Online retailers that provide consumers with a good user experience generate loyalty and repeat visits, according to a new report from Forrester Research Inc.
That’s one takeaway from Forrester’s new report, “Five Practices to Succeed with Your Retail eCommerce Strategy,” released this month, which details several ways merchants can bolster the customer experience. The report is based on a survey Forrester conducted of e-commerce professionals in November 2016. Sample sizes varied depending on the question, the consultancy says.
Retailers looking to improve their user experience should invest in efforts that bolster their site usability and customer experience, such as keeping proper staffing levels and conducting research on how consumers use their site, according to the report authored by Ananda Chakravarty.
Mastering basics such placing content in the relevant spots, maximizing efficiency for shopping and fast load times are crucial to shoppers: 61% or U.S. adults who shop online are unlikely to return to a site that doesn’t have a satisfactory experience and 47% are very likely to abandon an online purchase if they can’t get a quick answer to a question, he writes.
Retailers may be understaffing their usability, consumer experience and creative teams, and that can lead to missteps or lack of communication, Forrester says. Consumers own an average of 4.5 digital devices, and they expect a smooth, consistent shopping experience regardless of what device they’re using. “Find ways to bridge the difference between customer experience and UX such that work by UX designers maps to the business objectives in the organization,” Chakravarty writes.
A good rule of thumb is to have at least one user experience professional for every two product managers and 12 engineers, which is a formula Forrester outlined in an earlier report, “How To Organize For Effective Digital CX.” And when design changes are considered or made, a retailer should incorporate “rigorous user testing and usability research.”
Choosing the right technology and using the right vendors for those technologies also is essential to improving customer experience.
Retailers outsource 40% of front-end development work and more than 20% of other functions that include marketing, technical infrastructure and user experience, but 96% of digital experience professionals report challenges working with vendors, Forrester says, noting that 294 “digital experience decision makers responded to the question in its Q1 2017 Digital Experience Delivery Online Survey.
“Digital retailers that passively manage these relationships risk incompatible development processes, a lack of backup plans when vendors change and possible misalignment with company goals,” according to the report.
Forrester recommends retailers test innovative concepts. But it is even more vital for an e-retailer to focus technology efforts on time-tested and established technologies with proven benefits.
Retailers also need to find and retain good digital talent because many online retail executives find it difficult to fill data and analytics positions.
“How do retailers hire for these specialized roles? Some retail digital business units find fresh talent by staging publicity-driving efforts, like Walgreens’ hackathons, or by launching innovation labs, as Staples has done,” Chakravarty writes. Staples Inc. is No. 5 in the Internet Retailer 2017 Top 500.
Retailers must offer tools and incentives for candidates to join their team, such as offering flexible work hours; have a capable human resources team and strong digital team; and have an attractive culture, according to the report.
Training and and retraining existing information technology staff can help grow talent internally and attract younger hires, and rethinking recruiting methods also can help. For example, Wayfair Inc. (No. 16) hires from such schools as Harvard University and others with top-tier Master of Business Administration programs, Forrester says.
Another way retailers can improve their e-commerce strategy is by taking a holistic approach to omnichannel strategy that factors in fulfillment, marketing, merchandising and customer service.
“In 2016, over half (57%) of digital strategy professionals reported that their firms offer or plan to offer their customers omnichannel services, however, 47% of them report that their firm does not have the right processes in place to execute on a consistent omnichannel strategy,” according to the report.
Retailers should build a single view of their customers, with unified account information and order histories. This involves merging online and offline customer data to generate a fuller picture of customer engagement.
“Start with some initial omnichannel services and excel at them. Then develop your road map for next-level capabilities,” Chakravarty writes.
Finally, the report suggests retailers should develop metrics that integrate online and offline customer data from start to finish in the online shopping process.
“Introduce new metrics across channels to capture a holistic picture of online influence and last-mile delivery,” the report states. “Macy’s achieved a complete view of the customer by aggregating consumer data (such as preferences and purchase patterns), thereby improving marketing and merchandising relationships.” Macy’s is No. 6 in the Top 500.
Artificial intelligence can enhance a retailer’s metrics and understanding of its customers. For example, German retailer Otto Group, No. 2 in the Internet Retailer 2017 Europe 500, uses an AI-based merchandising solution to predict customer purchases two weeks prior to purchase, Forrester says. “Otto.de asserts that the system can predict the next 30 days of sales SKU volume with 90% accuracy. Otto.de allows the AI system to purchase over 200,000 items per month with no human intervention, reducing surplus inventory by 20% and product returns by 2 million per year,” Forrester states in the report.
Logistics metrics also matter and, when done right, fulfillment and delivery will become a differentiator for retailers. “Retailers [that] master logistics will command a market advantage through faster, more reliable customer delivery experiences. Measure the impact of reverse logistics using metrics for return rates, return dispositions, restocking costs, and liquidations,“ Forrester says.
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