2023 will continue to come with challenges for the retail industry. One that remains front and center is recruiting and retaining customer facing employees. While 223,000 jobs were added in the U.S. in December, the retail industry continues to struggle. In our most recent research report, The Future of Retail Customer Service, the #1 barrier to delivering stellar service is talent. In the same breath, we are seeing layoffs at many DTC brands, as well as at some of the biggest retailers, such as Walmart, Amazon, and Gap in their corporate offices. But getting talent in the stores and in their contact centers is harder than ever. As evident, Walmart just raised their minimum wage by $2 and have over 30,000 open positions in their stores as they compete for people.
The economic uncertainty and contradictions that continue to surround the industry make it hard to predict opportunities and challenges retailers must navigate. Recent retail forecasts predict U.S. sales will rise by less than 3% this year, continuing the spending slowdown we’ve seen over the past year. As long as inflation continues, consumers will get less with equal spend. Share of wallet is harder than ever to gain as customers are faced to make tough decisions on where they spend their money. Additionally, consumers are focusing more on financial security — with 79% planning to re-evaluate their budgets in 2023. That means creating meaningful connections with your customers is more important than ever.
Given the shortage of customer facing employees, leaner corporate teams and continued performance pressures, brands must be strategic about where they invest to ensure they effectively take care of the customer and meet them where they are. Spending on CX technology remains a top priority to: get efficiencies at scale with AI automation and analytics; create frictionless customer interactions across all channels; and provide customer facing employees the tools they need to deliver personalized service.
Priority #1: Gain a 360 view of the customer
Creating interactive, personal, and memorable customer experiences requires a unified view of the customer. Retailers have been slow to collect data and adopt technologies, like customer data platforms (CDP), that bring together all customer interactions. Even without a CDP, they are still missing so many opportunities with data they aren’t collecting. In our report we found 79% of retailers don’t capture data on customer sentiment, while 57% are not using data to personalize future service interactions or marketing outreach.
Collecting and using customer data is one of the top five most significant barriers to retailers achieving customer service goals. Without it, retailers are unable to tailor interactions and not only be proactive in their engagement but also anticipatory. Forward-thinking retailers are starting to utilize tools like interaction analysis and real-time experience sensors to gain immediate insights that can drive faster resolution of customer, product, and supply chain issues. With that wealth of information, retailers can design a personalized journey that makes each person feel like a valued customer, not just another number, building strong relationships and ultimately brand loyalty long term.
Priority #2: Meet your customers where they are
It used to be so simple to help your customers as you had two channels to do so: stores and phone. Then came email, and in the last fifteen years, there has been an explosion of channels, such as mobile apps, chat, social, marketplaces, live shopping and now the metaverse.
One could argue, we’ve reached the next inflection point in the evolution of shopping and service, as augmented reality (AR), artificial intelligence (AI), the metaverse, and other technologies are entering the picture. In fact, our “Connecting in the Metaverse” report found that consumers are already tapping into the metaverse for retail experiences – with one in four already purchasing a virtual item (26%) and another one in five using the metaverse as inspiration to purchase a real-world product (21%).
Retailers must design a strategy that takes their service proposition from being transactional and reactive to a minimum of being conversational and proactive. The reality is they also need to be thinking about interactive and immersive service. It’s time to break the mold and engage differently. Take Best Buy as an example. Following its launch of virtual stores, the brand saw a 20% increase in customer satisfaction, highlighting consumers’ desire for interactive experiences.
The good news is that retailers are thinking differently and investing accordingly. Our report found that over the next two years, investments in voice will decrease by 25% and email 22%. Conversely, investments in voice based virtual agents will increase by 56%, live streaming by 55% and the metaverse by 79%. Furthermore, one in four retailers (24%) plan to deliver consistent, interactive engagement via next-generation channels like the metaverse and support AR / VR interactions within two years and 12% say they are already doing it today.
Priority #3: Create a CX community
With fewer employees available to field customer questions and customers’ growing need for support in making decisions given the seemingly endless amount of choice we have today, retailers have the opportunity to go beyond product reviews and expand who is involved in delivering CX. Traditionally, contact center agents and store associates have been the main line of defense for questions on products and services. However, consumers are looking beyond customer-facing employees, using influencers and ambassadors to create meaningful customer interactions. Customers still want to engage with store associates for service (51%) and contact center agents (42%); however they now seek support from brand ambassadors (38%), influencers (38%) and other customers (16%), too. What does this mean for retailers? It really does take a village – and it’s time brands leverage these different resources and think beyond just the four walls of their stores and contact centers
At the end of the day, the voice of the customer should be the guiding light of all decisions. To achieve this, retailers must invest in richer, unified customer data; new channels and platforms; and emerging technologies, like AI. At the same time, they must think more broadly about who creates happy path experiences for customers. The biggest surprise and delight of our research report is that only 19% cited reducing costs as the primary reason for investment in CX. There is hope that retailers are finally recognizing the link between poor CX and lost sales, and the radiated sales they have due to good ones.
The post As Retailers Brace for a Potential Recession, CX Investments Are More Important Than Ever first appeared on RETHINK Retail.View Original Article