When does technology enhance customer experience?

By | News, Retail

Using in-store technology to inspire customers is not as important as may be expected, IG&H concludes from a survey conducted among 2000 Dutch consumers. “Technology can further enhance customer experience but the right ambiance and personal attention are still decisive”, say retail consultants Joris de Bruin and Evelien Kip.

It is key to understand how great or poor customer experience influences your consumer’s behavior and your success as a retailer”, De Bruin explains. To provide retailers with more in-depth insights about the latest trends in retail, IG&H is going to publish regular updates. This research about customer experience is the sum of all online and offline interactions with a retailer’s products, services and brands.

“We see a lot of buzz around augmented reality, AI and mobile payment, but the effect of these advanced technologies on customer experience is (still) very limited if it does not contribute to ambiance and personal attention. Don’t bother to start using advanced in-store technology or social interaction experiments to improve customer experience, unless you have these basics right”, he says.

 

Personal attention is most appreciated

70 percent of the customers surveyed said to value personal attention most in an offline store. A good in-store ambiance is appreciated by 60 percent. Almost half of the respondents enjoy an element of surprise. “Think about ‘tokens of appreciation’ such as free demo products, gifts, additional services or just a sincere compliment or thank you from the staff”, Kip says.

Getting the basics right is key in creating a great customer experience

This does not mean that retailers can ignore technology completely, she explains. “Contactless payments, apps and self-scanning definitely contribute to the customer experience, but should further improve personal attention, design and ambiance. Retailers often forget about further educating and developing well-trained employees with a relentless focus on the customer.”

As a good example in this field, she names Coolblue with their XL stores. “A warm welcome awaits from a dedicated employee once you enter the store. Based on your needs, you are guided directly into the right customer journey”.

To create an excellent in-store ambiance, Kip advises on creating a multi-sensory experience, like the smell of fresh bread in the supermarket. “A great example is the Jumbo Foodmarket concept: extra wide and clearly classified isles, decorated with culinary elements speak to the imagination during your journey to the counter.”

A tailored approach to the online customer experience is required

In the online world, ambiance (or design) is most important, according to the respondents. “This can be translated into providing a user-friendly website with an appealing design aligned with the brand’s image. Contrary to the offline world, personal attention is not a must-have for a great online customer experience. We believe this is heavily linked to a shopper’s mindset and goal. Online shoppers often want a quick, easy and more anonymous journey”, Kip says.

Great customer experience transforms customers into brand ambassadors

IG&H Retail consultants focus on helping retailers to remain relevant. “Being relevant to your customers should be the key objective”, De Bruin observes. “Relevance can be achieved through successfully aligning your organization’s purpose and proposition with your customer’s expectations. It requires a connection with your customers on an intrinsic level, they need to be able to identify themselves with your brand. Key to this is providing them with a great customer experience that exceeds expectations.”

Loyal customers will act as true brands ambassadors

If a retailer succeeds, customers return more often, tell their friends and family about their experiences, and tend to buy more, leading to an increased revenue. Margins are not that easy to improve, as customers are not willing to pay more for the same products or services while having a great experience.

“A poor customer experience impacts everything, from the bottom line, to loyalty and reputation. It will make your brand less relevant and eventually lead to ending up in the retail graveyard. Retailers who put their time and effort into providing personal customer attention at the highest level possible and constantly create a pleasant ambiance, will create loyal customers who act as true brands ambassadors”, he advises.

Curious about how Dutch retailers score on customer experience? We will announce which retailers are the winners and which ones need to pay more attention to it soon.

Action and Bol.com are still more relevant to Dutch customers than their foreign challengers Amazon and AliExpress

By | News

“The retail graveyard is full of brands that were once relevant, and the owners or management have let them become irrelevant to their customer. They didn’t move on.” (Andrew Jennings)

Being relevant to your customers should be a key objective for any retailer. Customers have ever increasing expectations and find it much easier to switch between brands and retailers. In order to become or remain relevant, retailers need to exceed customer expectations and secure a place in the daily life of the customer.

Being and staying relevant is more complex than it seems, and many retailers question themselves how they could achieve this in practice. In this article, we will share a few key insights on how to become more relevant to customers, based on our own experiences at retail clients and a recent study amongst Dutch customers.


Consumer relevance

We can broadly distinguish 3 key elements that contribute to the concept of being and staying relevant:

  • Purpose – the retailer’s reason for existence. This is where the company stands for and describes the key message it wants to convey.
  • Customer expectations – the ability of the retailer to fully understand the expectations and needs of their specific target customer
  • Proposition – the actual touch points with customers; encompassing a clear and distinctive set of products and/or services offered

Relevance can be achieved through successfully aligning purpose, customer expectations and proposition. Aligning the purpose and customer expectations requires connecting with your specific target customers on an intrinsic level. This means that customers need to be able to identify themselves with the purpose through shared values and objectives (self-identification).

The purpose should be substantiated by the actual proposition, and both need to match the customer’s expectations. In cases where the three elements are misaligned it is likely that the retailer is either offering products/services customers do not really need or customers are unable to identify themselves with the brand, resulting in less relevance.


 Relevance in practice: the Dutch retail market

To further illustrate the concept of relevance we applied the model to a selection of key (online) retailers, supported with data from our study. We asked 450 Dutch customers why they shop at these retailers and whether they would recommend it to others. Results show that customers reward Action and Bol.com with the highest Net Promotor Score (NPS). Amazon, AliExpress and Blokker are less recommended by the sample group and close the ranks.

NPS NL
The Net Promoter Score (NPS) is a method to measure customer satisfaction and loyalty. The higher the score, the more satisfied and loyal customers are. The NPS is based on the question how likely it is the customer would recommend the brand/retailer to others.

Let’s take a more detailed look at what contributes to these scores:

nps bol.com ’De winkel van ons allemaal’
(Everyone’s store)

Bol.com is the leading online department store in the Netherlands. With an assortment of over 15 million articles and a fast and reliable fulfilment network they uphold their claim to be the ‘store for everyone’. Our study results confirm that customers recognize and value precisely these two aspects: broad assortment and fulfilment, and therefore award Bol.com with a high NPS score.

Bol.com is currently working to expand their fulfilment proposition called ‘Select’ by adding more products and fulfilment options, like same day- or Sunday deliveries. We are interested to learn if and how this will further strengthen their position in the market and whether it will be appreciated by customers and if it will translate into an even higher NPS.


NPS Action ‘Verrassend volledig, verbazend voordelig’

(Surprisingly complete, amazingly cheap)

With over 1150 stores in seven EU countries Action has shown exponential growth over the past few years. Since day one their ambition is to surprise customers with a broad and continuously changing assortment for the lowest possible price.

Results from our study confirm that customers find price and assortment the two most important reasons to shop at Action and award them (together with Bol.com) with the highest NPS.

Action continues to grow in Europe, supported by new distribution centres. In addition, they are looking to expand their assortment with sporting gear, becoming a competitor to the ‘to-beat’ Decathlon in that segment.


NPS Blokker ‘De verrassend slimme huishoudwinkel van Nederland’

(The surprisingly smart household store of the Netherlands)

According to their website: “Blokker has a wide and complete household assortment, with the best pre-set choices in relevant Premium brands and a complete range of smart private labels, surprisingly cheap prices and promotions.”

Over the past years, Blokker has been struggling to reinvent its proposition, and is currently trying to catch up with the competition. Looking at their proposition, one could notice that Blokker is concentrating on both assortment (premium- supplemented with low-end and private labels), low prices and promotions. This could make it difficult for customers to really identify with- and understand Blokker’s purpose; what do they really stand for? Our study confirms the lack of a clear focus as customers did not convincingly recognize any of these elements as typically Blokker.


NPS Amazon “Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”

 

Amazon, the world’s largest and one of the most innovative retailers is continuously in the news with new offerings, technology and game changing ways of doing business. The success of their ‘Amazon Prime’ proposition is a proven example of being super relevant for their customers in the US.

Despite their enormous assortment (564 million articles available in the USA alone) and competitive prices, Amazon has not yet been able to fully live up to its purpose and relevance in the Netherlands. The lack of a high-performing fulfilment network in the Netherlands – one of the key aspects that make them stand out in other markets –  is contrary to the expectations of the Dutch customer, resulting in a lower NPS.

Amazon has recently launched a Dutch translation for their website, even though fulfilment is still done from other countries, and is building new fulfilment centres close to the Dutch border in Germany. We are following these developments with great interest to learn if and when Amazon will realize it’s purpose in the Netherlands and roll-out their proposition, and how this will affect their NPS.            


Conclusion

Being relevant to customers is key for retailers in today’s marketplace. Successful retailers like Action and Bol.com demonstrate that they are able to align their purpose, customer expectations and proposition, which results in higher NPS scores. Still, there seems to be enough room further improvement as none of these retailers scored above 50 on their NPS.

At IG&H – together with our customers – we deal with these cases on a daily basis. We find it fascinating to study and understand how retail is developing in today’s rapidly changing environment. How does this impact Dutch retailers and are foreign players like Amazon and AliExpress gaining a foothold? We’ll write more about these and other developments in the “IG&H Retail Monitor”, which we are planning to launch by winter 2018.

Feel free to reach out to us if you are interested in discussing your case with us or have any questions.

Joris de Bruin, j.debruin@igh.nl and Evelien Kip, e.kip@igh.nl.