The State of Customer Experience: Three Insights for Retail

Retailers today are focused on building personalized, seamless and streamlined customer experiences. Nearly three-quarters of C-level executives in the retail industry said that improving customer experience (CX) is one of their short-term goals over the next 12 to 18 months, according to a report from management consulting firm BDO.

Few industries were affected by the COVID-19 pandemic like retail, which faced drastic channel shifts for purchasing and service, spikes in sales in some categories and precipitous drops in others, and ongoing supply chain disruptions. As a result, retailers are managing high call volumes, assertive customers and a proliferation of channels that stretches their ability to provide consistent customer experiences. And despite innovations in commerce technologies, such as payment processes and demand forecasting, aging legacy technologies and proprietary systems continue to hold some retailers back, hindering their efforts to improve service.

In this environment, it’s essential that retailers connect data across touchpoints to mitigate friction in the customer journey and deliver more personalized experiences.

In April and May 2021, Genesys surveyed 2,629 consumers and 690 CX executives across Asia-Pacific, Europe, Latin America, the Middle East/Africa and North America about the state of CX. From the 118 retail industry respondents, we gained three key insights:

1. Self-service is a win-win for consumer convenience and CX efficiency

Almost half of CX leaders in the retail industry said improving efficiency through greater self-service is a top priority for 2021. Today’s digitally native consumers want for a first-contact resolution (FCR) and 24/7 availability. By deflecting routine queries through self-service, retailers can free up agents to handle more complex interactions or focus on sales, while at the same time allowing customers to access services when it’s convenient for them.

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Some 43% of retail respondents are already using chatbots within their organization and another 28% plan to implement a bot over the next six months. They’re optimistic about how chatbots can meet customer expectations, particularly in supporting self-service interactions that deflect calls to agents — saving time and reducing costs — and gathering information to better understand and predict customer needs.

The survey shows that consumers are certainly interacting with bots far more frequently than they were in 2017, yet they’re no more satisfied with these experiences. Just one in four consumers is extremely satisfied with chatbot interactions across industries. More than half of retailers, in contrast, said their chatbots are extremely effective in meeting customer expectations, especially as use cases multiply. Current examples range from assisting consumers with in-store shopping to tracking product shipments.

Despite these advantages, retail organizations still have a long way to go to improve the customer experience. Only 30% of CX retail leaders believe they “significantly” minimize customer effort in CX, and just 35% consider chatbots effective in allowing customers to complete a self-service support interaction.

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Key Takeaway

Banish bad bots: Consumers are interacting more with chatbots for customer service than in the past, but the experience is less rewarding. And, according to this research, it doesn’t appear to substantially improve FCR. To further enhance the customer experience, conversational bots can use AI to gather intent and streamline CX processes. This can include leveraging the customer’s profile and prefilling forms or transferring — demonstrating a level of understanding and relevance as the bot enters a conversation. Instead of starting with “How may I help you?” start with “I see you got an error on the previous page. Would you like assistance with that?”

How CX Reinforces Brand Trust

The Co-op is a UK-based consumer cooperative comprising retail, funeral services, insurance and legal services. Managing millions of interactions across the group’s different lines of business, the Co-op contact center team understands what customers want when they interact with a business.

Shoppers have always valued convenience, and this is becoming even more important today. Consumers expect a quick response, FCR and 24/7 service availability.
“Translate that to the contact center and support, and it means more channels, quicker responses — right the first time,” said Claire Carroll, Head of Sales and Service at the Co-op. “We’ve worked very hard to eliminate a customer’s reason to reach out to a contact center. We want to predict customers’ behavior and requests, so in all online activity, customers will see proactive prompts to FAQs.”

When a customer does reach out for help, it’s usually regarding more complex issues. But, in some cases, even that is shifting.

Funeral care is one example. Prior to the pandemic, the primary service channel for funeral arrangements had been the Co-op network of 1,600 funeral homes, with the contact center being used for service queries and after-hours support. The pandemic has forced that to change.

“We now do funeral arrangements online with contact center support,” Carroll said. “If you’d have said to me two years ago that we’d be doing a proportion of our funerals self-serve end-to-end, I would have said, ‘Not an option. People wouldn’t want that.’ And to now see over 93% satisfaction with self-service interactions, versus 96% for face-to-face, is especially gratifying.”

Technology must play a big part in CX, especially in the contact center, because it impacts both customer behavior and customer management capability. At Co-op, it’s part of the strategy to be there for customers when it’s convenient for them. The tools Co-op uses are designed to predict the customer’s intent and proactively present useful information so agents can provide customers with what they need.

Successful CX in retail is about giving customers more reasons to choose you over the competition, said Carroll. “If the experience exceeds that expectation, you’ve reinforced their decision to trust the brand — they then feel invested. They feel good about themselves because they’ve made the right choice.”

2. Retailers are empowering agents with training and technology

Retail CX leaders said their CX headcount has increased about 22% over the past 12 months — they expect about the same (23%) over the coming year. And, because motivated and productive staff is essential to provide high-quality customer experiences, they’re prioritizing workforce training and engagement. Yet, CX leaders agreed that two of their greatest CX challenges include maintaining staff engagement and service quality and keeping staff continually trained on new tools and protocols.

In addition to their learning and development programs, retailers are providing myriad contact center technologies to make agents more productive and effective. CX leaders in retail are prioritizing a single point of system administration and screen pops to provide customer information to agents as the most valuable features for improving CX. Nearly 70% of these leaders in retail also consider agent assist technology and real-time monitoring and alerting as valuable technologies for increasing customer and employee satisfaction.

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There’s still an opportunity for retailers to more closely align service priorities with customer preferences. When asked what’s most important in a service interaction, consumers select FCR and a fast response.

Retailers, on the other hand, prioritize professionalism and friendliness. Just 37% of surveyed retail CX executives selected FCR as a service criterion that their organization values most — there’s a significant gap to close. Improving self-service options, such as chatbots, better integrating digital and voice channels, and using smart routing to match customers with the right agents are ways retailers can improve FCR.

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Key takeaway

Focus on training and engagement: CX teams have been through a period of immense change, both personally and professionally. Almost two-thirds of survey respondents said headcounts are growing, and they’ll add contact center seats this year. It’s essential to also focus on training and workforce engagement to empower these teams to deliver exceptional experiences.

Prioritizing the Agent Experience

TechStyleOS is the globally integrated operations and services provider behind several well-known membership-based clothing and shoe brands, including Fabletics and JustFab. Employee experience is integral to the company’s success strategy.

The pandemic-led shift to working from home gives TechStyleOS member services representatives a sense of empowerment. “Agents have demonstrated, with the technology that’s available, we can remain connected to our teams, to our team leaders. We can give our members the exact same customer service. There’s no downside to the work that we can do,” said Jack Roberts, Director, EU Planning and Technology at TechStyleOS.

To further empower its staff, the company has moved away from the traditional workforce management approach of shift-pattern scheduling to a dynamic approach where agents submit preferences, such as requesting not to be scheduled for a specific day rather than using paid annual leave to secure time off. “We saw a big jump in agent retention when we switched to that model,” Roberts said.

TechStyleOS agents are involved in decision-making about workflow technologies, rather than being recipients of the tools developers think will work best. “We hold regular focus group sessions to get input and ideas around how they want the tools to be developed, and what tools they want to see changed moving forward,” Roberts said. “We’ve definitely seen a positive impact around that.”

The company also focuses on continuous learning, providing agents with an artificial intelligence (AI)-based eLearning system that guides them through modules and allows them to repeat lessons. “Agents have more opportunities to learn and repeat. There’s never a possibility to pass once and then it’s done. There’s always a retest a couple of days later, to make sure it really settles in,” said Henry Hildesheim, EU Director, Member Experience and Site Operations at TechStyleOS.

Hildesheim added that the team is planning another AI-led learning initiative, which will provide training recommendations based on an agent’s performance scorecard. “Depending on their results, agents receive suggestions on what lesson to repeat, and which information to double-check and re-read to make sure they’re on the right level with their skills.”

3. There are untapped opportunities for personalization

While some retailers are lauded for their personalization prowess, many others have work to do. Retail CX leaders cited two data-focused priorities among their top initiatives: using data and AI for customer understanding and personalization; and enhancing data capabilities for analytics and reporting. At the same time, they’re grappling with managing data privacy and compliance while also managing increased contact volume and channel complexity, which they cited among their leading challenges.

When done properly, personalization presents opportunities for customer engagement and revenue growth. About 80% of consumers today said they’re likely to purchase additional items, make recommendations to friends and colleagues and devote a greater wallet share to companies that consistently personalize their experiences. This is an increase of about 10% over 2017.

Retail CX leaders are lagging in personalization. Just 39% said they’re delivering highly personalized experiences, less than the cross-industry average of 44%. At more than a quarter of surveyed retail organizations (27%), the customer experience is still “somewhat” or “not at all” personalized.

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As much as consumers value personalization, they also value data privacy. Consumers are willing to share their data with companies, as long as it leads to more empathetic, personalized and relevant experiences. More than 50% said they appreciate it when a business tracks their purchases to anticipate their needs and provide a personalized experience.

At the same time, data privacy/protection is the number one ethical, social or environmental issue that consumers — and businesses, including retailers — care about.

Key takeaway

Break down data silos: The top two strategic initiatives for CX functions in 2021 relate to data: using data and AI for customer understanding and personalization; and gaining deeper insights and driving performance improvement. However, organizational silos that prevent data sharing are barriers to CX success. Businesses must break down those silos to gain a full perspective of the customer journey, as well as the effectiveness of distinct interactions.