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In today’s experience economy, merchants are facing the complex challenge of providing excellent customer service across multiple touch points, whether it’s in stores, online or through social media. According to Salesforce, 55% of consumers say they experience a disconnect across a retailer’s channels.
To engage customers more consistently across channels, retailers are experimenting with ways to delight shoppers wherever they are — strolling through the mall, following their favorite brands and influencers on Instagram or researching their next major purchase online. Wherever they find it, today’s consumers demand a shopping experience that’s personalized, convenient and modern — and retailers are attempting to meet and even surpass those expectations by introducing high-tech tools and features to their stores and websites.
With customer experience at the forefront, here are several strategies and technologies that will drive market share in 2019 and beyond — and two trends that I don’t believe will live up to the hype.
Personalized Experiences Through AI
Brands are applying artificial intelligence (AI) to huge amounts of data to predict customer behavior and deliver better recommendations to individual shoppers. AI allows merchants to provide customers with what they want in less time and with less effort. As AI technology is becoming more sophisticated, less expensive and simpler to implement, the retail industry will witness a dramatic increase in the use of these applications.
AI-enabled marketing platforms such as Boomtrain monitor multiple customer touch points to help companies understand how buyers interact with a brand online. Boomtrain creates a universal customer view of a retailer’s mobile app, website and email campaigns, enabling e-commerce retailers to deliver a seamless customer experience across all channels. For example, if a customer is browsing sweaters on a website, he or she may receive a push notification about a flash sale on winter clothing and make an immediate purchase.
Voice Commerce
Nearly a quarter of households have purchased at least one smart speaker, according to Nielsen, and by 2022, OC&C Strategy Consultants predicts that figure will increase to more than half.
While many consumers currently use smart speakers to play music, ask about the weather and control smart devices in the home, more and more people are starting to use them as shopping assistants. According to a PWC survey, 50% of respondents have made a purchase using their voice assistant and another 25% said they would consider doing so in the future. The majority of items purchased are things that consumers feel comfortable purchasing unseen, such as groceries, books and cleaning supplies.
Though some consumers report feeling uncomfortable trusting a voice assistant with transactions and payments, as voice assistants become more commonplace and the technology improves, Alexa and other smart speakers will make online shopping faster and more convenient.
Subscription Models
According to a McKinsey report, “the subscription e-commerce market has grown by more than 100% per year over the past five years,” with the largest retailers in that category generating several billion in sales in 2016, up from $57 million in 2011. Direct-to-consumer brands like Birchbox and Dollar Shave Club have embraced subscription models to boost customer retention and drive recurring payments.
The McKinsey report reveals that the curation model, in which customers receive certain products based on their preferences, is the most popular type of subscription service. Stitch Fix, for example, sends customers a few articles of clothing or accessories each month tailored to their sizes, styles and needs. According to Bloomberg, the company has about 2.9 million subscribers, an increase of 22% since 2017.
The next two trends are ones that I think are likely to die out or take significantly longer to gain traction.
Augmented Reality
The adoption of augmented reality (AR) has been slower than expected, but some applications are starting to emerge in retail. Clothing and home decor retailer Anthropologie developed an app that gives shoppers detailed views of furniture in different fabrics, colors and shapes, as well as from different angles. In-store AR experiences are also becoming more common. American Apparel created a mobile app that customers can use to try on clothing virtually, without ever entering a dressing room.
Though these apps have created some buzz, it’s unclear whether retailers will get the return on investment or customer buy-in they are hoping for. Some of the apps are visually impressive but don’t offer any real value to the customer. For example, shoppers may be intrigued by smart mirrors, but many who are already in the store will want to touch the fabric and see how it feels. As the novelty of many AR applications wears off, I believe many brands will see a better return on investment on projects like improving online ordering and upgrading mobile websites.
Chatbots
Though e-commerce companies are increasingly incorporating chatbots to offer basic customer support, like helping customers find relevant products or complete transactions, I don’t think this technology is likely to be a game changer any time soon.
It’s estimated that 51% of customers never approach a business again after one bad experience. That raises the stakes for every interaction (including missed opportunities). So it’s unlikely that e-commerce companies will risk losing a sale, or worse, a loyal customer because of a frustrating interaction with a chatbot.
Chatbots can be useful in dealing with frontline interactions and answering frequently-asked questions, but they are certainly not equipped to manage the customer journey from end to end. Once customer queries become more complex, the human touch is still valuable and necessary.
No matter how these trends ultimately play out, they all represent a focus on providing better and more personalized customer experiences. Retailers and e-commerce companies will increasingly take advantage of some of these promising technologies to provide consistent but differentiated experiences across all touch points — a crucial aspect in today’s customer-focused economy.