Over nearly three decades, Internet shopping has ushered in many changes to the retail landscape -- one of which is that a growing number of product categories are now commoditized. Whereas previously, shoppers wishing to comparison shop had to travel physically to other stores, or seek out new catalogs, now it’s easy to find multiple sources for even hard-to-find or niche products, all with a tap on a smartphone or click of a mouse..
Some brands have responded to this widening competition by lowering prices. But as mass merchants such as Walmart and Amazon move to the front of the pack with steep discounts, inexpensive private-label offerings, and free shipping, the race to the bottom is fast becoming a losing proposition for smaller retailers and brand manufacturers.
A more sustainable approach is for brands to make customer service -- or, more broadly, the customer experience as a whole -- their key differentiator. Not only does building service, rather than steep discounts, into the core of brand identity avoid eroding margins; but by promoting responsive, thoughtful service that complements their unique product offerings, brands demonstrate their expertise and position themselves as authorities within the category.
Furthermore, consumers acknowledge the value of the customer experience, and are willing to pay for it. Consulting firm PwC found shoppers are willing to spend up to 16% more for a positive customer experience, and 73% said the customer experience influences purchase decisions, beyond product quality and price.
For these reasons, four in five companies predict they’ll be competing primarily on customer experience by 2020, according to research firm Gartner. But investments are still lagging behind this expectation: For more than half the companies surveyed by Gartner, customer experience budgets were set to remain flat or drop. And just 10% of firms told PwC they were prioritizing improvement in customer experience in 2017, a drop of 60% from the prior year.
As a result, the opportunity is still ripe for brands to seize the lead when it comes to stellar customer service and customer experience. In 2020, merchants who make service a central brand offering will start to pull away from the competition -- a trend that will snowball in the coming years.
The offerings brands used to consider “valued added” -- from personal shopping services to product how-to videos to special events -- are increasingly essential components of the customer experience. As they head into 2020, sellers should devise new ways to build service into their core offerings and prioritize frictionless execution across touchpoints. Among the to-dos:
- Boost investment in new services. Whether in the form of one-on-one stylist consultants, planning or design apps, or installation and assembly helpers, merchants should think creatively about how they can enhance their product offering in ways that appeal to their core audience. Sur La Table has transformed from a supplier of kitchen wares to a home chef resource, thanks to in-store programming that includes classes, product demos and test drives, and specialized services like knife sharpening. Online, shoppers can browse recipes and how-to videos alongside buying guides and gift recommendations.
- Reward loyalty with exclusive access to services. As they develop new service-centric programs, brands should integrate a top-tier offering for loyal customers that can serve as a rewards perk. After-hours access to stylist or personal shopping services, a dedicated rep to handle questions and orders, discounts on events, and sneak peeks at new collections before items go on sale to the general public can all encourage loyalty and enhance the appeal of membership in rewards programs.
- Support offerings seamlessly across touchpoints. Once service offerings are in place, merchants should adopt a channel-agnostic approach to delivery and execution, and test rigorously to ensure smooth online/offline transitions. Processes for picking up and returning orders in-store should be frictionless; signups for events via mobile devices shouldn’t involve too much keyboarding on small screens; and live chat events with style consultants must be able to accommodate anticipated traffic -- and then some. Target’s recent rollout of remodels for 1,000 store outlets is designed in part to make store pickups easier to navigate, and store staffing has been adjusted to include more fulfillment-oriented roles, according to Modern Retail.
You can learn more about the customer experience and how automating the shopper experience can engage your customers at every touchpoint by exploring Linc’s platform and solutions pages. Or take a look at how leading brands like Lamps Plus, Levi's, Carter's and others are using an automated customer assistance platform as part of their customer experience strategies in their businesses today, in our resources page.