Are retailers lagging in techniques to optimise customer experience?

This week, the British Retail Consortium reported that total retail footfall in the UK was down by 1.1% in February 2016.

The decline was attributed to a shift in consumer behaviour which has seen more shoppers visiting out-of-town retail parks as opposed to the High Street; and a greater demand for furniture and household goods.

However, any analysis of the short-term is simply masking a much greater, long-term trend in the sector – one that shows shoppers in the UK becoming channel agnostic; no longer desiring either an in-store, out-of-town or ecommerce experience from their retailers, but a joined up amalgamation of channels incorporated from in-store, at home and on the move.

According to Google research, 50% of consumers now expect to buy online and be able to pick up in-store, while 71% of in-store shoppers who use smartphones for research say their device has become more important to their in-store experience.  

And the retailers that have recognised this early are most likely to prosper during this downturn in footfall. Aberdeen Group research highlights the fact that 33% of retailers with multichannel customer engagement strategies retain an average of 89% of their customers, compared to 33% for companies with weak multichannel customer engagement.

Tech troubles

Despite this trend, new collaborative research from MyCustomer, Smart Insights and Microsoft Services has found that many retailers are still struggling to adapt to the growing demand for multichannel, largely due to technological requirements and an inability to change at pace.

Let by Dr. Dave Chaffey, the research, ‘Digital disruption in retail’ , incorporated a survey of 125 senior professionals from retailers including Argos, Lidl and IKEA to find a large percentage facing major challenges around integrating technology and being able to innovate at the rate expected by the customer.

75% of retailers ranked “designing effective customer experiences across multiple devices” and “integrating different technology solutions” as the two equal-highest challenges their businesses faced, while “defining and implementing multichannel strategies” was rated as a top challenge by 72% of respondents.

This last factor is particularly pertinent as 27% of those surveyed stated their business only had a short-term perspective towards planning for digital and technological innovation; usually planning only as far ahead as a quarter-year at a time.

Respondents stated that long-term planning was central to being able to improve customer experiences, alongside a clear ownership of customer experience within their business.  

The study adds that “many retailers are lagging in techniques to optimise customer experience” and that, at present, the most common techniques to create more customer-centric experiences focused on traditional techniques such as surveys and competitor benchmarking with the majority of companies using these.

Interestingly, given that research shows such a high percentage of in-store shoppers stating the importance of mobile devices to their in-store experience, very few retailers currently offered digital incentives in-store. NFC led the way with 75% uptake, however factors like social media engagement (22%) wi-fi (29%) and real-time personalised incentives (55%) still have some way to go before they can be called ‘mainstream’ in their use amongst top retailers.    

Agile approach

The report states that more retailers should look to Agile management techniques to improve digital and technological innovation, with two preferred approaches:  

• Market agility where customer research, real-time employee insights and structured experiments are used to understand customer preferences and to respond by creating better digital experiences and giving staff the right type of insight to manage their interactions better.
• Systems development agility where updates to the digital customer proposition and experience are implemented using agile systems development methodologies such as Scrum.

44% of those surveyed had yet to shift their organisational structure to a more agile approach, and many of those that haven’t fear they may yet get left behind in the multichannel race, which is set to define the UK retail market for many years to come.

Click here to download the report ‘Digital disruption in retail’