CX Network in retail benchmarking workbook 2022

Foreword

It has never been easier for consumers to switch brands. It has been reported by market research company eMarketer that 71 percent of consumers worldwide switched brands at least once from 2021 to 2022. And according to Talkdesk research, half of consumers say that they stopped working with a company in the past year because of an instance of poor customer service. In the face of this reality, retail brands are sculpting customer experiences and services that will win them loyalty and trust.

This workbook pairs research from The Global State of Customer Experience 2022 with real-life case studies to reveal how retailers are staying ahead of the curve on trends like digital customer experience and employee experience. It also looks at why retailers are investing in solutions like artificial intelligence (AI), Voice of the Customer (VOC) feedback, and data and analytics in the CX space.

Compiled by CX Network and Talkdesk – the global cloud contact center leader for customer-obsessed companies – with key insights and learnings from IKEA, The Very Group and Dufresne Group, read on to learn how to overcome the customer experience challenges facing those in the retail industry.

“Forcing a customer to call an 1800 number is, frankly, not acceptable in today’s environment – having chat, email, SMS and bots alongside the traditional phone is critical – it’s the price of entry today.”

Norman Alegria

Director of guest care at Dufresne Group

Use data and analytics to power customer centricity

When surveyed as part of CX Network’s Global State of Customer Experience 2022 report, those in retail recognized the importance of data and analytics. Not only was data and analytics cited as a top trend for 50 percent of respondents, but data management and customer insights were noted as top investment opportunities for 17 percent of respondents. Additionally, creating actionable insights from data was cited as a top challenge for one third (33 percent) of those in retail. Similarly, a Talkdesk research report found that most retailers’ top customer service priority is collecting, managing, and analyzing customer data across all relevant channels and touchpoints.

By using data, companies can bring personalized experiences to their customers, while also using the data to streamline processes and customer journeys. Companies must ensure good data hygiene, however, to make sure that data is accessible across the business so it can be used to create meaningful insights and is not siloed within departments.

Canadian home furnishing retailer Dufresne Group changed organizational mindset by using its customer data to inform business decisions.

Following its digital transformation during the Covid-19 pandemic, the retailer discovered that it could now digitally connect with customers and gain access to data that may not have otherwise been revealed. This data revealed that the organization’s previous assumption that customers would be reluctant to buy expensive homeware items online was false. This was proven when the company saw a customer login to the website at 11pm and purchase a sofa via online chat rather than visiting instore.

Norman Alegria, director of guest care at Dufresne Group, explained that he was very surprised that someone wanted to purchase an item like a sofa at 11pm without touching it. However, after reaching out and discussing the purchase with the customer, he discovered that the customer was renovating their home mid-pandemic.

The data-informed digital transformation has seen Dufresne create a customer-centric business strategy that blends channel interactions choice, consistency and personalization.

Also read: CX Automation in APAC

“Forcing a customer to call an 1800 number is, frankly, not acceptable in today’s environment – having chat, email, SMS and bots alongside the traditional phone is critical – it’s the price of entry today,” Alegria states.

This analysis of data has also revealed that shoppers utilize a number of channels across the buying journey.

“We are seeing guests utilizing these multiple platforms – maybe the website to start the search, in-store to finalize and bots to track their orders or initiate service claims,” Alegria explains.

By gaining these insights into customer behavior, Dufresne Group were able to digitally transform the business and provide a customer experience tailored to their customer’s expectations.

Enhance digital customer experience through AI

Digital customer experience was noted as both a top trend and investment opportunity by 33 percent of those in retail surveyed for the Global State of Customer Experience 2022. According to Talkdesk Research, fewer than 33 percent of retailers use AI capabilities such as intelligent knowledge bases, virtual agents, and chatbots today.

With the rise of the digital marketplace making, it easier than ever for customers to hop between online and brick and-mortar stores, it is becoming more important than ever for retailers to marry in-store and digital experiences to create unique, seamless customer experiences.

Furniture retail company IKEA married the digital and physical by ensuring the consistency of its various shopping channels whether online or in-store via an empathetic artificial intelligence (AI)-based solution that optimizes stock levels based on customer-buying behaviors. This helped to solve customer pain points by eliminating inaccurate stock forecasting that led to frustrating extended waiting periods for stock.

Peter Grimvall, supply chain development area manager at IKEA, explains that without a proper and accurate forecast, the store cannot understand the demand, or what needs to be supplied to who and when.

“If it’s too much, it increases our costs and hence prices to our customers, or too little, which means we won’t be able to provide the right offering to our customers,” Grimvall notes. “This can have a big impact on our business and the way we serve our customers.”

In the past, global statistical sales data was used to forecast the products needed by IKEA stores across the world for that year. To remove inaccuracies, IKEA launched a demand-sensing tool empowered by AI. Piloted in Norway, the solution interprets up to 200 data sources to make intelligent recommendations for each product. The AI-based solution then draws conclusions on a local level for likely purchasing behaviors.

These conclusions are influenced by a range of factors including:

• Shopping preferences during festivals
• In-store visit volumes
• When customers receive their salaries
• Past buying patterns in holiday seasons
• Seasonal changes
• Weather forecasts

The availability of products both digitally and in-store are then optimized based on demand projections that are gathered both online and offline.

“If it’s too much, it increases our costs and hence prices to our customers, or too little, which means we won’t be able to provide the right offering to our customers.”

Peter Grimvall

Supply chain development area manager at IKEA

Increase NPS scores via VOC feedback

VOC was recognized by 17 percent of those surveyed as a top investment priority for 2022, and Talkdesk Research found that 59 percent of retailers already have customer feedback management capabilities in place. Additionally, VOC feedback such as online reviews or ratings were noted as an impactful trend by 17 percent of those surveyed.

Online retailer The Very Group utilized VOC feedback to pinpoint specific customer pain points to reduce points of friction throughout the customer journey and enhance its customer experience offering.

Mark Billingham, CX director at The Very Group, explains that the company dedicated itself to understand the reasons behind customers contacting them so to locate and capture insights that would be used to guide its business strategy and customer experience upgrades.

“[This was] to ensure we have the best possible chance of understanding how to fix the most important issues first for our customers,” Billingham explains.

Also read: AI for an omnichannel world

The Very Group tapped into VOC data sources including text analytics, voice analytics, agent feedback, scripts from chatbot’s customer conversations, Net Promoter Score (NPS) surveys, a UX lab visited by customers in person and a digitalized portal called All Ideas Matter that captures VOC and Voice of the Employee (VOE) data from its customers. Users are invited to express ideas or observations and tickets are automatically submitted to the CX team who investigate the issues, interacts with the ticket creators and manages the case through to resolution.

The insights collected from these VOC sources allowed The Very Group to pinpoint the top five customer pain points, allowing the retailer to direct its focus on eliminating them. Billingham shares that these pain points are communicated to its board every two weeks to assist with achieving buy-in for CX solutions.

Since the introduction of this VOC-lead initiative, Billingham notes that the brand has increased its NPS by 20 points, its customer churn rates have lowered, and its overall customer base has grown. The brand has also been recognized in the Nunwood Top 100, a list of brands judged to provide the “best customer experience”.

Utilize automation to increase employee engagement

Of those working in retail surveyed for the Global State of Customer Experience 2022, 17 percent noted employee experience as a top trend that would have an impact on their role.

Shannon Flanagan, VP of global strategy, retail and consumer goods at Talkdesk suggests that brands should utilize AI and automation to improve employee experiences, as “happy agents lead to happier, more loyal customers”.

“Brands that are automating day-to-day tasks and common retail inquiries (such as “where is my order?”) are increasing their bottom line and helping agents focus on higher-touch, value-adding interactions,” Flanagan explains. This is especially important today as the stakes continue to rise for agents: 88 percent of retail CX professionals say agents are expected to have a deeper understanding of customer needs compared to a year ago and 85 percent agree that agents are expected to handle more challenging customer questions and issues compared to a year ago. Further, 81 percent say new revenue generation is now an aspect of agent KPIs.

Despite the heightened expectations, customer service reps face many obstacles.

The top five challenges faced by contact center agents today are:

1. Inadequate support from home office or executive leadership
2. Consistently engaging with customers across all channels
3. Responding to inbound inquiries in a timely matter
4. Tailoring interactions while respecting customer privacy
5. Building meaningful connections with customers virtually

“No one calls a contact center because they’re happy. Agents have been forced to spend more time doing repair work to avoid customer churn, than focusing on building customer relationships to drive business growth.”

Shannon Flanagan

VP of global retail strategy, at Talkdesk

By using AI-driven automation and self-service contact center tools, those in retail can now ensure that their agents are in a better position to increase customer satisfaction and support growth. This ultimately leads to more efficient and satisfying customer interactions.

Flanagan notes that while self-service tools drive cost-savings, agent efficiency and customer convenience, legacy and first-gen technology have caused customers to grow weary of common self-service tools like chatbots and automated phone menus.

“No one calls a contact center because they’re happy. Agents have been forced to spend more time doing repair work to avoid customer churn, than focusing on building customer relationships to drive business growth” Flanagan notes. “For contact centers to truly free up agents from everyday inquiries while protecting the customer experience, they need to fuel those self-service tools—customer knowledge bases, automated responses, phone menus and virtual agents—with next gen AI-powered capabilities.”

By introducing AI and automation to their contact centers, retailers will be able to:

• Increase customer self-service rates.
• Identify causes of customer issues.
• Help agents resolve issues correctly and quickly.

By focusing on these three automations, or what Talkdesk calls “jobs to be done”, retail contact centers can use AI-powered automation to solve the biggest challenges in customer experience and get to outcomes that ensure better customer satisfaction.

In other words, this will allow retailers to:

• Equip customers to solve routine and basic service issues any time of day;
• Solve common queries, such as “Where is my order?” or “Can I make a return?”;
• Turn real-time and historical interactions into customer intelligence;
• Automate routine tasks such as CSAT surveys;
• Automatically schedule follow up calls during after-hours interactions;
• Enable customers to be transferred to human agents if they prefer, without need for repetition;
• Glean real-time access to interaction analytics, via all channels;
• Give customers the information they need upfront, and proactively;
• Ensure brand consistency despite the agent’s experience, and
• Onboard, ramp-up, monitor, and improve the service quality of every agent.

Final remarks

Retail brands can place themselves in a stronger position to foster customer loyalty by using the insights gleaned from customer data and analytics to offer personalized customer experiences. An example of this is Dufresne Group making business decisions based on customer data rather than their assumptions, allowing them to expand digitally and provide for customers 24/7.

Those in the retail industry can also increase their NPS and customer satisfaction scores by utilizing customer feedback and VOC data to reduce friction by eliminating customer pain points. The Very Group did this by utilizing a number of different VOC sources to identify the top five customer pain points to solve.

Also read: Data and analytics in APAC

To keep up with customer expectations within the retail space, companies should dedicate resources to optimizing the customer service offering by introducing AI and automation to offer self-service options to their customers, in addition to opening up employees to engage with higher-priority tasks.

Read the PDF report here