The Evolution of Retail, Pt. 4: Customer Expectations

The Evolution of Retail: Customer Expectations


Jeremy Duimstra

In the first few articles of our “Evolution of Retail” series, we looked at the importance of using strategy over tactics and shed some light on how to enhance the customer journey. Now that we’ve established those guidelines, we need to move on to figuring out what our customers expect from retailers. We will be looking at these wants and needs from a digital perspective, but will be highlighting the in-store design implications as they apply.

There is a great research study on customer expectations in retail that was conducted by PWC in 2016. We have used some of their findings as we’ve gathered our own conclusions around the digital implementations of the data.

Price

Today’s consumers have more pricing information at their fingertips than ever before. The ability to check competing prices online, on phones, and in the store establishes firm expectations for retailers to be able to price match, and beat, the costs that are found on these different platforms. A good way to mitigate the constant demands to match and lower prices is to offer a level of service that customers can’t get elsewhere. This can include supplying exclusive goods, extraordinary satisfaction guarantees, and friction-free return policies. If price matching is still the only option, it is important to balance these losses with products that generate enough profit to cover them.

Stock

Customers expect items to be well stocked in the store. Largely, modern inventory systems and streamlined logistics are able to control and fix stock issues when they arise. If you’re a retailer with legacy systems that don’t fix supply issues, you need to replace them because you’re at a serious competitive disadvantage. However, if you have modern systems, and outliers occur that cause stock to run out, customers’ frustrations can be calmed if they are offered the option of ordering out-of-stock items via their phone or other in-store digital methods. When these alternative options are coupled with the guarantee of fast shipping, the customer’s goodwill towards the retailer can be maintained and the problem of these outliers is greatly diminished.

Omni-Channel

We’ve covered the immense benefits of omni-channel in previous articles, but it is worth mentioning again in this context. Consistency between channels is the key to the customer journey. Single-Sign-On is paramount to this effort – customers do not want to have to keep track of different logins for different platforms within the same store (website, app, loyalty programs etc.). The single-sign-on model can be elevated in the in-store implementation. Technology allows for cross-pollination between customers online actions and their brick and mortar experiences. If physical stores are aware of the statuses of their customers’ online shopping carts, they have the ability to physically guide customers to their unpurchased items in the store using their phones. Tying these experiences together seamlessly defies customers base expectations while vastly increasing sales across multiple platforms.

Mobile Commerce

The online shopping tool of choice is rapidly transitioning from desktop to mobile devices. According to Business Insider, mobile commerce will reach $284 billion, or 45% of the total U.S. e-commerce market, by 2020. Savvy retailers are creating mobile optimized shopping experiences that are able to deliver on their brand’s promises. Customers expect the same high-quality service that they get on a website, or in the store, on their mobile devices. For the digital landscape, this means that things must load quickly, have an easy-to-use interface, and evoke an emotional bond to the brand.

Community

Customers are looking for social connections while they are shopping. From peer reviews to chatting with friends on the latest styles and trends, today’s shoppers are tapping into their friends and virtual communities for help in navigating product offerings.

PricewaterhouseCoopers (PWC) polled 22,618 digital buyers ages 18 and older. Respondents had shopped online at least once in the past year. Nearly half (45%) of digital buyers worldwide said that reading reviews, comments and feedback on social media influenced their digital shopping behavior. Some 44% of respondents also said that receiving promotional offerings also influenced their shopping behavior.

At MJD, we’re exploring innovative community technologies that can enhance these experiences. This can include things like building in-store digital experiences that connect to Facebook or a chat client to allow shoppers to get opinions from their friends and family before making purchases. These sorts of technologies are showing great promise.

Experiences not "things"

People, especially Millennials, want to buy experiences, not “things.” They want their money to be spent on a life well-lived, and digital has a big place in their lives. Digital experiences add new layers to the ways these millennials experience the retail world. Even the smallest of experiences can connect to customers on an emotional level to tell a powerful story.

Speed

Lastly, we want to touch on a very significant undercurrent of customer expectation in retail: speed. By and large, people want things NOW. Deloitte’s 2016 Holiday Survey says that customers in 2015 viewed “fast shipping” as anything within 3-4 days. In a single year, that figure dropped to within 2 days. This is how Amazon Prime is succeeding and, in turn, affecting all retailers. How do retailers compete? One suggestion is to use store design and logistics tools to turn community stores into miniature distribution centers. Combining this with courier services like Uber allows companies to compete, and beat, Amazon’s regional distribution center model.

Conclusion

Through our research, we’ve found that these are a few of the standout customer expectations in today’s retail marketplace. Some are more challenging than others, but using the right mix of digital innovation and store design to create ideal customer journeys is the way to compete in today’s retail marketplace.

MJD Retail Solutions


The Evolution of Retail, Pt. 3: Enhancing the Customer Journey

The Evolution of Retail: Enhancing the Customer Journey


Jeremy Duimstra

“Macy’s and Sears Holdings to close a combined 226 stores”
“Is There Any Saving Macy’s?”
“On the heels of Macy’s and Sears, another major department store announces it will close locations in 2017”
The headlines are dire. Retailers are worried. But the future of retail is bright for forward-thinking brands that are willing to embrace new ways of doing business. In our last post, we talked about omni-channel strategy and digital tactics in the ‘Store of the Future’. That’s the first place to look when a retail ecosystem needs fixing. In this article we will explore how customer journeys can be enhanced with new ideas and technology to increase sales and profit and, in turn, begin to fix the cracks in the retail world as we know it.Interested in the whole “Evolution of Retail” series? Sign up and we’ll let you know when each article is published. We’ll also send you a PDF of the entire series at its conclusion.When marketers realized that the final transaction wasn’t the only key metric in the purchasing funnel, the idea of curating customers’ journeys was born. By measuring every touchpoint along the funnel and giving proper attribution to each and every experience a customer had with a brand, marketers were able to see which ones resulted in sales. This very visibility into attribution, and uncovering the sales and ROI it converts, led to the realization that consumers hold the ultimate power during the customer journey. In an instant, a consumer can be very close to buying, and then disappear. E-Commerce pushed this visibility even further and allowed marketers to price check everything. The result was what retailers dreaded most: a downward race to the lowest possible price. To win this race, retailers are required to produce a high volume of sales while reducing the number of high cost of physical locations they are supporting. In essence, this is the Amazon model.This model is contributing to the woes of traditional retailers, and that is leading to a seismic shift in their operations.Retailers like American Girl, Nordstrom, and others are starting to lead with innovation within the customer journey in order to re-set the race to lowest price. They are creating value through digital software platforms, automation, and IT efficiencies to reduce overall costs. In doing so, they are crafting extraordinary, personalized brand stories that resonate with customers and inadvertently lead to increased purchasing.

Platform Design

One of the primary tactics we’ve used to create substantial retail business efficiencies is through something we call Platform Design. Platform Design lowers overall costs while making interactions with customers much more personal and enjoyable.

Most recently, we helped build customer journeys through platform design by combining a mobile application experience with dynamic inventory tracking, product suggestions, and consumer guides. The mobile app allowed users to customize a product, and buy appropriate accessories for their custom product. From there, we connected to a centralized inventory system that checks to see if all the components in the custom order are available and determines whether or not there was an excess of stock warehoused for any particular accessory. By using technology to detect inventory, dynamic pricing was used to discount the accessory for the client where necessary. Fulfillment was then able to electronically receive the order, build it automatically, and ship it to the client. At the tail end of the journey, the customer was able to further their interaction with the brand by being able to log into the brand’s website to obtain help in configuring the customized product. Through single sign-on, the system was capable of knowing exactly what was purchased and was able to serve up help videos to guide them through configuration. At the end of the journey, customers feel the thrill of a seamless and unique product experience. These emotions are what platform design zeroes in on and uses to tie consumers to brands.

To build on that, we’ve found that the journeys we are building aren’t limited to the online ecosystem. Using innovation to guide customers through physical stores is just as important. For the in-store customer we’ve taken this realization and built a mobile app that is capable of reading in-store beacons and triggering a CRM to obtain recent purchases from the customer. In addition to knowing past purchases, the app can entice in-store customers to make purchases outside of their typical buying patterns. If, for instance, the app is able to notify the customer that certain accessories purchased in the past are items that typically run out, we are able to provide an in-store map guiding them to the product where the customer will not only be tempted purchase the product, but purchase multiple products so that they do not run out. The effortlessness of the in-store  journey cultivates repeat customers using brand loyalty, just like it does for the online customer.

Automation

Automation is the process of replacing formerly manual activities with digital magic. It is another one of the key factors that makes enhancing customer journeys possible. A great example of this can be seen through our work with GoPro. A typical GoPro customer would go out surfing and capture some amazing video. They would get back to the parking lot, jump into their car and want to immediately share a 15 second clip of their surfing session on Instagram. In order to do that, they would have to manually plug the camera into their computer, download the files, edit them, and finally post them. This was a major pain point for customers. To alleviate this, we automated the process by using wifi to transfer the files to customers’ phones with no manual process necessary. Customers are now able to shred waves, get in their car, have the mobile app see their camera, magically downloads the files, edit and post to friends and family in seconds.

This is just one example of the plethora of ways that digital is automating the customer journey, but automation itself can be tricky. From a customer’s standpoint, automation either needs to be invisible or interesting. Technically, making automation invisible is difficult. You have to think through user experiences to make the technology disappear. That’s hard. But if you pull it off, the rewards are substantial. Automation that interests and delights is less technically demanding, but requires a strong experience on the part of the user. One of the best ways to create that sort of an experience is through personalization.

Personalization

The days of broadcasting a marketing message to one monolithic group of customers have passed. Technology has allowed marketers to craft messages on a one-to-one basis between their brand and a single shopper. Personalization takes these messages a step further. In our work for retail clients, every part of the customer journey is personalized. Once a customer has created an account, the websites, mobile apps and physical stores they interact with all change for that particular person. When a customer walks into a store, they can be digitally welcomed by name. Or, a notification can be sent to a store associate who can give them a warm, human welcome and assist them. This allows for storytelling on a very intimate, human level. By bringing elements of joy to customers by making them feel special, we are providing increased lifetime value to brands through personalization.

According to a study by MyBuys and the e-tailing group, 40% of survey respondents said they buy more from retailers that personalize their shopping experience across channels. Based on sales data from MyBuys’ database of over 250 million shoppers, customer-centric marketing delivers a 25% increase in total online sales and a 300% improvement in customer lifetime value. (Datamentors, 2015)

Creating a personalized story for a customer’s journey requires context. This leads us to the final part of our customer journey: contextual interactivity.

Contextual Interactivity

Knowing where in the customer journey your customers actually are allows you to interact appropriately with them at a given time, in a given place. The “platform” mentioned above is the tool that allows that to happen. If, for example, a customer is on your website looking at a product for the third time, analytics and CRM can identify this and dynamically serve the right message to that person to get them past the tipping point of buying. On the other hand, if a customer is walking into a store for the first time, their context is vastly different that that of a loyal customer who visits the store regularly. Each customer is different, and should be offered contextual interactions that are personalized to their particular situation. The first time shopper could be welcomed via a digital display that shows them wayfinding through the store. The loyal shopper could get a text notification on their phone letting them know how many loyalty points they have, and that they’ve earned a free ‘favorite’ beverage (identified through POS analytics) at the store’s cafe. Context and personalization together form a powerful tool to build strong customer affinity for brands and round out the enhanced customer journey consumers are seeking.

Conclusion

Navigating the complexity of a retail world that is neither bound by brick and mortar or the world wide web is difficult. Consumers are seduced by quick, easy, and cheap solutions that are often detrimental to profit margins and growth. Meeting customers where there are in today’s landscape and watching their exploration within a brand is the key to getting out ahead of broken retail stores and/or clunky digital solutions. Using automation, personalization, and contextual interactivity to enhance a customer’s journey forms a bond with consumers that allows for innovation that will both surprise and delight them.

At the end of the day, it is innovation that we’re after. Innovation that is not only digital, functional, or creative – but, a combination of all three that bonds us together and allows us to grow.

MJD Retail Solutions


Prototyping: Why, When, How

Prototyping: Where, When, How


Jeremy Duimstra

Why Prototype?

People working in the UX, Design, and Engineering fields are very familiar with the benefits of prototyping, but let’s look at it from the client’s perspective. What are the main reasons that a client should want to prototype digital products and experiences before committing to a full on build?

There are a couple of main reasons: First, when you prototype, you get a first glance into what features your audience will actually use. The “If you build it, they will come” mantra does not work in the digital product development world. For this reason, testing prototypes to ensure that what you’re building connects with and will be used by your audience is always recommended.

Second, it saves money. Plain and simple. If you prototype, test, and iterate on a product early on – you will save a ton of cash before hardcore (and expensive) engineering even begins.

When should you prototype?

Prototypes play a huge role in bringing ideas to life efficiently because they provide a vivid portrayal of our creative plans and allow for quicker internal user and client feedback. Prototyping is a journey that extends from initial project ideation to user experience and design, and through final engineering.

Prototyping is particularly useful when used alongside the Design Thinking model of product creation. Our entire process is propelled by Design Thinking. For us, it is the mechanism through which innovation and creativity can be unleashed. The three stages of Design Thinking include Inspiration, Ideation, and Implementation. Prototyping is useful in each stage.

During the inspiration phase, we conduct field research to gather insight from the world around us. This includes doing a comparative analysis of competitive products and observing elements within our environments that contribute to our vision for a product. Creating low fidelity prototypes at this stage often adds fire to our inspiration. Perhaps something we saw during field research resonated with us. Something as simple as a napkin sketch passed around for feedback can generate new ideas. That, my friends, is lo-fi prototyping.

In Ideation, we go to the next level. In this phase, we still do lots of sketching, but we also start enhancing our prototypes by building them in Adobe XD, Sketch and Photoshop. We begin testing these prototypes in InVision, which allows us to start clicking around from screen to screen while animating things. This is when initial user testing can begin. We like to get our ideas in front of our audience as soon as possible before a lot of budget gets spent.

Finally, we keep prototyping and testing through Implementation. In our experience, almost every significant project ‘pivots’ at least a little when you receive feedback on a prototype. Your first idea is rarely the best, and prototyping gives you that information. The prototypes used during Implementation get successively higher fidelity until you end up testing something that is nearly identical to the final product. That typically takes some iterations, but each iteration is well worth the time.

How do you prototype?

Prototypes aren’t a one-size-fits-all solution. Every project is different, and each stage during a project needs various levels of prototyping. We mentioned napkin sketches, Photoshop and InVision above, and those are great examples of both low-fidelity and medium-fidelity prototypes.

Before jumping into higher fidelity models, I think it’s important to reiterate how important the lowest fidelity prototypes are to product design. There is a concept in the UX world called Lean UX. The staples of that concept are that low-fidelity sketches, whiteboard sessions and lightly documented ideation are all more efficient than jumping into (or even doing) high-fidelity wireframes and information architectures. Those high-fidelity documents usually incur a lot of time to produce and become out of date almost immediately after creating them. This is the nugget of gold in this article: People can provide just as rich and insightful feedback on a crappy napkin sketch or a 30-minute whiteboard session as they can for an entirely functional, beautifully designed, finished product. Save yourself the money and show somebody a sketch.

But, I digress. There is also value in high-fidelity prototyping. Once we’ve begun testing with Invision, we can start establishing an understanding of what our audience likes about the product we’re building. We can confidently start engineering some features that have the potential of making it into the final product. In addition to initial engineering, we also use tools like Principle, Framer and After Effects to start adding sophistication, movement, and interactivity to our prototypes. These tools allow us to move things around on the screen, press buttons, hear sounds and watch video so that we can start playing with things. An extra bonus to using these tools is that they all spit out code that can be utilized once engineering starts. By continuing to test these hi-fidelity prototypes, we get closer and closer to eventually landing on things that we’re pretty darn sure we’re going to build. But it doesn’t stop there.

We continue to “prototype” products as we jump into final engineering. At this point, it’s not technically a prototype anymore. It is real, working software that will eventually ship. However, as the build progresses, we continue testing with users so that we can watch them break what we’re building, fix what’s broken, and do it all over again until the final product is ready. It’s important to note that ‘final’ does not mean ‘perfect’. If you wait for perfect, you run the risk of getting beat to market by a slightly less than perfect competitor, and you will lose your edge. Moral of the story? Prototype, prototype, prototype, then SHIP.