Connecting With Customers Across Channels
Today’s retail customers are both demanding and spoiled by extensive choices. Channels and touch points are proliferating, smart access devices have grown, and customer expectations around these have leapfrogged. More than ever, customers want a consistent, personalized cross-channel experience. Chain Store Age spoke with Wipro’s Saurabh Mittal about how retailers can meet these expectations.
Retailers have so many channels today when it comes to connecting with their customers. What are some of their biggest challenges in this regard?
Let’s face it, today’s retail customers are very demanding and spoiled for choice. Channels and touch points are proliferating, smart access devices have grown and customer expectations around these have leapfrogged. Customers are evolving faster than the industry and expect innovation on part of brands and organizations; they want a consistent, personalized cross-channel experience.
Retailers need to segment and understand their customers using predictive analytics to stay ahead of their competition and ahead of what their customers expect. The data points provide invaluable insight that can be used in determining and optimizing the market-mix model and changing the messaging depending on channel preference. Ultimately, the biggest challenge is to leverage increasingly smart technology to redefine and reinvent customer relationships and experiences.
What kind of shopping experience do customers expect online?
Customers demand a smooth, rich and immersive shopping experience. They expect their online shopping experience to constantly improve and evolve as more innovative and next-generation technologies become available. As the social Web grows, people want an increased level of interaction between product pages on e-commerce sites and social media sharing capabilities, as well as consumer review sites.
Additionally, online shoppers are looking for innovative and engaging widgets on their desktops and on their mobile devices. They are looking for shopping on mobile sites, which opens up new online shopping expectations, such as e-commerce sites that are mobile-friendly, providing them with easy navigation and a very simple checkout process to purchase directly from their phones.
Retailers need to build more intelligence into their online shopping initiatives to offer a personalized experience where the shopper feels more connected. Online shopping growth would increase if retailers were to innovate and provide better online experience to customers. It is constrained at the moment.
Are retailers meeting these expectations?
Retailers are meeting some of the expectations of their customers. But there is a long journey ahead in terms of catching up with customer expectations. One of the primary reasons why retailers are falling short is because they operate on wafer thin margins and have been traditionally tardy in adopting technology. This is because their systems were built in silos, they don’t have cross channel visibility and a considerable amount of technological and process restructuring is required. Retail has piggy backed on outside innovation like devices, apps, group buying and location-based promotions for a while now. The bottom line is that it is time for retail to wake up and lead the innovation with partners.
How can retailers better connect with online customers?
The key is leveraging customer insight. Although most retailers collect and track customer data in some form, the majority do not effectively leverage it. Most retailers can explain shoppers’ buying patterns and preferences, but they do not understand their buying values, or why the customer purchases what they do. Without this information, retailers are not able to have a dialogue with their customers and end up having a monologue.
Retailers that have a dialogue with their customers are the ones that gain the greatest insights on understanding the buyer’s values, decision drivers, spending patterns, brand preferences, channel preferences, social influencers and peer behaviors. The end result is high-performance customer insight, and the ability to create a more innovative offering and enhanced online customer experience.
How are social media and mobile commerce impacting the customer experience?
Retailers must use social media to share information; enhance the brand; introduce new products; review and price products; run promotions and offer group shopping deals. Retailers must use social media to engage customers with reviews and ratings, and use the channel for two-way dialogue to acquire feedback.
Technology today has social media listening tools that can pick up sentiment data, information on competition, changing customer preferences and provide retailers with that extra edge to enhance customer experience and maximize the share of the wallet of their most valuable customers.
Mobiles are quintessential to life — they bring together my online world, my social network and my real life. But to leverage this, business processes need to embrace social media and mobile technology.
What is Wipro’s main area of expertise?
We work with the world’s leader global retailers and consumer product companies and many of them ask us questions like “How to conquer new geographies online?”, “How to improve the cross channel experience and drive consumption?” and “How can technology and analytics impact the buyer’s decision making process and transform shopping?”
Our global retail experience puts us in a unique position to understand the emerging retail landscape, create customer insight, enhance customer experience through engagement, create deep customer relationships through personalization and help our customers reinvent the future of retail with our service offerings around consulting and IT services.
How can Wipro help retailers provide a better customer experience?
There are three clear aspects to customer experience: adequate availability of information, a seamless cross-channel experience and personalization. Wipro has achieved this for some of the largest and most prestigious retailers in the United States and Europe. I’d go as far as to suggest that by enabling dependable customer insight, we have managed to help our retail customers do business better.
Checkouts Go Digital
Retailers over the years have created smartphone apps to help shoppers find stores, research products and look up reviews. Now merchants are readying for a new app trend that is expected to take the industry by storm: Paying for in-store purchases via mobile devices.
Seattle-based Starbucks is leading the way by allowing customers to check out with select handheld devices, from the Blackberry to the iPhone and iPod Touch.
The retailer ran a successful pilot program in Seattle, Northern California and New York in September 2009. In January of this year, it introduced a national mobile payment program to its 6,800 U.S. company-operated locations and more than 1,000 of its stores within Target. The move was part of an effort to expand on its digital media strategy, as well as its wildly successful pre-paid Starbucks Card program.
“Starbucks customers told us they wanted a faster, more convenient way to pay for their Starbucks purchases,” said Brady Brewer, VP of Starbucks Card and Loyalty. “Our Starbucks Card Mobile App provides them with an easy way to make purchases and manage their Starbucks Card accounts with their mobile phone.”
To pay via a mobile device, smartphone users must first download the Starbucks Card Mobile app, which links to their Starbucks card account. Similar to how a gift card would be handed over at checkout, customers show the cashier a bar code that resides within the app. After the bar code is swiped with a scanner, the transaction is complete and the app is updated in real time with a new remaining balance.
In the first 30 days of the launch, more than 1 million mobile payments were made with the new method, and a whopping 3 million active users to date have paid for their coffee drinks and other items with the app. Starbucks chairman and CEO Howard Schultz announced at a shareholders meeting that the company has the largest mobile payment network in the United States.
According to Richard Crone, CEO and founder of San Carlos, Calif.-based Crone Consulting LLC, most new payment types start with merchant acceptance, and mobile payment will be no exception.
“Big retailers are the sleeping giant in the mobile payments race, and there’s so much potential for growth,” Crone said. “For example, the average household has over five unused gift cards, totaling about $100. Since people rarely leave home without their phone. The Starbucks Card Mobile app is so convenient for customers. Plus, people are already using smartphones in stores, so it’s a natural progression to use them to make purchases.”
Starbucks customers loaded more than $1.5 billion on Starbucks Cards in 2010, up 21% over 2009, and according to the company, this success was driven in part by the My Starbucks Rewards program, which provides benefits to customers who pay with a registered Starbucks Card at participating stores.
Another coffee chain is also testing a mobile payment solution. Denver, Colo.-based Dazbog Coffee — which sells gourmet specialty coffee drinks — recently launched similar technology in 16 of its 28 locations in six states: Arizona, California, Colorado, Maryland, Texas and Wyoming.
“Since the technology is still so new, getting customers to understand how easy it is to use on phones has been a challenge,” said Leo Yuffa, CEO of Dazbog. “But overall, consumers seem ready for it. Once they understand how simple it is, they love the convenience.”
In addition, Minneapolis-based Target Corp. offers a mobile app for uploading gift cards onto mobile devices that can be used in its 1,755 U.S.-based stores.
To avoid paying costly fees on new hardware, more retailers are looking at these software-based mobile payment methods. In order for customers to tap smartphones themselves at checkout (and not use apps), mobile providers first have to install contactless chips in the hardware of devices, and this can be as pricey as $100 to $200 for each register.
“The technology is also charged at higher card-not-present interchange rates for transactions,” Crone said.
Starbucks seamlessly implemented the program because it already used bar code readers in stores, so the program could build off of its existing hardware. Software that doesn’t require bar code scanners will debut later this year.
“Embracing mobile payments should be on every retailer’s radar, but it shouldn’t be rushed,” Crone said. “Merchants should take time to select the best solution for their needs.”
J. Crew to expand DC to support international expansion
New York City — J. Crew said Tuesday that it plans a $20 million expansion of its Lynchburg, Va., distribution center to facilitate the retailer’s goal of selling more clothes overseas.
According to a report in the Lynchburg newspaper News & Advance, J. Crew is slated to open its first store outside the tates and start shipping orders to Europe by the end of 2011. Those orders will be filled at J. Crew’s facility in Lynchburg.
“We plan to ship to all those countries, and eventually ship to the world, from this distribution center right here in Lynchburg,” J. Crew’s CFO Jim Scully said in a ceremony Monday in Lynchburg.
J. Crew has operated a DC in Lynchburg since 1986, and has expanded the original building twice, said Tony Brown, senior VP of global supply chain for the company. “In the last seven years alone, we have added over 500 jobs to the local Lynchburg community in our existing building,” Brown said.
The expansion will include a new 155,000-sq.-ft. building ready next year.
“In the next three to five years, we think we can double the size of the business again,” Scully said. International markets are a key part of the company’s growth strategy. Currently, J. Crew ships orders to the United States, Canada and Japan. At the end of 2011, it will start shipping to the United Kingdom and other European countries.
Also, J. Crew plans to open a retail store in Canada in the second half of this year.