If recent media rumours are to be believed, Amazon is planning to open its first bricks and mortar outlet, located in the heart of New York City, close to the Empire State Building and world famous department store Macy’s. The opening is said to be scheduled ahead of this year’s holiday shopping season.
The move, if true, looks like a big change in direction for an ecommerce giant which until now has totally focused on the online channel. However, there may be some strong underlying reasons that explain why Amazon appears to be going against the grain and dipping a toe into physical retail. Here are three key ones:
1. Flagship location
Opening a store across the street from the Empire State Building, which boasts 4 million visitors a year will serve as a giant advertisement for Amazon’s online operation. It would be a flagship store where consumers could try out its own products, such as Kindle e-readers and Fire phones, in a similar vein to the outlets opened in major cities by the likes of Apple.
2. Click and Collect
Many experts believe one of the real drivers for the store would be to serve as a central hub for delivering online orders. There is a huge, growing demand for click and collect services. For example, in the UK it is something that 35% of Britons like to use. Obviously at present Amazon doesn’t have the physical stores that many of its rivals possess, making click and collect difficult. Similarly, the store could be a convenient way of supporting product returns for customers in the New York area.
3. Same day delivery
A third reason could be that Amazon wants to develop the site as a distribution centre to allow same day deliveries to local addresses. This seems increasingly credible in the light of Amazon’s move into selling ‘need-it-now’ items such as groceries and household goods which need to be delivered on the day. Essentially the building will act as a giant warehouse, with a shop on the front.
Amazon isn’t alone amongst pure-play online operations that have looked at expanding to have a physical presence. eBay did something similar a few years ago with its London pop up store. Given the importance of multichannel, including the High Street, to retail, it makes sense for ecommerce specialists to focus on building their capabilities in the physical world.
The challenges of extending the Amazon brand to a physical environment
However, Amazon will certainly face some new challenges if it wants to succeed in bricks and mortar retail. Here are three of the main ones:
1) Differences in customer service across channels
Amazon’s online customer experience is consistently rated highly by analysts and consumers. However, it is based on an automated, self-service model. A physical store has a different dynamic which involves face to face service. This requires people, all of whom have to be trained, motivated and monitored. Amazon will therefore need to work hard to extend its enviable reputation for online customer service to a physical environment.
2) Extending its USPs to the real world
Having made its name by pioneering ecommerce features such as online profiles, wish lists and reviews, Amazon will need to find ways to make it easy for shoppers to access and build on these elements in physical stores.
3) Delivering the range of products
Amazon is known for selling millions of products through the web – and, for many, is the de facto start point for online shopping. Given it offers 230 million items for sale in the US alone, it clearly can’t sell all of these in store. The company will therefore need to find a way to narrow down its focus and product catalogue. Does it, for example, look at high ticket items that people want to try before they buy or those that people want to receive quickly?
Whether the speculation about Amazon’s New York store is true or not it demonstrates the importance of multichannel to the retail world. Consumers value convenience and quality above all, meaning that, if they want to succeed, retailers need to make sure they can deliver the right experience seamlessly across the physical and online world.
Companies and consumers are increasingly seeing the benefits of implementing live chat. It drives engagement while providing an efficient, fast channel to answer customer queries. Consumers like it as they can engage on chat while still doing other things, making it unobtrusive compared to the telephone or email and fitting in well with their busy lives. The Eptica Multichannel Customer Experience Study found that web chat satisfactorily answered 93.5% of questions asked, and that the average session length was just 4 minutes and 29 seconds. Agents can participate in multiple chats at the same time, increasing efficiency compared to channels such as voice. Consequently more and more organisations are implementing live chat on their websites.
Many commentators and analysts are now looking beyond traditional text, to video-based chat. There are three reasons behind this:
- The technology is mature from both the customer and corporate point of view – almost every PC and mobile device has a built in camera and broadband/3G speeds are able to transmit high resolution moving pictures without undue break up or jitter.
- The rise of video calling through services such as Skype and Facetime means that consumers understand and are comfortable with video as a channel.
- A picture is worth a thousand words. People relate to seeing other people and engage more deeply than through text-based channels.
However, amidst all the talk of video chat I’d argue that it is much more part of the sales process rather than acting as a customer service channel. There are significant cons to go with the pros outlined above:
- One of the advantages of text-based chat is that agents can manage multiple chats at once. Obviously this isn’t possible with video chat, as the agent has to give his or her full attention to the viewer, rather than sharing it amongst multiple chat sessions.
- Staff skills. All agents are ambassadors for your brand, but generally they are not visible to the consumer that they are in contact with. So they can wear what they like and appearance is not an issue. Video chat is different, so you have to be sure that your agents are comfortable with appearing in the flesh and have the skills to engage with consumers through video.
- Most contact centres are busy and noisy places – there’s no way you’d want agents to be taking video calls in the middle of crowded offices. Therefore companies offering video chat may need to set up separate spaces, adding to cost and limiting the numbers of agents that can answer video calls at once.
Where video chat fits really well into the customer journey is during the sales phase. I’ve seen some really strong examples where this works. For example, a large US electronics retailer offered video chat that connected consumers directly to in-store staff. They could then take products from the shelf, unbox them and demonstrate them to the interested consumer, enabling them to view the item from all angles and get a real feel for it. Essentially it provided the in-store experience, without the consumer needing to leave their PC.
Another example is in high end fashion retail. Staff could bring out clothes from the warehouse, enabling customers to virtually examine them, giving advice and feedback to help make a choice.
What is important is that both of these examples are pre-purchase and actively help customers to make a choice and spend money with a particular company in a way that meets their individual needs. They are very valuable parts of the sales process, rather than customer service.
So, from my experience, video chat can be extremely powerful in specific situations – however it shouldn’t be part of your mainstream contact centre activities. It is a specific channel and needs to be handled in a special way, with its own staff and objectives if it is to deliver real benefits to customers and your wider organisation.
What are your views and experiences? I’d welcome feedback and thoughts in the comments section below.
Consultancy Nunwood has just released its latest research into the experience and service offered by UK companies. Based on feedback from 7,500 consumers on 263 brands, it highlights individual success and overall trends in the UK customer experience.
The picture it offers is patchy. From the boardroom down, companies recognise the importance of the customer experience to their ongoing success. The best performers are getting better, but a large number of organisations and sectors are not improving – or are even performing worse than in 2013. This conclusion mirrors our own findings in the most recent Eptica Multichannel Customer Experience Study, which identified a widening chasm between leaders and laggards.
From reading the report, here are my top 5 conclusions:
1. The customer experience begins with staff
Companies that recruit and retain evangelical, engaged employees are those that deliver a superior experience to customers. First Direct, the number one ranked company within the study, was praised for its friendly, empowered staff who combined knowledge and empathy with the ability to make discretionary decisions. First Direct recruits almost half of new staff through existing employees, and rather than looking at the financial services industry, tends to look at those with experience in the care and hospitality sectors.
2. Customer experience is a long-term project
Senior management understand the importance of the customer experience – it has moved from theory into practice. But it is not necessarily easy to make changes without a long-term strategy – consequently companies that are beginning projects now may not see any benefits until 2016. Rapid improvements are possible (as seen by the entry of Nationwide and ao.com into the top 10), but this requires targeted investment in capabilities and culture.
3. The best are getting better
Generally the top 10 brands have increased their lead over others in their industries. Across all 263 brands surveyed the overall improvement in performance was just 0.6%, while the likes of First Direct saw scores increase by 3-4%. Clearly many laggards are not moving forward. In highly competitive markets this is bound to impact their ability to thrive in comparison with better performing peers.
Again, like the Eptica Multichannel Customer Experience Study, some sectors are rising faster than others. Financial services (up 2.2%) and entertainment and leisure (1% higher) all improved at a faster rate than the average. In contrast utilities (down 0.8%) and grocery retail (which recorded a 0.1% drop) all took a step backward compared to 2013.
4. Customer experience is a key differentiator
Consumers are increasingly demanding, meaning they expect the best possible experience from every company they deal with. Fail to deliver and they will move elsewhere. Consequently those brands that do not stand out for customer experience risk losing business to rivals, no matter how excellent the rest of their operations are.
5. Companies need to understand what excellence looks like
Given it is a relatively new discipline for many brands, it can be difficult for them to set strategic goals and objectives. Working with a framework, such as Nunwood’s Six Pillars of Customer Excellence (personalisation, expectations, time & effort, integrity, resolution and empathy), gives direction to programmes and helps with measurement on the journey. You can read more about the Six Pillars in this previous Eptica blog.
As the Nunwood study points out, customer experience is now top of the management agenda for companies in all industries. Consequently it is time for laggards to invest in order to improve performance if they are to compete with customer champions in the long term.
Smart organisations realise that the customer experience is the responsibility of everyone within the company that comes into contact with consumers. From frontline staff within branches or stores, through product experts and marketing teams adding content to websites, to senior management, all have a role to play in winning and retaining customers through superior service.
But how do you ensure that all staff have the tools to do the job? The first step is obviously to create processes that span the customer journey and train everyone involved, whatever their department, to work together to make the experience trouble-free. Customer experience/service targets should be set that are relevant to the consumer (rather than simply being business metrics), and monitoring should be put in place to make sure that standards are met.
However, these steps are akin to building a car. Without petrol it simply won’t go, no matter how polished and shiny it is. When it comes to customer experience, knowledge is what powers successful organisations, meaning that it needs to be relevant, current and consistent, and then shared as widely as possible across departments and staff. Centralising knowledge will help ensure this consistency and also drive efficiency. Companies need to create a single, intelligent knowledgebase and then make it easy for it to be accessed and updated, whatever the channel and irrespective of whether it is going to be used by staff or customers.
So how can you take knowledge outside the contact centre? From our work with customers here are 5 different areas where knowledge everywhere delivers business results.
1. Mobile workforce
More and more companies rely on a mobile workforce of engineers and installers making house calls. In many cases this is the only time a customer actually meets a company representative, meaning they are very much an ambassador for your brand. Knowledge, both of the individual customer situation and the technical information they need to rectify any issues, is therefore critical. Arm your mobile workforce with access to your centralised knowledgebase and customer information to ensure that any faults are fixed quickly and customer satisfaction maximised
2. At the Point of Sale
Customers expect the same, consistent information when they are in a retail store, browsing its associated website or simply on the telephone to the retailer’s contact centre. Consequently, it is important to extend access to your knowledgebase to retail staff, either through mobile devices such as tablets or by using the existing technology infrastructure of point of sales devices such as tills.
3. Within the wider enterprise
At Eptica we’ve heard tales of staff moving from customer service departments to other parts of the business, who have pleaded to retain access to the customer service knowledgebase. This demonstrates the power that consistent information can have to help people do their jobs across the business, so make it available to all who need it and extend the range of answers within it to cover all their functional areas by continuously monitoring the types of questions and requests for information. Customers don’t see departmental silos within your business – so make sure knowledge enables you to give fast answers to their queries, whoever they ask.
4. Across the web
The Eptica Multichannel Customer Experience Study found that 53% of companies now have web self-service systems that make it easy for customers to find fast answers online. This is a positive move, and the next step is to ensure that web self-service is available everywhere on your site. For example, use clearly marked question boxes that can be accessed without having to leave a particular page or provide a simple way of asking a question during the customer journey. You can even tailor your knowledgebase to give context sensitive help – suggesting questions and answers dependent on where consumers are on the site.
5. With partners
Few companies manage their complete supply chain. Many outsource part of the customer service function, while others use third party logistics companies to make deliveries or handle returns. Just because these organisations are outside the building is no reason that they can’t have access to either the whole or selected parts of your knowledgebase. This makes the entire process seamless and consistent – after all, in the customer’s eyes you are who they are buying from, so they expect you to deliver, whether it is directly or via partners.
Knowledge is a central part of delivering the customer experience that today’s consumers demand – companies therefore need to make sure it is available everywhere if they want to thrive.
Senior management in today’s businesses are now much more aware of customer experience (CX) and what it means. However, while they may increasingly understand the term and grasp its importance, ensuring that they actively support programmes designed to change and improve the customer experience in their organisation can still be a challenge.
What do you need to do to get senior management buy-in for CX initiatives? Here are three key areas to consider:
1. Gain management attention
The first step is to develop a strong, formal business case for your CX project. What may seem obvious to you needs to be spelled out in language that senior management understand if you want to gain their backing. Do ensure you take these points into consideration too:
- Tailor the message to your audience
The motivations of senior management will differ according to the type of organisation – private or public sector, publicly quoted or not and which market sector. Make sure you use business level language, models and terms they understand to back up your case for investment.
- Build your case from scratch
Management won’t sign off a budget on your word alone, so use third party endorsement to back up your case. For example, what are industry analysts saying about similar projects? If installing new software or hardware, your preferred supplier (and their customers) should provide evidence of business benefits.
- Be flexible and under commit
Make sure that you present a flexible model for CX that can evolve as business priorities change. Adopt a phased approach so that the project can gain buy-in and generate momentum. Ensure you under commit on the numbers so that any business changes don’t completely undermine your case. Go for early wins that validate what you are doing and guarantee future investment.
2. Making it real
Many senior business people already buy-in to the idea of treating customers well but they don’t always change their behaviour or encourage their staff to make changes. To overcome this hurdle, CX professionals need to move on from requesting their support to outlining how individual executives can make real changes. Many managers are unsure about what they personally should do, so it’s important to explain the detail of a detailed CX programme and highlight the activities that each department or team needs to adopt.
3. Use persuasion and repetition
One major challenge is to persuade business executives to change their behaviour in line with CX initiatives. As Forrester analyst Megan Burns says, ‘persuasion happens one-on-one, not in big meetings’. A single rousing speech or packed board meeting will rarely change executive behaviour overnight, no matter how strong the content. CX professionals need to work hard at getting to know individual executives, identifying what matters to them and pitching the CX story so that it complements their point of view. Constant repetition of the CX message will help people digest it a little at a time. While this sounds like hard work, it is what’s needed to create meaningful culture change.
Customer experience is consistently ranked at the top of CEO and senior management priority lists. They see the benefits – but this doesn’t mean they understand the changes that need to be made or the budgets that have to be allocated. Think like a manager, speak their language and build one to one relationships to transform awareness into concrete action.
Whatever the industry, customers now have more choices than ever before. The balance of power between companies and consumer has shifted dramatically due to increased competition, the ability to share bad experiences instantly on social media as well as higher expectations of service. As a consequence, companies that have built their brands and reputations on rock solid customer service are flourishing. Even organisations that previously were accused of neglecting customer service have changed tack and reinvented their brand to be more customer friendly.
Customer service keeps a substantial proportion of the UK workforce employed. Some 70% of us perform roles that involve dealing directly with customers and the service sector generates around 78% of the UK’s GDP. This importance is reflected in National Customer Service Week, organised by the Institute of Customer Service (ICS), which takes place next week, between 6th – 10th October. Originating in America, it’s now celebrating its 30th birthday with events worldwide dedicated to celebrating and improving customer service.
National Customer Service Week day by day
Eptica is a strong supporter of National Customer Service Week and we’re seeing our customers really using it to focus their efforts on celebrating and improving the role of service within their organisation. This year sees the week grouped into different themes for each day:
- Monday 6th October is dedicated to understanding your customer. With changes in technology and channels transforming how customers interact with organisations, organisations and employees need to develop new skills and capabilities. Recommendations for the day include focusing on who your customers are, what channels they use, what their requirements are – and how this will change in the future.
- Tuesday 7th October asks organisations how easy they are to do business with, across every channel. Can consumers find the information they need and do your processes make it easy for everyone within the organisation to work together? One way of testing this is to carry out your own mystery shopper research to see how your customers are treated when they contact you across every channel.
- Wednesday 8th October will assess how effective organisations are when dealing with problems and complaints and whether they have the right processes in place. Do agents have the right training and how do you respond to a major crisis? Use the day to test your abilities, and benchmark against other organisations across your own and other sectors.
- Thursday 9th October looks at the business impact of customer service. How do you measure this and what is the involvement of senior management in customer service? Firms are encouraged to take a quiz which highlights a few trends and facts that many won’t be aware of.
- Friday 10th October is about recognising individuals within an organisation that have gone the extra mile to help customers in need. For example, you could run an awards ceremony to highlight star performers providing a chance to celebrate the best and an opportunity to encourage their behaviour across your organisation.
Redoubling efforts in light of declining customer satisfaction levels
To get ready for National Customer Service Week, the ICS has suggested a variety of activities that companies can carry out with their staff including pub quizzes, events, surveys, satisfaction surveys and a complaints master class. All of these activities are designed to address the stark fact that over the last 18 months customer satisfaction levels have fallen in 12 out 13 sectors, according to the ICS’s UK Customer Satisfaction Index (UKCSI).
It’s never been more important to redouble efforts to deliver the best customer experience. Consumers want faster, more comprehensive service across more and more channels – and have no qualms about taking their custom elsewhere. Whilst we can’t predict the future, it’s highly likely that the next 30 years will see even more challenging conditions for companies. Let’s use this week to prepare to meet this test by boosting long-term customer satisfaction levels.