IBM: How Retailers can Deliver Effective Marketing at Christmas
Christmas shopping is increasingly taking place online and click-and-collect is set to dominate consumer purchasing activity this Christmas, with retailers being warned to get their logistics houses in order to deal with the oncoming rush to pick up deliveries from the store.
The rise of click-and-collect is one example, but online retail is having far-reaching effects on consumer habits and behaviour across a variety of activities. How should marketers adapt to deal with this trend?
Every year we monitor the performance of hundreds of retail websites worldwide to gain insights into how shopping is evolving.
Over the years the results have demonstrated how seasonal events in the retail calendar, especially around Christmas, have grown to affect the behaviour of shoppers and retailers - with sales starting earlier in the year, Christmas holidays being used for shopping and practices such as Black Friday discounting arriving in the UK under the influence of online retail.
Shops which traditionally would have been closed over the Christmas Bank Holidays are now able to trade online and found a market of customers eager to shop. Sales and discounts which would have started in January now happen up to two months earlier.
Busy pre-Christmas shopping days have extended over a longer period, with customers taking advantage of early discounts to plan purchases but also relying on better delivery to buy right up to the last minute.
Couch Commerce on Christmas Day
Our research revealed how three years ago shopping actually became a de facto Christmas Day activity, with significant number of shoppers eschewing family interaction to log-on and indulge in ‘couch commerce’, spurred on by the perfect storm of 24/7 online retail, earlier sales and discounts and tablet computers being the gift of choice that year.
When it comes to shopping on a mobile device, attention metrics show that consumers have no patience for websites that crash, are slow or do not display check-out details or other information correctly. Whether they are logging on at home or in the store, on a tablet or a smartphone, shoppers will quickly give up trying to browse if not satisfied.
So a first step is knowing exactly on what device and where the shopper is, in order to provide the correct experience. While shoppers don’t think about whether they are responding to an email, asking queries on Twitter or profiting from an advertised discount, many marketers and businesses still have siloed mechanisms for dealing with each interaction.
Lost revenue occurs from the frustration created by this lack of alignment between business operations and customer expectation.
Christmas is a busy planning period for shoppers. So this is when digital marketing activities such as re-targeting and basket tracking come into their own for online retailers. Make it easy for a shopper to start a list, select items to be purchased and store them in a basket.
Uncompleted purchases and abandoned carts could be the result of a technical problem on a website or simply that the shopper has run out of time or attention. In order to save that revenue, plan for both contingencies, by making it possible to track interactions to identify failure points but also by keeping track of a shopper’s preferences and choices and reminding them when they log back in that the trolley is still full of selected items and gifts.
In the store, personalisation is another effective way to support shoppers and ease the planning of multiple purchases. Use behavioural and profiling data to identify which type of shopper has entered a store or is visiting a website. With the right technology, combined with external or historic data which the shopper has shared, this has now become easy to do.
Retailers could benefit highly from applying marketing as a service – by identifying the last-minute gift shopper, the cook responsible for a large family meal, the parent looking for the highly-prized seasonal toy, or the friend struggling to identify the most suitable present – by quickly and efficiently providing personalised and targeted suggestions on items, discounts and stock.
Online retail has had a serious effect on the Christmas retail season, which has forever been changed. While some retailers have vowed not to start sales and discounts as early this year, pressure still remains as years of recession continue to heighten shoppers’ price sensitivity.
Introduced by large online retailers and adopted by grocery chains the practice of Black Friday discounting looks set to stay.
Retailers must adapt to this new environment and marketing from a more holistic perspective is one way to start.
Re-defining the economics of CX in the new customer journey
There’s no shortage of customer service channels for the enterprise to select from today. Regardless of the many new metrics that have emerged – such as customer success, or empathy – cost reduction is still a primary driver in selection criteria.
There are many articles dedicated to how companies can turn customer service and customer experience (CX) from a cost to a revenue centre. The problem is, if you stop there and don’t look beyond cost reduction, you’re limiting the scope for CX to become an even bigger economic contributor in the enterprise.
There is every opportunity for customer service and CX to significantly influence the front end of business, particularly amongst direct-to-consumer subscription-based products and services, such as popular streaming services like Netflix, Amazon, Disney+, as well as sports subscription services like DAZN.
In these products and services and others, there are new customer journeys that may drive business growth and revenue. They start earlier and may last a lifetime, so getting things right at the start of the journey is key so that customers have the best experience from day one.
Not only will this help in making customers less likely to reach out for issues-based support further down the line, but these customers will be much less likely to churn, and much more likely to take up new services as they are offered throughout the lifetime journey.
So, what does the new customer journey look like for these services?
Opportunity waiting for the likes of Netflix & Disney
While consumers may have previously regarded customer service as a way to mitigate the inconveniences in their lives, the customer journey is expanding in scope every day. Today there are many more touchpoints available that put CX in a position to drive revenue.
For one-off purchases, traditional CX deployments have not changed significantly in the past few years. However, if you look at the change in the CX relationships we’re seeing with subscription-based products and services, particularly media-based streaming services, it’s clear that these companies lead what quickly become very multifaceted relationships with their customers. These have serious potential to evolve over time for increased economic benefit.
For any sort of subscription-based business, customer lifetime value is paramount, and the requirement to actively manage a continued positive customer experience is critical.
Every interaction is an opportunity, and every data point is a chance to offer more value. Introductory offers can convert to longtime customers. Longtime customers may take up opportunities to upgrade to more premium products or services. They may also appreciate incentives to invite family and friends to become customers. Consumers who like a particular service, for example, may appreciate a recommendation for another similar or complimentary service.
It all starts with customer interaction, and the customer experience journey becomes an opportunity to strategically affect the user base and resulting revenue - which is a far cry from the limitations of call center cost reduction or churn metrics.
How do companies support the new customer journey?
More and more, customers look at the new customer journey as engaging with brands as part of their lifestyles. Many companies are making brand ambassadors available before the traditional customer journey even starts, which is a marked change from a purely transactional relationship associated with a one-off purchase.
These ambassadors, who are often independent users of products or services, are providing trusted pre-sales advice, and that same trusted advice can also function to nurture the customer journey in a subscription-based relationship. Call it ‘GigCX’ or ‘crowdsourced customer service’ or even ‘peer-to-peer customer service’ - it doesn’t matter.
The key is in providing impartial, trusted advice from real users. Think about it: who would you rather get advice from? Someone who has used a product or service extensively, or someone who has been trained to provide customer service surrounding that product or service?
For services such as streaming media, advice from trusted experts with real product know-how could be invaluable. This may not be limited to technical issues, such as what to do when you can’t access your favourite show, or how to access services across various devices. It could be parents helping other parents who are concerned about how to restrict adult content from child viewers, or simply customers who have similar taste in programming who can comment on the benefits of upgraded or premium products. The point is, these experts are easily available at any touchpoint in the customer lifetime journey, creating more chances to add value.
It’s also about tipping customers from ‘passive’ to ‘promoter’ in the NPS scale. It’s an opportunity to turn neutral customers who may be vulnerable to competitive offerings into loyal enthusiasts who will keep buying and referring others, fuelling growth. It may ultimately help drive even further revenue by creating customers that are helping to sell the brand itself.
And, while chatbots and automation may play a key role, they are often not able to handle the more complex support needed in the new customer journey. Conversational AI is rarely as conversational as it claims to be, and in the new customer journey, most companies are finding that a mix of automation and people-centric service is an ideal way to nurture the many new touchpoints created.
It’s no longer about trying to replace human capital with automation: it’s about orchestrating a uniquely personalised CX, and proactively engaging during the customer lifecycle to enhance the experience, and to create more long-term value.
At the moment, we’re only seeing the tip of the iceberg in terms of the power to affect the economics introduced by the new customer journey. We’ll no doubt see this evolve rapidly particularly amongst streaming companies as they use human-centric connections in CX to support the full potential of customer lifetime value.
About Roger Beadle
Roger Beadle is an entrepreneur and business leader who is reinventing how customer service is delivered via the gig economy. After establishing several businesses in the contact centre industry, Roger co-founded Limitless with Megan Neale in 2016. Limitless is a gig-economy platform that addresses some of the biggest challenges faced by the contact center industry: low pay, high attrition and access to new talent. Previously, Roger and Megan helped to build one of the largest privately-owned outsourced contact center business in Europe, before selling the business to the global conglomerate Hinduja Group. Roger is an outspoken proponent of digital ethics, worker’s rights and the ‘good-gig:’ which encapsulates gig work for incremental pay versus full time work, skilled gig work, no unpaid time/downtime and zero expenses.
Named a Rising Star at Deloitte’s Technology Fast 50 program, Limitless is a gig customer service platform, combining crowdsourcing and AI to help global businesses address their biggest customer service challenges – rising costs, increasing attrition, variability in demand and the need for diversity. Brands like Microsoft, Unilever, Daily Mail Group and Postmates are using Limitless’ SmartCrowdTM technology to connect with their most engaged customers, and reward them for providing on-demand customer service that can flex in line with demand. Limitless is one of the world’s first global tech platforms to introduce localised platform terms to protect the rights of its gigging workers. Backed by AlbionVC, Downing Ventures and Unilever Ventures, Limitless is empowering people worldwide to earn money for providing brilliant customer service for the brands they love.