Everything you know about customer experience has changed

Like everything else in 2020, the world of retail has been turned on its head. In the months after the pandemic began, e-commerce sales in Canada doubled, toilet paper sold out and everyone stopped caring about fashion.

Philippe Darvasi
National Lead, Customer Intelligence

It’s expected that the relationship with the consumer will be altered forever. The disruption has created a marketplace where most interactions between a brand and its customers are online, said Philippe Darvasi, Customer Intelligence Solutions Architect at SAS Canada.

“Customer experience is the strongest differentiator for companies,” he said. “But the website is a more commoditized environment, making it harder for them to stand out.”

The solution can be found in data analytics, said Darvasi. Successful companies will be those who learn more about their customers and use those insights to provide a better experience. “Analytics is a powerful flashlight that can help you find your way when everything is shifting so quickly,” he said.

Why real-time analytics is crucial now

A recent global McKinsey survey shows that more than 60 per cent of consumers have changed their shopping habits. Changes in consumer expectations were already underway, but the survey notes that COVID-19 accelerated these changes, leaving retailers unprepared to respond.

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Jennifer Maks, ALDO Group

“Old data has become stale,” said Darvasi. “If you’re analyzing the data now, you can pick up the patterns that show which way people’s concerns are heading,” he said. Jennifer Maks, Senior Vice President – Omnichannel for the ALDO brand agrees. “The use of real-time analytics has been more important than ever as we go through this year,” she said. “Things are changing so quickly, from one day to the next, and with this uncertainty, it’s a risk to rely solely on experience and historical data to inform future actions.”

At ALDO, the team has been deep diving on the data more frequently, even on a weekly basis as compared to monthly reviews in the past, said Maks. “This helps us to better understand the situation facing our customers and to adjust accordingly,” she said.

Would analytics have helped to resolve the toilet paper shortages? “Everyone was caught off-guard working on old data and assumptions,” said Darvasi. “It’s like the frog in boiling water. We don’t notice a shift of a few degrees in the water temperature, but analytics will. In these turbulent times, the drift can happen very quickly and in an exponential form and the sooner you can get ahead of that curve, the better chance you have to come out it in good shape.”

How can it actually improve the customer’s experience?

When they start using analytics, most companies look for insights on how to smooth out operational processes, said Darvasi. This pays off by improving efficiency but also reduces friction in the customer experience. A first step is to use analytics to match inventory to demand, whether online or in-store.  “At the ALDO Group, we actively use demand data generated from our in-store digital devices which scan products that customers ask to try-on,” said Maks. “This informs allocations for stores and eCommerce. We know how many times a certain style was requested in a certain store, how often it was in-stock, how often it was tried on, and then subsequently how often it was purchased.”

Similarly, the detail can reveal ways to make your website more customer-friendly. Darvasi described one retailer that “mapped the checkout process” to find out where and why customers abandon their carts before purchasing. Retailers are also relying on data to help fix recent delivery issues by offering options like in-store pick-up.

Companies can gain more value when they use analytics to personalize the customer’s experience. The tools can be used to segment customers in any number of ways, such as by demographics, lifestyle and whether they are repeat or new customers. This provides insights on the marketing strategy for each segmented group. For example, Darvasi said it can indicate how certain customers will respond to discount offers at various levels or suggestions for an accessory to match their purchase. This can all be automated to offer the right incentive at the right time for each customer

As an example, ALDO uses analytics and testing to further tailor its emails to customers. The company tests two versions of its communications to segments of its list before deciding which one to send. “Our goal is to provide our consumers with the best experience for them with the right messaging based on their interests,” said Maks.

With advanced analytics, organizations can identify and target marketing efforts to new segments based on common behaviour. “In my experience, it’s not always a simple demographic, but can be tied to behavioural traits that often tell a deeper story,” said Darvasi. In this way, marketers can spot very specific segments such as bargain hunters who wait for particular deals.

A solid return for retailers

Customer experience leaders see three times higher performance than laggards, according to a McKinsey study. They are more “resilient during recessionary periods, experiencing shallower troughs and quicker recovery.”

“The trick is to balance the customer experience with the organization’s priorities,” said Darvasi. “When you do that, you get results from a customer that starts listening to you because you’re more relevant, and you do it with less resources.” By building customer loyalty in this way, McKinsey says that customer experience leaders achieve revenue gains of five to ten per cent and reduce costs by 15 to 25 per cent within two to three years.

How to get started and get quick wins

“A lot of companies will say they’re not ready for analytics yet,” said Darvasi. “That’s a trap of sorts, I believe.” Organizations can start small with a simple view of the customer journey to find the friction points. To avoid getting lost in the data, Darvasi advises organizations to develop clear goals and questions that are easy to measure. For example, it’s hard to measure whether customers are happy, but easy to see whether they are repeat customers, he said. Actionable data will surface within a few weeks of starting the project.

“Set up an agile team that can review the data and has the authority to make changes.  Analytics is great as long as you can do something about it.” It also helps to have executive buy-in on the plan, he added.

It will take a certain amount of maturity to differentiate your company on customer experience, said Darvasi. “But it is the end goal and you can turn this crisis into a whole new chapter in building out a full 360-degree view to personalize service.”

To understand customer experience now and into the future read this ebook based on research by Futurum Research who surveyed more than 4,000 consumers, executives, marketers and technology professionals to understand what defines customer experience today and how it’s evolving through the year 2030.


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Cindy Baker
Cindy Baker
Cindy Baker has over 20 years of experience in IT-related fields in the public and private sectors, as a lawyer and strategic advisor. She is a former broadcast journalist, currently working as a consultant, freelance writer and editor.

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