassling the contact centre for an explanation). However, it can be just as frustrating if the delivery takes place in one day. If the parcel isn’t letterbox-sized and you weren’t at home waiting for it, you’ve now got the hassle of going to a depot to collect it or calling to arrange another delivery attempt. Frustrating.
Smart retailers view delivery as an intrinsic service element associated with the sale. They will agree precise rather than general delivery commitments with their service providers and use proactive notification via text or email to provide accurate delivery information and advice (we’re delivering your washing machine at 10am tomorrow, so make sure you clear space in your kitchen this evening). Linking your delivery partners to your service operation so that you control information associated with delivery is a big step but a vital one.
2. See the customer
Three years ago the American retail giant, Sears, invested in technology that would give its contact centre agents – 6,000 of them in 17 centres across two continents – a 360° view of the customer. It resulted not only in a massive increase in customer satisfaction, but also a $4 million revenue increase and $12 million decrease in operational cost within three years. Now, when customers call, agents can see their purchase history, their preferences and their open orders. They can provide an immediate, personalised and responsive service immediately.
Naturally that 360° view will be invaluable in a sales environment, where it will help to identify the sales propositions most likely to entice that particular individual. All well and good. But that’s only the first step. Today’s customers don’t just expect that responsiveness from your contact centre agents. They expect highly personalised service across all channels. Naturally then, for example, agents handling social media must also have a 360° view. In this respect it will be useful if that 360° view includes an analysis of a customer’s ‘social influence’ – an indication of the strength and extent of their social networks and the degree to which those networks may be influenced by their positive or negative views of your brand. Organisations have long appreciated the value of cultivating advocacy among their customers, it is only logical to invest the greatest effort where there is the greatest opportunity for return. In digital channels we are even seeing developments in which a 360° view is being extended to online virtual agents. Technology integration allows them to access customer account information to provide personalised responses as consumers self-serve online.