eCommerce baked-in customer service as a standard. Perhaps early innovators recognized its importance as a differentiator from in-store retail, or maybe it came naturally. Regardless, many traditional retail giants chose to ignore it altogether. In the stories that follow, we’ll explore vast disparities in customer service driving traditional retailers toward bankruptcy while simultaneously skyrocketing eCommerce sales.
Good CX Demands Good Customer Service
Major retailers now seemingly compete with airlines, telecoms and power companies for the worst customer service. The key difference, however, is the range of alternatives. Most regions of the U.S. don’t get to pick between more than two horribly aggravating cable providers, while anyone in the world can choose Amazon over local retailer. As a result, the need for retailers to optimize their customer experiences through customer service is paramount. However, those who only recently realized this may be too late.
Jura Live! A Customer Story:
“Jura LIVE! allows customers shopping online to make live video appointments at their convenience, from the comfort of their own home. Customers can see the products in action in real time and leverage the knowledge of a sales rep. to help them make a purchasing decision. For a luxury product such as a super automatic coffee & espresso machine, this adds a significant amount of convenience to the customer’s experience while also dazzling them with high-end technology. These types of high-touch online experiences help the sites that have them dominate those without. Unfortunately, most brick & mortar stores don’t offer these experiences because they refuse to adapt.”
-Dave Gardner, Sr. Account Executive & Team Lead at Redstage
How Retail Heros Became CX Villains
Sears, JC Penney, and Toys “R” Us are known for major missteps that downgraded their in-store experiences and alienated customers. Sears simply stopped investing in its stores. Years ago, company leadership decided to introduce a poorly-managed customer loyalty program that caused much more harm than good. The “Shop Your Way” program caused extended checkout times; both for customers waiting in line behind someone signing up for rewards AND for loyalty members who facing constant discrepancies in “deal” prices at the checkout.
The Fall From Grace
When sales declined, products began to downgrade, the stores themselves fell to disarray, and customers naturally opted for other retailers like Macy’s and Home Depot. As a poorly planned remedy to decreasing sales, Sears chose to cut in-store staff in half across their locations, propelling worsening structural conditions that led to closures all over the U.S. To this day, the company continues to pump products into stores that no one will buy, without the necessary human capital to even unpack them.
A Sears Auto Story
Recenty, Redstage’s CEO Adam Morris had his own customer service blunder at Sears. He entered Sears Auto looking for a particular item, couldn’t find what he wanted, and exited the store only to discover his car had been towed. According to Morris, the towing company contracted by Sears was watching the security cameras while he was inside. Because he parked in a space for “Sears Auto Customers Only,” and hadn’t made a purchase, he wasn’t considered a customer, which allegedly gave the towing company license to tow his car.
In an attempt to get assistance from Sears, Morris spent hours on the phone with a “rude or unhelpful” customer service representatives. At the end of the ordeal, one rep told Morris to file a police report if he felt he was wronged. He had to pay to get his car back — more than the cost of the item he initially intended to buy.
Think he’ll be heading back to Sears anytime soon?
Alienating Your Audience
JC Penney’s downfall came when it decided to switch to “low everyday prices” rather than focusing on their weekly coupon deals — something that created buzz from local customers and drove them to stores. At the same time, JC Penney switched focus from inexpensive products to more upscale merchandise, further alienating their customer base. As a result, shoppers decided to shop elsewhere. For a company founded on a middle class audience and low prices, this change was a signal for lifetime shoppers to exit, with seemingly no plan in place for attracting a higher-paying target audience.
Toys “R” Us CEO David Brandon mentioned in a recent SEC filing that the toy giant’s inability to invest in customer experiences in-store accelerated the death of the company. Last fall Brandon said the company’s mounting debt caused them to lose their competitive edge “on various fronts, including with regard to general upkeep and the condition of our stores.” In addition to the “general upkeep” Brandon mentions, if you’ve walked into a Toys “R” Us outside of the holidays, you’d understand. The massive store would appear as a moonscape, cold and nearly lifeless, save one or two employees and some barely audible music. Is that the environment that makes kids and parents think of fun?
This blog post does an excellent job of describing how Toys “R” Us could have boosted their customer experience through the roof, and honestly, it was probably within reach. “Special store events could include Nerf gun battles and dress up contests. Store representatives could excel at providing toy recommendations for particular age groups and interests (ever wondered, “What the heck do a get for my 8-year-old niece for Christmas?”).” These are the customer service based experiences consumers expect in our high-touch world. With eCommerce personalizing every customer interaction, it’s no wonder retail’s value continues to diminish.
Here’s Why Retail Will Die
As we can interpret from the examples above, traditional retail’s refusal to adapt (or perhaps retail’s lack of understanding about eCommerce) will be the industry’s ultimate downfall. One-time giants like Sears are ignoring systemic issues that directly impact in-store and over-the-phone customer experiences. Customer-minded marketing, store upkeep, and customer service — once staples of the retail experience — are being outsourced, downgraded or eliminated.
How To Bring The Magic Back
In a last-ditch effort to get customer engagement, Toys “R” Us launched an AR app called “PlayChaser” to create gamified in-store experiences. There were a few issues with this, like parents who didn’t want their kids running around a massive store with their tablet — and also the fact that the company had already declared bankruptcy — but the intent was there. Toys “R” Us was ready to repent for decades of customer boredom, but it was too-little-too-late.
Retailers seeking a strong, successful revival need three things:
A unified strategy that blends digital and physical experiences while thinking realistically about in-store capabilities (like employees, upkeep, and tech).
A highly-tailored online experience that combines hardcore marketing tactics with artificial intelligence to boost customer retention & sales (watch video).
Unrelenting customer service that makes everything easier for the customer (yes, we mean everything). Understand your customers and meet their demands.
Circuit City recently announced an ambitious plan to resurrect the company with an eCommerce focus and an impressively cool omnichannel strategy. The digital retailer relaunched February 15th and is moving forward rapidly. If Circuit City can make a comeback, maybe it’s time for other retailers to get with the program.
Earlier this month, IKEA emerged as the sleeper champ of retail’s augmented reality arms race. On the AI front, companies like Emarsys and Edgecase released ecommerce products that use advanced machine learning techniques to automate time-consuming data analysis and predictive forecasting strategies for retailers.
With such tools available to manage mass audiences and their data, this is an opportunity for tech-minded shops to get a leg up on the competition. As a result, we can expect to see some large retailers (those who fail to adapt) fall behind in a relatively short amount of time. Survivors of this retail purge will make themselves known in the next year or two as these technologies become cornerstones of ecommerce. Here are some big changes to expect in the new paradigm of online shopping that everyone will be adding to next year’s budget.
“The IKEA Effect”
Diving into Apple’s ARkit early-on, the home furniture & appliance giant successfully launched an AR app that lets users view how IKEA’s furniture will look in their home by selecting products from an online store. Released with iOS11, the brand was primed for a massive market reaction. Sure, the items still have some issues (they don’t adapt to lighting too well and their textures aren’t quite realistic), but as the first retail brand to jump into AR, the starting gun has been fired, and many companies are racing to capture value through this technology.
Redstage CEO Adam Morris sees huge potential for AR in ecommerce, stating, “There’s certain industries that I see really benefiting from AR, especially companies where seeing the item in-person plays a huge factor. I believe jewelry sales could be completely revolutionized with AR, and then on to home goods like furniture.” However, Morris notes that the ecommerce industry typically lags a few years behind the latest tech trends, relying on major user adoption for companies to jump on the bandwagon. “For instance,” he recalls, “we talked about ‘mobile-first’ for years, well before companies would begin implementing it. Most didn’t pull the trigger until they had no choice — when mobile users made up more than thirty percent of their user base. It’s easy to argue that the industry is still doing a horrible job at mobile commerce, even now with roughly two-billion online shoppers using mobile.” Perhaps the companies that have been slow to catch up with mobile will double-down on AR, or risk giving up their market share to the brands that do.
So what happens when health and beauty retailers jump onto this train? If Snapchat can already morph your face and add eye-shadow, will brands like Ulta Beauty and Maybelline step up to the challenge? How will consumers react to no-longer trying on makeup in-store, or to saving bundles of cash testing it through your app? Years down the line, this may even change the supply chain, because stores can test products without actually making them, without buying in bulk, and never worry about hemorrhaging money selling-off failed product. Will proactive make an AR filter to show what you’d look like without acne? Will Schick and Gillette face-off for a chance to show you how to carve up that beard? Furthermore, what will become of Snapchat, now that the company announced it will let brands create their own AR features? The possibilities are endless, and the brands that don’t engage AR or continue to view it as a passing trend will feel it in their bottom lines sooner or later.
Emarsys’ ecommerce platform is taking the world by storm. Using artificial intelligence to automate various customer retention and acquisition strategies, the AI uses machine learning to quickly create the perfect online shopping experience for each customer. Designed by Forrester, the system quickly crunches oceans of data about site visitors to cater to their needs and desires. After uploading two years of historical user data, ecommerce companies can maximize ROI on existing users. For new users, the Emarsys AI takes an average of 8 weeks to optimize the customer journey and activate recurring campaigns to keep engagement high. While there are many AI competitors out there, Emarsys boasts a robust, user-friendly platform that creates a truly personal experience for each shopper. As Morris describes it, “AI is becoming essential to work personalization into ecommerce, and machine learning systems offer huge advantages over rule-based systems. Marketers do not need to spend nearly as much time tweaking and administering a rule-based system when the AI is optimizing it automatically.” He adds, “We had a customer that doubled their newsletter list from 50k subscribers to 100k. However, since they did not employ any personalization strategies for what products were beingpresented, they only received a 15% increase in revenue from that channel.” As ecommerce threatens to surpass in-store sales (Business of Fashion) personalization of branded messages is critical. What are you doing to cater to each customer?
Fringe Shoppers Beware
We all do it. We’ll aimlessly surf Amazon or another online retailer looking for something cool to buy, even when we don’t know exactly what we want. Edgecase, the company formerly known as Compare Metrics recently released a new product that helps convert shoppers who have a vague idea or even no idea of what they want. In a time where ecommerce and marketing penetrate the lives of every consumer, tools like Edgecase that help convert the shopping addicted masses are becoming hugely important. When integrated with an online store, the software makes selections for users based on what they’re thinking of (i.e. a blue dress in a certain size) rather than a specific brand. Users can also receive lists of recommended items when shopping for a specific event like a wedding or graduation. As we enter that special time of year, consider how a system built to convert fringe shoppers can have massive impact.
As the holiday season looms, companies taking advantage of AR and AI pose the biggest threat to your bottom line. As the ecommerce arms race ramps up, winners and losers will be defined by how they spend their 2018 budget. Make sure you’re planning to implement these tactics by next year’s holiday rush, or risk being left out in the cold.
When it comes to ecommerce, email is the most vital and potentially profitable channel in your marketing arsenal. According to the Direct Marketing Association, “Segmented and targeted emails generate 58% of all revenue”. That number alone should get your blood pumping, but if your email campaign ROI is lacking, it’s time for some big changes.
1. Use Clear CTAs.
The subject line and opening text are the first part of the email anyone interacts with. The shorter the subject line, the more space the first bit of text in your email will occupy in their inbox (So make sure your opening line isn’t the default “Can’t Read This? View in browser” text… Use this real estate for something more valuable). This is your elevator pitch in ~72 characters. MAKE. IT. COUNT. Be sure to use a subject line that is catchy and engaging. Most customers won’t bother to open an email if the subject fails to pique their interest or at least stand out from the multitude of other marketing emails they receive.
Intend to resonate with the specific demographic you’re targeting, and avoid generic sales words. If it sounds too sales-y, you’re damned to the spam box. Too specific, i.e. “Hi John I saw you looked at our page…” and you’re creepy. Seek balance, and don’t be afraid to A/B test. Your subject line should always inspire someone to click, so aim for powerful call-to-action words like “Jumpstart,” “Command,” and “Unleash” (if applicable).
2. Segment Your Customers.
As I mentioned above, subject lines should be specific to the intended target. This could be 1 person or several thousand, as long as you can get a little specific and make your target feel like the email was tailor-made for them. No customer is created equal, but if your customer analytics are up-to-snuff, you should be using that data to segment your audience by demographic location, gender, age, product category, or at least their general interest area. Amazon isn’t sending emails to middle-aged men about hair dryers. Neither should you.
3. Make Yourself Known.
Your email sender ID can make or break your response rate. Use a welcoming, approachable email ID to send out emails to customers. If there’s a photo section, choose a happy-faced employee’s headshot rather than a cold-faced logo. It’s simply more personal. Lastly, and this should go without saying, you’ll get more feedback from customers if you use and email they can reply to… Instead of using an email such as [email protected] or from [email protected], use a person’s name. Humans enjoy talking to humans. Be human.
4. Personalize the email.
Personalize the email by using the customer’s name. This makes the customer feel valued and inherently makes the connection more personal. You can use *first_name* tags in the body of the email, as well as the subject line (with some email clients).
5. Content Is Everything!
Don’t underscore the importance of style when writing your customers or clients. All images and written content should be of the highest quality (especially because misspellings are usually seen as spam indicators). Less is more: To grab the attention of recipients, keep your copy simple and to-the-point.
Avoid ALL CAPS at ALL COSTS. Refrain from overuse of exclamation marks, images and gifs. Many studies have shown that more images lead to lower response rates. Not only are multiple images too heavy on the eyes of your customers, but your email could fall victim to loading time or formatting issues. These are common on certain devices, which can severely distort your message. If you’re showing off a product or something else that’s photo-heavy, put a “learn more” button that links to a page on your website for external content. It’s easier on them, prevents distortion of message, and if you’re tracking clicks, this can help qualify interested leads. It’s a win-win. Most importantly, the content of your email should be something your customers look forward to, so offer something valuable instead of asking them for something (if you can avoid it).
“Of the 100+ e-commerce companies that I’ve worked with over the past few years, the most successful are those that take the extra time to formulate and execute well-thought out e-mail marketing campaigns. Your e-mails are being seen by all of your clients and prospective clients; optimizing these touchpoints will help you increase sales while strengthening your brand.” -Dave Gardner, Senior Account Executive & Team Lead at Redstage
One Final Note
According to the Direct Marketing Association, only a mere 7% of SMBs use emails as a branding tool. In fact, most Magento users aren’t customizing their transactional emails at all. Luckily, Redstage is launching a new product, offering unlimited customization of Magento Transactional Emails. Our team will work with you to create stunning email templates tailored for your specific needs. You’re already sending at least 4 emails to every new customer – let’s optimize every one of them to enhance your customer experience. Learn More >