Customer experience is one of those magical phrases in e-commerce that has come to mean everything and nothing at the same time.
Pair it up with “frictionless,” “seamless,” “journey” or any of the other old standbys and you’ll simultaneously have heads nodding and eyes rolling. Why rolling eyes? Because too often the “customer experience” conversation is the one marketers and executives trot out when they don’t have anything concrete to say.
But I’m not here to bury the phrase “customer experience.” I’m here to honor it.
In the retail industry, the smartest of the smart are promoting a new way of looking at “customer experience,” a refreshed understanding that puts the phrase at the core of retail’s digital transformation. This new view is one reason that artificial intelligence and machine learning have risen to nearly sacred status among retailers fighting to hold their own in the era of data-glutted Amazon.
“It’s all about the customer,” you’ll hear retailers say on conference stages and analyst calls. But all about the customer how? Is it all about acquiring the customer and then bombarding them with emails and product assortments that the retailer wants to sell, but that the customer doesn’t necessarily want to buy? Or is it something more?
Yes. It’s something more.
Retailers that are thriving in the age of Amazon are looking at the role of customer experience at every step of the customer journey. And they’re not just looking at it, they are asking themselves a question: How can I deploy advanced technology to combat friction at every point in the pre-purchase, purchase and post-purchase process?
Eight key e-commerce tools
Something new is in the air, and it’s being recognized by the keenest observers of e-commerce and the digital economy. This year, Mary Meeker’s annual Internet Trends report, the revered roadmap of the digital future, was particularly e-commerce-obsessed.
In all, 50 of the 294 slides in her slide deck contained e-commerce observations. The heart of Meeker’s e-commerce section offered a playbook for building an e-commerce business and for providing the kind of start-to-finish customer experience to make it successful.
She broke the necessary elements into eight tools to handle:
- Payment (in-store)
- Online Store
- Online Payment
- Fraud Prevention
- Purchase Financing
- Customer Support
- Finding Customers
- Delivering Product
Meeker’s educated summary was a validation that the need to deliver a flawless customer experience runs through a customer’s purchasing process from the time they discover an online merchant until the time well after they have their new product at home.
Speaking at Shop.org late last year, Dave Barrowman of Skava, said that AI and machine learning were moving quickly beyond doing the work of attracting customers and showing them things they’re likely to buy.
“I think one of the themes of this is going to be so much more than product recommendations and search optimization,” he said. “We’re going to see machine learning impact retail from end-to-end and across channels.”
Meeker’s inclusion of fraud protection as an area of e-commerce that is part of customer experience also was interesting. To Meeker’s larger point, customer experience can’t be only about discovering products and purchasing them. Top-performing retailers today know that consumers need to be able to buy when they want and where they want. Consumers shop in stores and online, just as they buy through both channels, depending on what’s convenient, expedient or economical. So, of course, finding what they want online must be a breeze.
The role of AI
But there is so much more to customer experience—and to striking a balance between what the customer needs to be delighted and what the retailer needs to be profitable.
Sure retailers need to protect themselves from sophisticated fraud rings, but not just to protect their losses. They must protect themselves for the purpose of maintaining a superior customer experience, because they don’t really have customers to spare. How can most compete with next-day delivery? If shoppers’ orders aren’t reviewed instantly and legitimate orders are incorrectly declined for fear of fraud, you’re only hemorrhaging more consumers to Amazon.
Beyond that, consumers also should be able to instantly arrange financing online without having to fill out pages of online forms. In order to provide that experience, retailers are looking to AI to vet the credit worthiness of their customers in real time.
And, of course, customers must receive their orders when they were promised as advertised—or the retailer should be prepared to offer an easy return process that still protects the retailer from return abuse.
How does all this play out in the real world? Think of Starbucks and its mastery of acquiring digital customers—and their data—through its mobile app. eMarketer reports that 23.4 million consumers will order through the AI-enabled app this year. Even as early as 2016, nearly a quarter of the company’s transactions were made on the mobile app.
Amazon, naturally, has become a logistics leader by deploying AI in its fulfillment centers. Now the Seattle behemoth is turning AI loose on running its business, deciding how much of what to buy and negotiating pricing with suppliers.
Tumi, the luxury luggage seller, has turned to AI-driven personalization not just to sell more, but to provide a better post-sale customer experience. For instance, the company instituted an automated feature that lets customers choose how to receive notifications about orders they had placed but not yet received. The change made for happy customers and it reduced calls to Tumi’s call center by 30 percent.
For its part, the Jet.com division of Walmart says it has revolutionized the way it manages fraud by turning to AI to dramatically speed up its order review process so as not to keep customers waiting.
Retails’ digital transformation is likely only getting started—prompted by consumer expectations and competitive pressure, largely driven by Amazon. Another of Mary Meeker’s e-commerce slides pointed out that Amazon’s portion of e-commerce sales has increased to 28 percent today from 20 percent in 2013.
Retailers who try to compete with Amazon on price, selection and logistics are embracing a losing strategy. For most retailers not named Amazon, the opportunity to differentiate themselves comes down to customer experience.
In fact, in the age of Amazon and direct-to-consumer sales, retailers’ sole reason for existing is to provide an exceptional customer experience. And it is clearer today than it has ever been that that exceptional experience must begin at the moment a consumer discovers you as a retailer.
And then, it must last a lifetime.
Signifyd provides fraud-prevention services to online retailers.