Customer Experience In A Digital World
“Department store owner John Lewis Partnership is launching an ambitious foray into the world of e-tailing with the purchase of the UK arm of buy.com.” (BBC, 2001)
One of the many industries turned on its head by the advent of digital technology is retail. It’s easy to take it for granted now that we can order a new phone case while on the bus home and have it delivered the next day. But online shopping has also drastically changed the power dynamic of traditional shops, forcing them to adapt or go extinct. As you would expect there have been winners and losers on both sides of the till, and this is what we will examine now.
What is online shopping?
For anyone that’s unsure on the exact definition of online shopping, it means to buy goods or services over the internet. Think of it as a natural progression of the mail order catalogue. Remember those? Online, shopping is everywhere, and sometimes it feels hard to get away from it. In 2016, 83% of individuals in the UK purchased something online.
So why is it so big?
There’s undoubtedly many reasons why people turn to online over going to a traditional store. Internet access in the UK is very good, with a study in 2016 finding that 87.9% of adults had used the internet within three months. It’s hard to know the exact number of online retailers, since they can be located anywhere in the world, but it’s a lot. As I’m sure you know, Google “holidays in Spain” and you will be overwhelmed with choice. So we have a big supply of potential consumers, and a huge number of sellers. It’s natural that online shopping would take off, and this can be seen by the fact that in 2016 we spent £133bn online.
What do people think of online retail?
Despite its popularity, perceptions of shopping online vary greatly, particularly between age demographics. This study conducted in America, found that 64% of Americans still prefer buying from a physical store. This was down to a variety of reasons. For example, people often like to ask questions before buying a product for the first time (84%), and try the product out in person (78%). Online retailers have attempted to resolve this obvious issue by allowing customers to post reviews. While this tactic does increase accountability, many people are suspicious about the authenticity of reviews.
Fake reviews are a systematic problem, and although some companies, such as Amazon are actively combatting the it, it is difficult to know the scale of the problem. The cause of these problems seems to boil down to the issue to being physically separated from the store. When you buy, you probably won’t speak to a human unless something goes wrong, and this is unlikely to change.
Another reason people may be hesitant to order online is the threat of having their personal data compromised. A data breach is where attackers access the data of customers/ employees of an organisation, and since retailer’s store bank and financial data they can be very lucrative. For an affected individual, a data breach can vary from inconvenient to life destroying. For example, this year Wonga.com lost the personal data of nearly a quarter of a million customers to attackers. The data accessed included names, addresses, phone numbers, bank account numbers, sort codes and the last four digits of card numbers. This is a big risk for retailers as an event like this could end them.
What Are The Benefits Of Being A Customer In A Digital World?
Whether you buy online or instore, technology facilitates a much higher level of brand interaction than would have been possible before. This brings mutual benefits for customers and retailers. For example, brands frequently use social media to create a positive image which in turn increases customer loyalty. As an example, many make up companies have YouTube channels which give tutorials on the best way to use their products. Obviously, this benefits us as customers, who can now expect more than just the physical product we purchase.
Brands are now much more accountable than they could have been before digital technology. Social media means brands not only have to interact with customers, but respond and react to complaints in a public forum. Nike Support @NikeSupport is a great example of how brands can use social media instead of traditional customer support methods. Nike are particularly good as they respoind very fast, increasing their reputation. It also makes the company transparent to customers.
<blockquote class=”twitter-tweet” data-lang=”en-gb”><p lang=”en” dir=”ltr”><a href=”https://twitter.com/rtttepe">@rtttepe</a> We hear you, Riza. We will pass your feedback along to our team, let us know if you have any other questions.</p>— Nike Support (@NikeSupport) <a href=”https://twitter.com/NikeSupport/status/849275744589152256">4 April 2017</a></blockquote>
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<blockquote class=”twitter-tweet” data-lang=”en-gb”><p lang=”en” dir=”ltr”><a href=”https://twitter.com/rtttepe">@rtttepe</a> You got it.</p>— Nike Support (@NikeSupport) <a href=”https://twitter.com/NikeSupport/status/849284912553349121">4 April 2017</a></blockquote>
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An interesting side effect of online retail is that traditional stores have been forced to adapt to retain customers. Opening on more days and staying open later to increase convenience has only benefitted us as consumers. Another addition we see in many shops is tablets or catalogues with the entire range of products, which means if we can’t find something in store, we can have it ordered for us. Finally, click and collect means we can order online and pick up from the physical store, eliminating any worry about missing the delivery. These extra services offered by stores also mean more hours available for employees.
And What Are The Drawbacks Of Being A Customer In A Digital World?
As we all know the high street has suffered from the digital revolution. This comes from the fact that traditional shops in town centres need to pay heavy business rates for their location, whereas online retailers with warehouses do not. So, what does this mean for us as consumers? Banks closures can be a big problem for certain members of society, with more than 1,000 closures in the two years leading up to December last year. If you’re reading this you probably at least understand online banking, but plenty of people don’t. In the USA, only 18% of over 60’s use online banking. As more of us move online we risk leaving people with no access to vital services like banking.
Another, less obvious issue that has come about through online retail is that a lot of retail power has become consolidated with a small number of internet giants like Amazon and The Hut Group. With 16% of the market share for UK online retail Amazon is the largest online retailer. If you’re wondering who The Hut Group are there’s a good chance you’ve bought one of their products even if you didn’t know it. So why would having a small number of retail giants be a bad thing? Having such a large market share gives these companies access to data, and data can be used for differential pricing. Differential pricing means displaying different prices for the same product based on the likelihood the customer will buy it. While many companies claim they only use differential pricing to discount and not to overcharge, we would be unable to know. Moreover, on a personal level, this just seems wrong.
How Have I Developed Through The Digital Society?
I am a computer science student and love technology. I regularly go to talks on the latest developments and follow several tech blogs and YouTube channels. Before taking The Digital society, I had never considered the social impacts of new technologies. To me, progress for the sake of progress was enough of a justification to push a new technology to the public. The Digital Society has made me realise that there are always winners and losers when we make “progress”. For example, Topic E made me realise that all the free services I take for granted like email and social media need to make money from somewhere, and that somewhere is our personal data. Topic B also made me think about the role of marketing in the technology industry, especially when discussing driverless cars in Topic F. Driverless cars are something that no one realised they “wanted” until we were all told how safe and convenient they could be. Since the personal computers of the 1970’s, technology has been pushed to consumers to fill a need that we never knew we had. Studying The Digital Society has made me question whether this is actually a good thing.
More than anything, I really enjoyed studying this module. The Digital Society has forced me to work on a different set of skills to what I am used to. Writing a blog post is something I have never had to do before, and I found it challenging to write for a general audience, and not specialists and academics from my field. Another great skill I have learned from studying this module is correctly attributing other people’s material. Before taking The Digital Society, I had never had to do this before. Digisoc 1 & 2 taught me about licencing and finding images I’m actually allowed to use, as well as attributing other people ideas. Attributing other people’s contributions was never something I thought was necessary before, but now I realise it’s only fair that people get credit for their ideas.