Customer Service in Disrupted Retail

Feb 24, 2016

I had a conversation today with the multi-talented content marketer of Vend University, Reese Evans. She is also the creator of an amazing brand called Yesupply, that caters to empowering and motivating female entrepreneurs, mompreneurs and the increasingly common freelancers who choose to work from home. Not to mention the small business owners, the “fempreneurs”.

Reese got me thinking about how customer service has changed so much from even 5 years ago. This article will take a closer look or snapchat at customer service in Retail, as part of my #marketingtrends series.

Digital Natives have New Expectations

As digital natives (sometimes called) Millennials gain more buying power and their younger siblings whom I call iGen (sometimes called Gen Z) start to graduate college and get their first jobs and as their inherit the family’s incoming from aging parents there’s a new kind of consumer that retailers have to adapt to.

Digital natives are not just breaking the ceiling on ecommerce and mobile search, they are changing how store visits occur, and altering the retail in-store landscape of what customer service itself means. Retailers are noticing a new premium on creating interactive branding experiences that merge omnichannel, digital touchpoints with customer experience and customer service.

  • Digital native consumers require a new kind of branding that keeps them coming back, whatever the channel.
  • Local retail entrepreneurs already know the secret, cater to their lifestyle interests and offer them educational opportunities in every customer service interaction.
  • Adopt a new breed of loyalty marketing that builds customer experiences embedded into loyalty rewards programs powered by customer analytics and value segments.

Social Media Channels as Customer Service Opportunities

Every interaction on Instagram, Facebook, Twitter and Pinterest is with a customer is now a potential customer service opportunity for retail brands to shine in demonstrating that:

  • They care about their customers.
  • They are relationship orientated and not just transaction/profit orientated.
  • That their brands stands for values digital natives can appreciate (giving back, corporate social responsibility, interactive content campaigns, i.e. gamification).
  • Adopting a loyalty rewards program capable of adding loyalty points to a customer profile due to their online brand advocacy.

Retails must Engage in Digital Customer Experience Optimization

Let’s face it, shoppers check their phones 200+ times a day and even search your products while shopping in your physical retail space. Every digital touch point of your brand with your customer, then becomes and has the potential to be a customer service interaction.

Digital natives aren’t known for their brand loyalty but do favour independent retail brands that can differentiate themselves uniquely online and demonstrate a creative and active interests of channels that their younger customers are on. If you are a independent retail brand in female apparel for example, these are Instagram, Pinterest and Snapchat.

Social Authority Matters to Millennials

A good example of this is a shop called Calico, they display a whispy 16k tweets on Twitter, 3.6k posts on Instagram, 3.4k pins on Pinterest and the presence of a YouTube channel, tells me this is a brand that is

  • Passionate and cares about consumers
  • Is creative and pro-active on channels its audience values
  • 16 + 3.6 + 3.4 =

23 THOUSANDS REASONS

to care about this brand.

They have ecommerce, so this implies customer service online will be a major part of their business. As a digital native, I choose the channel. Great if there is an IM chat on their website, but I expect them to reply to me immediately on any channel I use.

Of course, it takes someone who cares to do digital branding this good! Even the personal brand of the store owner CONTRIBUTES to how I will relate to this brand. Elissa Paquette, is an authentic person on social media by all quick digital measures of the good ol’ digital first impressions.

As a digital native will I care their Facebook has 5k likes or that there is a 4.6 out of 5 rating, probably not. It’s apparel so I’d be interested in them on Instagramand Pinterest most of all. Bonus points that the store owner did a BFA, something for a digital native is relevant to the kind of brand they are supporting. Being a unique person and running an authentic online reputation management (aORM), is actually a perk to digital natives!

What I am trying to illustrate here is that for digital natives branding is personal!

Branding & Customer Service are Merging

For many independent retail entrepreneurs it used to be all about physical location. While this remains true in some respects for walk-ins, digital touchpoints for consumer reach means your branding pervades everything you do.

Disruption in retail necessities the adopting of:

  • Cloud POS solutions
  • Marketing automation via SMS and Email, ideally integrated with your Loyalty Program.
  • A retail store technology infrastructure that will be able to scale with machine learning APIs and IoT integrations of the future.
  • More use of interactive and educational content online, mainly video and visual content marketing that’s fresh, authentic and puts the customer in the driver’s seat!

For a digital native, they want to receive a text that can be replied to by an actual human beings, not simply a no-reply Email that may as well be spam.

For a digital native, your entire brand has to be seamless and interactive with all the benefits of technology but with the human touch.

What does the Consumer Want?

According to industry research, consumers and shoppers want a way to:

Minimizes uncertainty and inflexibility while maximizing efficiency, convenience and pleasure!

Does that not sound like what we know about Millennials?

The noted retail centric disruptors are:

  • Evolution of the store
  • Mobile Technology
  • Social Networks
  • Demographic shifts (socio-economic squeeze)

All of these have bearing on how retail brands do customer service.

Physical Store is Still Dominant

Brick-and-mortar (B&M stores) still account for over 90% of purchases and remain the central “fun” of shopping. And why would they not be? We are sensual beings and want to touch and spec out what we buy.

In a given week, an international shopper will:

  • 36% go to the physical store at least weekly
  • 20% shop weekly via PC
  • 11% shop weekly via Smart phone
  • 10% shop weekly via Tablet

The customer experience is then taking place in a snapshot of your brand that has to be mobile responsive and where the CX and CS (customer experience/service) has to be seamless.

Where does it go if they have a question at one of these touchpoints? That is how customer service is taking place circa 2016.

Customer Retention

If bad customer service and poor mobile optimization can be a deal-breaker for digital natives, what else can retain them?

  • Memorable and sentimental brand defining moments or delightful shopping experiences.
  • A loyalty rewards program that’s more intimate with a greater degree of personalization (not just another loyalty card)
  • More convenient ways to buy (e.g social commerce, click-and-brick, loyalty points accelerators that relate to digital experiences)

Layers of Customer Service

For consumers each layer of experience informs my cumulative concept of what your brand is, they are inclusive of all channels:

  • What my peers think of you
  • What influencers I respect think of you
  • Your physical store experience
  • Your customer experience at your store
  • Your website, social media and customer service online!
  • Your rating on review sites, Facebook, Yelp, Foursquare, whatever.
  • Your video content online if any that will actually hold my attention.
  • If I can respond to correspondences I get from you: SMS, Email, iBeacon push notifications, whatever.
  • How much your in-store employees know about me (are they being informed by your so called retail technology?)
  • Have you created branding moments of emotional worth to me to be loyal to your brand and even possibly create online advocacy in support of your brand?

Increasingly digital natives trust consumer created content, and not the false advertising brands like to promote. The move to a more personal, authentic and intimate branding has arrived, making a lot of advertisement, sales-centric amplification of branded messages, either obscene or totally ignorable to younger consumers.

What are Retail Brands Doing with Mobilegeddonon

As mobile devices and soon wearable devices and voice activated sensors on all devices that will be moderated by companies like Houndify. Voice relay to personal virtual assistance (PVAs) will become mainstream as the cloud merges with IoT.

Smart retailers are then on boarding existing customers to:

  • Ecommerce
  • Loyalty programs that are intelligent and can adapt to the new era of Retail Technology (i.e. they are already API based SaaS that are “add-ons” to cloud POS).
  • Implementing triggered, transactional and marketing automation that’s still branded by the retailer themselves.

Keep in mind as personal virtual assistants become the new “shopping assistants”, how they respond to voice command and interact with your store’s location will be as important as SEO is to how Google works. We are already noticing how SEO is going more in the direction of Q&A content.

Social media networks and mobile devices are no longer new! Smart retailers won’t be in reactive mode, they will be leading the charge by being early adopters of the creation of smart spaces and serious user-generated-content campaigns. In 2015 these were no longer fringe, but mainstream.

With the crash in early 2015 of big-box retail physical stores, and evidence of the epiphany that is mobile commerce, the times they are changing! You’ve made heard of the Chinese giant Alibaba, single’s day is a big deal in china.

The volume of Alibaba’s sales, for example, made via mobile on Single’s Day in 2014 totaled 43% of the company’s $9.3 billion in sales

If your customer service of your retail brand isn’t smart-phone and mobile IM friendly, you have a serious problem because:

Moreover, just 39% of our digital natives said they never shop via their smart phone, while 56% of other age groups said they never shop via their smart phone

Customer service has to permeate the channels global consumers actually use:

Click and Brick Paradigm

Smartphones make researching products easier than ever, picking up products in-store is twofold, saving shipping $ and checking out the merchandise. It’s also well, just more fun!

There’s no imminent demise of physical retail, because it’s convenient and provides the core features of the shopping experience. To imagine that an institution like the store would “disappear” entirely when it’s been around since the dawn of time, is pretty absurd. It is changing and it may one day become “endangered” if we keep up our current pace of digital and transhumanistic adaption.

Until then, we are still potentially spiritual beings having a material experience. Retail technology promotes better customer service and defining customer experiences and the seamless nature of it should be easy and not cause friction to the consumer in any way.

The purchase journey and each segment of it, is still inherently a social experience. I’m seeing your models, I’m seeing other customers, I’m interacting with staff, I’m bathing in the culture of your brand, either offline or online.

For digital natives, there is no difference between online and offline.

In the real world:

Top Reasons to shop online:

  1. No replicable products in physical store (this used to be the case with Amazon)
  2. I can shop 24/7 online
  3. No need to travel to a physical store

Top Reasons to shop at B&M:

  1. I’m able to touch, see and try merchandise
  2. To get the product immediately (haha no drone delivery necessary!)
  3. I’m more certain about the suitability of the product.
The purchase journey and each segment of it, is still inherently a social experience.

For customer service, the critical buying moment is therefore more likely to occur in-store! So the training of customer service agents in-store is one of the key variables Retail can influence that has a profound impact upon the customer experience.

This is perhaps common sense.

For B&M / Physical Retail

In reality click and brick and brick and click are equally important:

  • Therefore, “customer service” must be available at EVERY touchpoint. How annoying is it when I’m at a store and can’t find an employee to talk to when I have a question, the same goes for being “struck and stranded” and a digital touch point.

Amazon, famously, last year opened a show rooming store in Seattle. It’s ironic then that native ecommerce brands with the data science experience have a lot to teach big-box retail that’s not as smart!

Independent retail entrepreneurs and store owners have to emulate what works at the enterprise levels of retail and create the microcosms of those lessons. There are a variety of reasons a giant like Amazon rose to such prominence, which I will deal with in another article.

While 68% of our global sample say that they have browsed products at a store (brick and click) but decided to purchase them online, 70% of a global sample base said that they have done just the opposite (click and brick)!

It’s no great surprise then, that Millennials enjoy click and brick. It’s intuitive and totally expected.

  • Reverse Showrooming = click and brick
  • Show rooming = brick and click
What are the customer service opportunities for human intervention and interactive branding moments that impact the customer experience in Showrooming and Reverse Showrooming?

I will end this article with a few timely infographics, I hope you enjoyed the article!

  • China is the world leading in mobile penetration
  • Click and Brick is just damn useful!
  • Populations like India & Africa are actually getting younger! Guess what they prefer?
  • Consumers are getting used to the data-centric age of customer information & customer analytics optimization (it’s just the beginning!)
  • FinTech is ready to disrupt financial transactions and retail imminently (boom started in 2015 for VC funding of FinTech)
  • Customer service permeates every layer, every interaction point of a retail brand. It’s the basis of the “human” aspect of the customer experience.
  • You can never do customer service perfectly, you can never help the customer enough at the right moment.
Retail technology & digital channels have never been implicated in customer service, as much as they are in 2016.

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