As we approach the busiest shopping weekend of the year in the US, I see many retailers still falling short of providing a true omni-channel retail experience. Before I share my thoughts on why and how so many retailers are falling short, I want to quickly define my expectations of an omni-channel retailer. First, the word “channel” only applies to the retailer, and as many profess, the customer does not understand this construct. Even those of us in the industry will admit forgetting about the complexities of our own businesses or those that we support in the moment where we are trying to accomplish a task for our own sake. From a customer experience perspective, I see the requirements of omni-channel retailing including the following:
Product Discovery – Whether I am browsing a retailer’s product catalog from the comfort of my couch with a tablet, standing in their store searching on my mobile phone, talking to a store associate, or simply browsing the store, I expect consistency around product information, price and availability. Preferably, I can also see and share my shopping lists and carts across each of these touch points to then purchase in any location. Most retailers have done a great job of having consistent product information across channels for some time as the industry found the value of a single product information management (PIM) system to ensure this some time ago. However, availability of product is still a huge challenge as most retailers have visibility into only 60-70% of their in-store inventory. This means that when a retailer takes a short cut using algorithms to determine when something is shown in stock, to minimize the risk that it is not, they not only miss potential sales, decreasing the value of capital, but could also have a customer satisfaction/loyalty issue if the customer later goes in and sees that an item is in fact in stock.
1. Loyalty – We all want our 15 min. of fame and to be appreciated for the business we do with retailers. Feeling special is why most people engage with loyalty programs as it provides this sense of appreciation that we are always seeking in our lives. As customers shop more online or across multiple stores, we loose the customer experience of a store associate knowing who we are, what we like and how much we spend. An omni-channel retailer then has to recognize this information gap and find creative ways to expose it to every touch point from how they personalize the customer experience online or more importantly pass this insight to the store itself and the associates supporting customers.
2. Customer Service (Returns/Exchanges) – The purchase journey, as frictionless as it hopefully is made to be, can still often result in an issue requiring a return for reasons such as: we bought the wrong item, size, changed our mind, or found a defect. An omni-channel retailer knows the customer across any touch point (channel) and can respond and support the customer’s return or exchange across any touch point. Today, nearly all of the retailers mobile apps I have on my phone (which is a lot because of my focus on the industry) do not show my past purchases in the store and often connect me with call centers that can’t react to in-store purchases. Similarly, when I go into these same retailers stores, while they may now accept my return, they are not in a position to recognize my other online purchases (lifetime customer value) and may not even have the product assortment required to support an exchange.
3. Purchase – I have purposely chosen to make the purchase event #4 as I believe the first three have a bigger impact on “customer lifetime value” and ultimately revenues and profitability, yet I see most retailers have focused on how to enable transactions such as “buy online, pick-up in store” or “buy online, ship from store”. While it is certainly valuable to be able to see something is available in a store nearby, buy it online and then head in to grab it, we all know negative customer experiences have a much greater impact on future sales. Following I’ll share a recent experience to illustrate.
So with all the omni-channel initiatives announced and the ones you are likely executing against this year, why am I writing about seeing such a miss? Ultimately, I think in our focus on the purchase event, we have set ourselves up for some very high transaction costs and negative impacts to customer experience that will result in reduced loyalty and ultimately reduced sales.
To better explain where I see the challenges, let me share a recent, personal shopping experience with a retailer famous for its focus on customer service. While out of town for work, I had some time to kill and wanted to buy a new sport coat and maybe an overcoat. My initial shopping experience was fantastic. While I deviated from my mission and ended up looking at jeans, a store associate approached me in a very disarming way and got past my typical response of “just looking”. As a guy that is not built for the latest designer jeans, I frustratingly shared that most likely there were none for me to purchase and that we should move on to the original task at hand. This gentleman however was not convinced and was determined to prove there was a pair for me. He was an attractive man that looked like he could be a jeans model for any major brand. I laughed to myself and figured it didn’t hurt to entertain the idea on the off chance he found me a pair that fit, and I’m always in “secret shopper” mode for my job, so off we went to the dressing room. I’ll share the full story later on how we went from not only finding a couple pair of nice jeans that fit me, but also conquered the original task of purchasing a new sport coat and overcoat. All in all, the purchase was a big one for this retailer, and I even opened a new store card. The challenge came later when I didn’t receive all of my items that were tailored and shipped to my home.
A couple weeks after the purchase, I awaited delivery of all of my items. Everything needed some tailoring, so interestingly I walked out of the store with nothing but a smile and the anticipation to receive everything at home. I had even chosen to have the receipt emailed to me rather than take home a printed version. Unfortunately, when I received the shipment, I was not at home. I went to the shipping company’s pick-up location and asked for the items for my address as I had forgot the slip at home. I was sent home with a nice big box and excitedly opened it when I got back to share all my new purchases with my wife, who I knew was going to particularly like the overcoat. And here is where the problems began.
There were two items missing from my order. I went to my email to try and understand if they were perhaps shipped separately and just hadn’t arrived. As it turns out, I never got the original receipt, but did have a couple emails with the shipping notification. The two emails looked identical and listed all items from the original email, so I assumed they were identical and maybe just duplicates. When I entered the tracking number on the shipping company’s website it showed that the package had been shipped and that there was only one. What I did not notice until much later was that those emails which contained the entire order contents versus showing that some items were in one shipment and some were in another had different tracking numbers. One package had indeed not yet arrived, but I did not know this yet. As I had been checking all of this from my mobile phone standing in my living room, I also remembered that I had the retailers app and assumed that it would be the fastest way to look up the customer support number to get this all resolved. It was in fact prominently displayed in the app and easy to trigger the call.
When I got a hold of a customer service rep, which was actually quite fast, we had a very difficult time finding my order. Not having a receipt with the order number on it proved to make it quite difficult, all I had was a tracking number that didn’t seem to help them. The service rep searched for my order by phone number and name and even after giving the credit card number (store card), could not find my order. Ultimately we both realized that the customer service rep seem to only have access to online orders (the phone number is likely different for online purchase than in-store and the mobile app is set to the online call center). I then had to be transferred to someone else that could support in-store purchases. They were ultimately not much help and had to call the store direct to talk with someone in shipping to determine if the items were missing or in another package as they also couldn’t tell this in their system. I spent a great deal of time on hold through all of this and ultimately the department manage said she’d figure out what was happening, track down the package herself and call me back when she knew the answer. The order had in fact been split into two deliveries and the other ironically arrived a few minutes after I had left the shipping pick-up location. As it was late on a Friday and the pick-up location was closed on the weekends, I would have to wait until Monday to go pick up the second package.
We all have busy lives, and I couldn’t make it into the pick-up location until Tuesday. Well, for some reason the shipping company marked the second package as having been with them for over 5 business days (counting from the first shipment vs. the second package) and sent it back to the store I originally bought the items from. At this point, I had to start all over with tracking down my jackets. Knowing the mobile app was not helpful, I went online via a desktop browser and tried to log into my account associated to the credit card hoping I could find the order number before I called again. Frustratingly I had to create a separate account on a separate site for the store card than the main account on their site. Forget not doing well at omni-channel, this was a fail for one channel! Either way, nothing online was showing my order so I had to call into customer service. This time I went through the same challenges, but unfortunately had even more trouble as the customer support rep I was working with seemed to have even more trouble navigating the multiple systems that had order and customer information. After over half an hour I hung up and tried calling the store directly (I later noticed in the shipping email that this was my instruction if there was a problem – not exactly an omni-channel experience). When I got connected with the store, even they struggled to find my order. The person I originally talked to took all my information down and committed to tracking down my missing item. Frankly at this point I was considering doing a chargeback on my credit card, but realized it was their store card (will likely impact me from using it in the future). The good news is that the store was able to find my jackets and shipped them back to me, with both sides crossing our fingers that I’d receive them ok. All in all, it was quite a fiasco. If I see you at NRF’s Big Show in New York, you get to see my new overcoat.
Reflecting back on this experience, I see a few key challenge areas that if addressed would have a material impact on customer satisfaction, cost of doing business and most likely future revenue.
Order History – While it is unlikely anytime soon retailers will be able to standardize on one purchase system, each system can have their order history exposed as an aggregation service that can be accessed by the customer support applications the call center reps use, store associates log into, and the mobile app. This would make it so that across any touch point, all orders, regardless of channel would be visible.
Customer Service Call Centers – Many retailers have their online and physical store businesses divided across different executives that own separate operations by channel. With this comes different call centers that use different tools to get their job done. If you can’t consolidate these operations or tools, then minimally make sure that the tools have access to a customer’s order history across channels and have return/exchange processes outlined such that the handoff is smooth or preferably enables the first responder to resolve the problem.
In-store System – Store associates that have to support customers walking in and on the phone, need to have complete visibility into all purchases regardless of channel, and better yet, they should be able to see the customer’s loyalty value so that they maximize the experience for those customers that we all know can be the larger percentage of our revenue.
Each of us carrying the Internet in our pocket has radically changed retail. As more and more of the shopping experience incorporates digital features, from window displays and mobile point of sale to e-ink price tags and near frictionless checkout with mobile payments, we need to excel on the basics before introducing too many new capabilities. As you plan for 2015, I’d set a goal to at least be able to show inventory and order history on any device for both your customers and employees.