To help retailers and brands in 2019, Claudia Tajima and I are interviewing experts within Forrester for our series, “Applying 2019 Predictions To Retail.” Recently, we spoke with J. P. Gownder about how automation will affect retailers in 2019. Next, Claudia interviewed Harley Manning, VP and research director of Forrester’s customer experience (CX) team, about his team’s 2019 CX predictions research. Here’s what Harley suggests retailers and brands can expect and should focus on regarding CX in 2019.
Claudia Tajima: Does the overall trend of stalling customer experience apply to the retail industry, as well?
Harley Manning: The average Customer Experience Index (CX Index™) score for US digital retailers went down about a point in our rankings, and across 19 industries, no company broke through the 85th percentile to make it into the “excellent” category. These CX scores are stalling because companies are taking a “find and fix” approach, which means they’re just making small incremental improvements. At the same time, customer expectations are rising slowly — but faster than brands are making improvements.
Another trend we see is brands copying other brands, which is the opposite of differentiating themselves. What retailers and brands need to do is to break away from the pack and stand out — in other words, to do something big and transformational. This could be something like nurturing and launching a big advance in CX, making incremental improvements in CX combined with differentiating in some other way, like price, or by having a truly unique product (e.g., Apple with the first smartphone). That’s all hard — but it was never going to be easy to have sustainable differentiation in the marketplace.
Claudia: Do you predict that retailers’ efforts to make a full-on CX transformation business case will grow?
Harley: Every company that has a CFO who owns fiscal responsibility knows that the books have to balance. It is never a winning argument to ask the CFO and the board for a big check without being able to tell them if it will be a good investment. A growing number of business leaders are biting the bullet and finding someone who can build a business model for them, including a CX ROI model.
How do you do that? To prove results, you need to structure a measurement program that can tie individual behaviors to outcomes. These models and measurements have evolved over the past year or two, and the companies that are working on them seriously are generally doing a good job. Another rule of thumb here is that if you want to see overall company improvements, you need to make changes throughout the company. For example, if you only invest in improving CX in the men’s apparel section, you will only see improvement there, not for the brand as a whole.
Claudia: One key trend highlighted in your predictions report is that the growing demand for CX talent is giving a limited number of job-seeking CX pros more choices and more leverage. How will retailers looking to recruit CX pros be impacted by a shortage of CX talent?
Harley: Right now, the need for CX talent is greater than the number of available, skilled CX pros. There is a war to scoop up the top talent already happening, and we expect to see it accelerate. What’s more, companies that are very customer-centric work hard to attract customer-centric workers for every job in the company, not just CX. For example, Trader Joe’s built a culture such that if someone wanted to work in a supermarket, Trader Joe’s is by and large the most desirable company to work for. For one thing, they pay full-time employees the US median household income and give their part-time workers healthcare benefits. But it goes well beyond that: Trader Joe’s goes out of its way to hire and retain cheerful employees who want to be out on the floor, serving customers. That even applies to store managers, who also spend most of their day out on the floor interacting with customers. Trader Joe’s gives those store managers, whom they call “captains,” high control over the product assortment in their store because they’re trusted to know what the shoppers in their market want.
Claudia: What should retailers have at the top of their minds in 2019 when it comes to CX?
Harley: One thing that companies can’t lose sight of is the importance of the human element, which can be improved in areas such as call center services. There are some interesting technologies to help call center agents to become more empathetic people. For example, Cogito’s product listens in the background to customer service calls, analyzes voice patterns, and coaches the human agent in real time, suggesting when to slow down, ask a question, or say something empathic to diffuse a heated situation. And Etsy embeds its customer experience research and design experts in the lines of business so that everyone from engineers to product marketers are constantly informed by the authentic voice of the customer whenever they’re making a decision that affects customers. That’s a great way to infuse the human element into every aspect of a retailer’s business.
Stay tuned for next week’s interview, in which we’ll speak to Sam Stern about employee experience. For more information on where the retail industry is headed and how to prepare your business, join us for our complimentary webinar event, “Future Of Retail Three-Part Series.”