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How technology is driving customer experience

10th Jul 2017
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The impact of technology on customer experience and behavior has been studied at length in the online commerce space. Marketers routinely cite the ten second rule to emphasize the importance of creating websites that load faster. How does this work in the physical retail space? Does technology play a role in driving customer experience and behavior?

Last year, Deloitte conducted a survey of over 3000 millennials to study the impact of technology in their restaurant experience. Not surprisingly, the study found that over 40% of the participants preferred to order food online compared to the inconvenience of going out for food. But even among those who visited drive-through restaurants or take-outs, nearly half of the respondents stated that they preferred paying by phone. This was also true among the one third of respondents who ate at restaurants regularly.

Even outside the ‘restaurant’ ecosystem, technology has a huge influence in the way customers engage with a product or service.

Convenience

The ease of transacting is by far the most important reason why customers prefer more technology in their interaction with a product or service. When McDonalds launched their self-service kiosks a little over a year ago, most of the op-eds in the mainstream media focused on its impact on minimum wage workers. But lost in the discussion is the impact these kiosks are bringing to customer behavior. A study previously published by researchers at the National University of Singapore found that self-service kiosks reduce the ‘social friction’ that makes face-to-face engagement challenging. In this case, the technology made it possible for customers to customize their orders a lot more efficiently than they could have while interacting with a human worker. This improves customer experience and overall customer satisfaction. As a result, self-service kiosks have shown to increase sales.

Security

The adoption of credit cards and online payments in their early days was attributed to convenience - carrying a plastic card to make payments is a lot easier. But a rise in cyber-security issues over the past decade has dealt a blow to its wider proliferation. This is at least true in the emerging economies where plastic money is still not adequately mainstream. The adoption of new chip and PIN-verified cards is however bringing the prevalence of such crimes down. Between 2004 and 2010, 91 percent of fraud occurred on signature verified cards, with just nine percent of fraud committed on chip and PIN enabled cards. This is just one way that improvements in security through technology drive more people to conveniences that were previously fraught with risks.

Personalization

A study published by Accenture found that 75% of consumers are more likely to buy from a store that recognizes their name and recommends products based on past purchases. This is also reiterated by another Infosys study which notes that 74% of customers feel frustrated when website content is not personalized to their needs. Personalization and customization play an equally important role in offline commerce as well. Body scanners, for instance, are now being used by apparel stores to take precise measurements of customers in order to create customized clothing. Customers like it when they buy clothes that fit and this triggers higher satisfaction rates and in turn repeat purchases. For example, Nike launched its NIKEiD line of personalized shoes that helped the company bring in almost a quarter of its total revenues from the DTC (direct to consumer) channel.

Technology has made it cheaper for businesses to bring products to their markets. This has made competition a lot more intense than it used to be even a couple of decades ago. But the good thing is that innovation is getting cheaper by the day. The increasing proliferation of technology is only helping customers to pick better products which increases consumption and the overall quality of products in the ecosystem.

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