Has COVID-19 changed CX forever?
In just a few months, COVID-19 has brought about a slew of changes around the globe that no one expected. It’s unprecedented how the pandemic has redefined how we work, play, interact with one another, and live life in general. Indelible human habits have been altered, willingly or not, and the new normal was born—a new normal where face masks, social distancing, and constant sanitation are the new daily habits. With people’s habits changing, so too are their behaviors about almost everything; most people are now hesitant to go outside and make in-person transactions, doing everything online whenever possible. Spending behaviors have also changed due to the economic decline suffered by different countries globally. Consumers are now very conscious of how they spend their money and where they spend it.
At the end of March 2020 alone, three million were unemployed in the US and as much as $25 billion were lost, and that’s in the restaurant industry alone. This devastating effect on the industry has been called the “restaurant apocalypse,” with orders at full-service restaurants dropping at an alarming rate of 71% by March 22. The COVID-19 crisis has pushed consumers to make transactions and do their shopping online, whether they’re buying food or essential items. This has led to a boom in the eCommerce industry, which completely changes the rules of the game when it comes to providing excellent customer service. The focus on customer experience or CX isn’t a new strategy by any means, but the current situation makes it a very important aspect of business to master, especially since consumers are in a very volatile state and their behavior can be very hard to predict.
Playing By Different Rules
Modern economies are consumer-driven to the point that winners and losers in business are determined by the choices consumers make. In the COVID-19 era, this has become a larger consideration due to changing customer sentiment that has completely altered customer behavior. With the highest unemployment rate seen in decades, people today are very conscious about where they spend their money, leading to a decrease in discretionary spending. Financially speaking, this may be prudent for the consumer, but it doesn’t help in reigniting a suffering global economy.
Distribution channels have also been disrupted due to logistics problems that have affected the supply chain both inward to businesses and outward to consumers. This has led to delays in delivery that have caused already on-edge customers to be more worried about the future of the brands they patronize. Phone, chat, and video conferencing have greater importance and are mostly the only means consumers can reach out to some companies. A number of brands have turned to their digital voices, but this has been a struggle for companies who are not prepared and don’t have the resources to digitize their business.
An agile business model is a key to keeping afloat in this pandemic-driven landscape. Businesses must optimize their online channels and be flexible enough to implement changes at a moment’s notice. This gives newcomers to eCommerce a competitive edge against traditional brick-and-mortar stores because they establish their business on a digital foundation. The initial rise in online shopping for essential items due to the pandemic may have been good for eCommerce players, but this has led to inventory challenges because the pandemic has made meeting demand difficult.
How Companies are Coping
Digital is the way to go in the COVID-19 era, and even big names like Walmart are taking some big steps toward a digital transformation of their business. The retail store giant has taken on an omnichannel approach and has put more focus on providing an overall pleasant experience to its customers by providing options. Although Walmart executives believe that the consumer shift to digital may be permanent, they also believe that the combination of an online channel and the store footprint is what has kept Walmart alive through the pandemic. This belief is further proven by good customer-satisfaction scores on the store pick up business in the past few months. Although most consumers shop online, there’s still the desire to access the goods as quickly as possible, even if the goods were bought through digital channels.
On the other hand, Costco is still focused on getting their customers to their physical stores, despite having a digital channel of their own. The company’s inability to make same-day deliveries and the lack of the option for curbside pickups, however, is proving to be a thorn in Costco’s side. The company’s investment in eCommerce is a smart move, but it came a bit too late. Its major competitors have made the jump earlier and are now enjoying the benefits. This disadvantage can be resolved in time, though, if Costco follows in the footsteps of others in the industry who have adapted their business models accordingly to address the challenges brought about by COVID-19.
Consumer Confidence is King
COVID-19 was a curveball thrown by 2020 at the eCommerce industry and business in general, and it shows no signs of going away anytime soon. The changes the pandemic caused in consumer behavior seem to be here to stay for some time, even during the post-pandemic period. Due to these changes, it’s important to gather data on what consumer sentiment so you can help them find the right products where they want when they want, and how they want them. Adapting means making changes to your marketing channels and strategies based on a long-term plan and keeping your business nimble enough so you can make changes whenever necessary.
As this is a time of uncertainty for both the business and its customers, you must foster trust and confidence , and the best way to do this is by helping marketing teams understand the rationale behind the changes made to the business and ensuring that customers know that they are your main focus.
Alon is an Israely product and marketing executive with a track record in leading customer centric product management and inbound marketing strategy. While improving user engemenemt and customer, I help Start Ups achieve product market fit and expand their online footprint. I specialize in technology, entrepreneurship, customer experience.