IDC Makes Retail Predictions For 2016

The analyst firm IDC recently published a new research report titled “IDC FutureScape: Worldwide Retail 2016 Predictions.” In a recent webinar the author of the research, Leslie Hand, VP of Retail Insights at IDC, made these ten predictions for the global retail market in 2016:

1. By 2016, 75% of born-digital retailers do not even consider omnichannel commerce platforms that aren’t cloud-based and fundamentally mobile

2. By 2018, recommendation engines and forecasting will converge on personalisation and machine learning, creating a foundation for collaboration among merchandising and digital marketing

3. By 2017, 85% of customers expect one click-away commerce and fulfilment from all retailers — and those retailers will beat peer revenue growth by 200 base points

4. By 2017, 90% of the top 100 global retailers will have enabled multifactor payment authorisation in-store, with NFC finger prints and contactless payments playing a major role

5. By 2017, digitised “brick-and-mortar” stores will provide retailers with new sources of data to convert 50% of shoppers from casual to loyal purchases through digital experiences

6. By 2016, 40% of the top 100 global retailers will encrypt all customer data in flight and at rest, declaring "Trusted Data certification," with a 25% gain in competitive wallet share

7. By 2017, fully integrated omnicommerce platforms get selected two times more than platforms that require "custom" integration between store, online, and mobile commerce capabilities

8. By 2018, operationalising omnichannel will require omnichannel commerce, IoT and social convergence, and retail laggards will close ten times more stores than peers to stay in business

9. By 2017, the next wave of omnichannel retailers invest in fulfilment "your" way, driving dozens of retailers to make new supply chain analytics, planning and execution investments

10. In 2016, 10 large retailers will complete inside-out assortment planning with outside-in experts to exploit gaps in competitors' assortments and maximise price and profitability

At least half of these retail trends involve omnichannel. In particular, just think about the implications of some of these predications:

  • Retailers that were born online have a fundamentally different attitude to the way they plan and manage their business. They realise that new business ideas can be launched in the cloud or via the app store
  • Within the next year, all retailers need to make significant improvements to their supply chain
  • Laggards who drop behind on omnichannel strategy will be closing stores at TEN TIMES the speed of those who meet customer demand

Each of these ten IDC predictions should be a wake-up call for modern retailers. The customer relationship is more engaging today and requires far more planning than when there was simply a need to offer a post-purchase customer service channel.

Business as usual Is not possible In a world of Customer Experience change

A recent Deloitte study of 1,200 Chief Information Officers (CIOs) found that there are really just three different types of information leader within organisations today:

  • The trusted operator, who focuses on supplying cost-effective reliable infrastructure
  • The change instigator, who takes the lead on new business transformation and change initiatives
  • The business co-creators, who spend their time driving business strategy and using technology to dramatically change and lead the business

I think this is fascinating and I’m sure you can think of technology and information leaders who fall into all three of these groups, however it was interesting to see that Deloitte advises all CIOs that they should flow between the three areas during their career. You can’t be a success just by sticking to what you know for an entire career.

I think that if we focused our attention solely on the kind of technologies that are supporting the customer experience then only the second two could survive right now. Providing the experience that customers expect has changed faster than possibly any other area of business in the past 6 or 7 years – there really is no idea of business as usual because each New Year brings new trends and technologies that need to be adopted.

Omnichannel has been one of the key technologies at the forefront of change, firstly because customers demanded that they could communicate across multiple channels. So multichannel support was offered and then by knitting together the way these channels function an omnichannel was created.

But now there is a situation where designing your customer interface to be consistent across online, in-store, and on any channel can create greater revenues. The improved customer experience does not just keep customers happy, it creates more cash for your business.

In 2016 I believe areas like Robotic Process Outsourcing will be extremely important, meaning that the leader responsible for the customer experience does need to be fully conversant with emerging technologies. At the recent Engage Customer conference in London the first keynote speaker appeared on stage with a robot – not just any robot, but one that could have a normal conversation and with the ability to read your facial expressions. The robot knows if you are happy or sad!

Businesses are being transformed by technology. Where they are refocusing around the customer experience it is going to require the change experts and co-creators – there is no business as usual in 2016.


The Customer Experience in 2016

Customer Think magazine recently published a useful list of their top 5 predictions for the customer experience in 2016. Summarised, their list includes:

1.     The customer strategy is the business strategy; customer experience is now at the heart of business planning

2.     Effort and responsiveness emerge as key metrics; Customer Effort Score (CES) will become the key metric measuring the customer experience

3.     Shift to proactive and pre-emptive engagement; especially for chat, where agents can jump in and help

4.     Contact centre is the customer retention centre; loyalty being driven by great service

5.     Virtual and augmented reality coming of age; tech tools that have looked like gaming technologies are becoming a key part of the customer experience

This is not a bad list; it captures several key points that I strongly agree with. In particular I believe that the customer experience becoming a key part of business strategy will change how many decisions are made.

 

However, there are some critical trends that I believe will be shaping the customer experience in 2016 that are not even mentioned here. Let me add a few to the list and perhaps Customer Think can respond with their own thoughts:

 

Companies changing shape; the need to integrate the customer experience so deeply into the way companies operate will mean they fundamentally need to change structure. At the most simple this means marketing and customer service need to work together in a coordinated way, most likely as a single customer management function. However it will be more complex as all customer-facing functions need to coordinate and work together.

 

WebRTC goes mainstream; you don’t need to know the technical detail, but this is a freely available open source API definition that allows one browser to create a voice, chat, or file sharing connection with another without the need to use external apps. Just think of when you have been using a phone app, or a website, and you need help, but the help system requires you to go to a new website or to jump between apps? With this API it’s going to be easy to push a button to call up a video agent any time you need help.

 

Getting omnichannel right; it wasn’t mentioned at all in the article yet the concept of a single consistent view on the brand regardless of communication channel is still extremely important. It requires data analysis, and it shows customers that you understand their needs.

 

I believe that these omissions are extremely important. There is no point talking about augmented reality reshaping the customer experience when I can’t even get video call support from a popular app, so let’s redefine what will REALLY be important in 2016.

 

 

What do you think should be added to the list? Get in touch with me on LinkedIn to discuss.


Previewing the NOA’s “Outsourcing in 2020” research findings

Early in 2016 the National Outsourcing Association will publish The Outsourcing Yearbook 2016, featuring a research survey on outsourcing trends for 2020 and beyond based on the views of their member companies. The survey incorporates feedback from 134 organisations split approximately across one-third outsourcing suppliers, one-third buyers, and one-third advisers and support organisations.

Webhelp UK participated in the NOA research and so we have had an early look at some of the results. As I mentioned, the complete research will be published in the NOA Yearbook so look out for that, but I found some of the headline results really interesting and worth commenting on now. These are some of the most important numbers from the research:

As a strategy, outsourcing is getting more important. 70% of the organisations polled said that they plan to increase their use of outsourcing in 2016, with 83% of those questioned expecting the wider industry supporting outsourcing to increase in 2016.

Cost remains the most common reason for companies to use outsourcing, with 35% citing it as the primary reason to outsource, but in second place now comes the customer experience. 23% of those questioned said that improving the customer experience is their primary reason to outsource – an extremely important observation.

Large numbers of respondents also see technology as an enabler for a different type of outsourcing in future. 83% believe that Robotic Process Automation (RPA) will become significant in the next decade and 80% believe the same for Artificial Intelligence (AI).

The entire contract process is changing too. Companies are moving away now from the old master- servant model into a world of partnership. Contracts are increasingly based on payment for outcomes, service providers are being contracted in a way that lets them share the risk and also benefit from the rewards of an improved service, and notice periods are getting shorter.

I can see a trend here. Not only are more companies saying that they need to use outsourcing as a critical part of their business strategy, but the customer experience is really being used as a driver of change too. Companies are also exploring new innovative technologies and ways of contracting with partners. None of this looks like the outsourcing we used to read about a decade ago.

Can you remember some of those articles on the client and supplier relationship? Outsourcing used to be an endless power struggle between all-important CIO and a powerless supplier. The situation is far more complex today because the suppliers have some much-needed expertise that the client companies are buying in and the buyer within the client has probably changed too. Power is no longer concentrated in the hands of the CIO, often the business line manager is purchasing what used to be seen as IT or technology solutions on their own budget because so many solutions are delivered via the cloud.

All these changes are positive and reflect the new reality in 21st century companies – you can no longer vertically integrate and have all expertise under one roof. Creating an association of partners with different expertise and the ability to work as a team is now critical for success.

Based on these research findings, here are some of my own thoughts on what will be really important for anyone involved in outsourcing – and particularly in Customer Experience outsourcing - in 2016:

•      The increase in outsourcing is to be expected. Thankfully many suppliers have moved on from the low-cost business model of the past and are now offering services and expertise that simply cannot be found in-house. This is particularly true in Customer Experience, where the market is moving so fast that companies cannot keep up with customer demands without calling upon those who specialise in this area. Partnership used to be a sales buzzword, but in the present-day business environment it is a reality and this can be seen quite literally by the way that contracts are now being written that explicitly ensure that both parties benefit when the project succeeds. Forget the hot air – if you are both going to earn from making the project work out then the partnership is real.

•      Customer Experience as the main reason to outsource is critically important – gone are the days when outsourcing was just a cost reduction strategy. A quarter of all companies are now saying that the only reason they outsource is to improve the customer experience – this underlines the previous point. If you want to offer a great customer experience then you need a world-class service team that is staying on top of what your customers want 24/7. That is very difficult to deliver in-house, so it’s no surprise that outsourcing is seen as a better way to improve the customer experience. You work with the experts and you get the benefit of their experience across the world.

•      New technologies are changing the marketplace. I entirely agree with the observations on new tech such as AI and RPA, except I would not say that this is going to be important in a decade, many contact centres are already using RPA today - it works, it is a proven technology. In a decade there will be RPA that can learn on the job and the empathy from a robot will be exactly the same as that from a human; robots and humans will be blended together to offer a great Customer Experience. 2016 will be a critical year for AI tools like Oculus Rift, which is owned by Facebook. It’s about to go mainstream, but it is not there yet, however whenever I am trying to think of the technology that will be important in ten years I try looking back ten years to see how state of the art looked back then. Then nobody was even talking of omnichannel, multichannel, or using any social networks, so guessing what will be important in a decade is tough, but I think that both RPA and AI will be a significant part of Customer Experience technology long before 2026.

•      Basing pricing and contracts on outcomes is really important. This works really well for both the supplier and the client, because if the outcomes from working together are well aligned and deliver results then the client will not mind paying more – it almost certainly means that they are making more anyway. Customer Experience contracts based on outcomes rather than purely the number of FTE is going to become more and more common in 2016. This has been a real issue for companies that have added social support to their existing contact centre because once your support is social – and transparent – that part of the team is really strongly concentrated on marketing the brand too. Are they getting rewarded for that marketing function or just as more headcount in the contact centre? Pricing and rewarding on outcomes is the best way I know to ensure that you detach the headcount required to deliver a service from the value of that service.

The NOA research really does identify some of the key trends I expect to see in outsourcing in 2016, but what do you think of the research?


5 Tips For Great Customer Engagement

Do you have an active engagement strategy that considers how talking to your customers might make them more loyal to your brand? Or is your team just reacting to whatever is thrown at them, hoping that by answering everything you can make it through the day and the customers will all be happy?

Whatever the maturity of your engagement strategy, this is an area that is constantly changing. The area of loyalty is becoming particularly important now, with many customers preferring engagement, and the structure of a relationship with a brand, to any kind of formal loyalty schemes.

I believe that there are five key lessons worth remembering about planning engagement strategies – and these come direct from my own experience of helping clients plan this:

  1. The customer chooses their channel; if the customer chooses a particular channel then that is where you need to answer them. Can you imagine receiving a phone call from a retailer where the agent says ‘we are calling about your tweet…’ that would feel very strange. Stick to the channel the customer has chosen.
  2. You don’t need to answer every comment; Triage customer comments on social network channels into three groups. First, those that need urgent attention. Second, those worth a reply, but are not urgent. Third, those that are not worth responding to as they are not about support anyway – and if abusive then possibly these comments are worth deleting.
  3. Customers often jump channels; a conversation started by email may progress to Twitter and back. The customer chooses their channel, but they also have the right to change channel. Sometimes it may be easier for the customer to use email during the day, but then they prefer social networks in the evening. Build enough flexibility into your systems to offer enough omnichannel intelligence to handle this.
  4. Don’t force a channel change; I have seen some organizations tweet an auto response to customers mentioning their brand on Twitter, giving an email address and saying this is how to reach us. This is wrong on several levels. Not only are you forcing the customer to change channel once they have already made the effort to get in touch, but you are dictating which channels can and cannot be used. Remember point one from above?
  5. Respect privacy; I just said that a channel change cannot be forced, but if personal information needs to be shared then you may be forced to suggest the customer uses an alternative – more private – channel. However, where a normally public network like Twitter has the option to switch a conversation into direct private messages this should be explored before just asking the customer to call.

Engagement is becoming a critical part of serving customers and building a relationship with them, but it is still clear that some companies are just building a multichannel customer service solution without really thinking about engagement and how strategic it is for their business.

What do you think about these five lessons from my experience? What would you add? Get in touch with me via LinkedIn to discuss further.


What Happens If You Don’t Deliver A Great Customer Experience?

We all know that the customer experience is important. Customers today have a higher expectation than ever and if they get a less than satisfactory service then not only are they likely to leave and buy from someone else, but they will ensure that the entire Internet knows why they are not buying from you.

But just how valuable is the customer experience and how many customers would really move on if they don’t receive a great service?

  • Peppers & Rogers Group say 70% will buy from another company if they receive a bad experience
  • American Express says that 78% of customers will end a business relationship if the experience is not good
  • Forbes magazine suggests 68% of customers will end the business relationship if they are not satisfied

There are studies all over the Internet with similar results. Of course the methods vary from highly controlled academic studies to the dubious telephone surveys where customers are asked what they ‘might’ do hypothetically, rather than how they have actually behaved. In addition, most of these studies summarise their results with a single figure, but it is likely to be different depending on the type of product or service being purchased and the type of company – retailers are different to banks and they both differ from a company offering IT support.

However, with all this in mind, every figure shows that an astonishing percentage of customers are no longer prepared to accept poor service. Around two thirds to three quarters of customers now believe it is their right to move on and buy somewhere else if they receive poor service.

This is an important change in mindset for the customers. They are not just focused on the product and price, but the quality of service too and many customers would rather pay a little more if the brand treats them better. Service has become integral to how a customer chooses where to spend their cash.

Likewise, executive strategy is reflecting the same change. Instead of just attempting to maximize profit and reduce costs, corporate leaders are now finding that improving the customer experience is at the top of their agenda. The reason why is clear:

Customers expect great service. Even if you sell great products, you still need to make the experience great. Most customers are prepared to shop elsewhere if you can’t achieve this.

Have you also thought about this alignment of customer requirements with boardroom strategy and what it means for your business?

Please leave a comment here or click on my LinkedIn profile to contact me directly.


Can You Afford to Ignore Social Media?

I recently saw a great blog by Danielle Geoffrey, a researcher at Forrester, focused on it no longer being socially acceptable for companies to ignore social media. Of course, everyone involved in customer service has heard similar arguments, but Danielle focused on some intelligent arguments, three of which I think are extremely important.

Do you really need to engage with everyone?

Ideally you need to create a triage system for incoming social messages so they can be sorted into prioritised groups for processing. A simple example might be for messages mentioning your brand on Twitter. The messages can initially be ranked as important and the customer is influential, important and needs a reply, not important but worth a reply, ignore, and delete/block.

In general you don’t ignore social messages, but creating this kind of distinction is important because if George Clooney is tweeting that his broadband is not working then you want a response to that to be prioritised. You can plan to reply to even the unimportant messages so a dialogue is continued with customers, only ignoring the comments where a conversation has clearly ended. Where comments are abusive – haters are out there – you can use whatever facilities are available to report or block the user.

How quickly should you engage?

This is really about managing expectations. Almost no customer expects a reply within seconds from Facebook or Twitter messages, however it is also unusual to wait a day. Many times a customer will use a social network rather than calling because they are happy to fire off their query and get a response later, rather than waiting on the phone.

But the important thing to be aware of is that if you are not providing a 24/7 answering service on social channels then just ensure the customers know this. Have a sign-off that is visible at the end of the day and give hours when the team is operational in your profile.

Do you take more care on social?

Support for customers is something of a paradox on social networks. Customers expect more, yet they also expect more flexibility from a social interaction than they would get on the phone. Of course everything is recorded so any mistake by the agent can be grabbed and distributed by the customer as an example of terrible service.

You can’t tell your agents to just not make mistakes. They need to be briefed on the scope they have and then empowered to just do whatever they can to fix customer issues. Giving your agents the power to occasionally go far beyond the call of duty is also a great way to get customers sharing good news stories about your service.

These are some great tips from Forrester. Nobody can afford to ignore social customer service today, but it’s a fact that adding new channels can be a challenge. Planning to handle even just these three issues already clears much of the uncertainty.


How would you define omni-channel?

Omnichannel is a term that is increasingly being used, especially when connected to retail, but how would you define it?

 

The term is often used interchangeably with multichannel, which is confusing, as I believe these terms are different.

 

In fact, I thought I would Google the definition and Wikipedia came high up on the list, but look at what they said:

“Multichannel retailing or Omnichannel retailing is the use of a variety of channels in a customer's shopping experience including research before a purchase.”

 

Of course, anyone can go in to Wikipedia to change an entry, which I might do later on, but first it is worth asking how others define omnichannel.

 

Multichannel can be simply defined by saying that this offers the customer many different ways to contact a brand. Multiple communication channels are supported, however to correctly define an omnichannel business I believe there are three critical areas that need to be understood.

 

1.How customers get in touch; as with multichannel, many channels are available, in fact, the real point here is that the channels the customer wants to use should be supported, not just a limited range of channels chosen by the brand.

 

2.Single view of the customer; information must be shared across channels. A customer tweeting questions who then calls for help should find that the agent knows about the Twitter activity. Information about the customer and their actions is available across all channels.

 

3.Supply chain changes; the way customers interact with your brand may also change and I would classify this as being an integral part of switching to be an omnichannel business. For example, the integration of in-store and online shopping that may include click-and-collect or in-store returns for items bought online. Creating a seamless interaction with the brand is about the overall experience, not just the communication channels.

 

Three bullet points is not very succinct, so if I was trying to summarise omnichannel in a sentence I would say something like:

 

“Companies supporting an omnichannel approach support many communication channels, which are interlinked to create a single view of the customer, in addition to creating a seamless flow between their digital business model and the traditional one – if this exists.”

 

It’s still a long sentence, but what do you think? How would you define omnichannel in a single sentence?

 

Why not send me a message via my LinkedIn profile

 

 


Webhelp UK Christmas card design competition winner

A pupil from St Bernadette’s primary school in Larbert has won a Christmas card design competition set by Webhelp UK.

Five-year-old Juliet Donaldson’s winning entry was picked by the judges for its creative flair and festive cheer. To reward the budding artist, Anton Manley, managing director of UK client operations at Webhelp UK visited St Bernadette’s, on Friday 11 December, to present Juliet with a £50 voucher and a further £500 donation for the school.

Webhelp UK teamed up with primary schools in the Larbert area in an effort to involve the local community in its Christmas plans. The business challenged pupils to submit a design for its official 2015 Christmas card.

Runner up entries came from Tom Green, a primary five pupil at St Bernadette’s and Zac Ross, a primary three pupil at Larbert Village primary school – both receiving a £20 prize.

After visiting the school Anton Manley, said: “We would like to thank the schools that took part for all the fantastic designs that were put forward.

“The competition was a great way for us to showcase the talent of our young people in the local community. The quality and detail of all of the entries was incredible, we appear to have some very talented artists in our midst.

“We’re now looking forward to distributing the cards which are guaranteed to raise smiles this Christmas.”

Marianne Savage, head teacher at St Bernadette’s primary school, said: “The children have really enjoyed taking part in this competition. It’s great for the school to be involved in community projects as it allows the children to build new experiences and be creative at the same time.

“Juliet and Tom are over the moon and all their classmates have been so supportive – cheering them on when their names were announced at our morning assembly.”

View all three finalists here


What did we learn from Black Friday 2015?

A couple of weeks on from Black Friday in the UK and what have we learned?

 

Well, as predicted in The Drum recently, the omnichannel experience is now more important than ever. Creating a seamless customer experience all year round is more important than discounts on a single day. However, Black Friday was still extremely popular so what happened this year?

 

First, it became clear that the online discounts are becoming more popular than those discounts available in-store. I was watching the TV news and thankfully didn't see the traditional scenes of people fighting over TV sets, which fits with retailers saying this year that the in-store rush has eased. Conversely online shopping was up 36% with £1.1bn spent by online bargain hunters.

 

Contrast this with the midnight store openings. At Boots on Oxford Street only journalists were present. Other stores opening early at five or six in the morning found very few customers prepared to brave the cold weather conditions. Analysts also indicated that the recent terror attacks in Paris could have affected the desire for shoppers to line up in the streets all night, but I think the real reason for this change is just that shoppers have moved online.

 

15 major retail websites crashed on Friday. Big names such as Argos, Tesco, and John Lewis all suffered website issues demonstrating that even with all the planning and expectation, the sheer amount of customers all trying to shop online at the same time on the same day can create a nightmare for the IT team managing these ecommerce platforms.

 

Retail analyst Richard Hyman has suggested that about a quarter of UK retailers ignored Black Friday altogether. He said that next year there may be an adjustment in how stores adjust their opening hours and staffing levels, based on the trend for more shoppers to just engage online.

 

The real question for many retailers will be whether Black Friday is worth the effort and discounting. Asda was
the most public refusal this year, although other major brands such as Next and Jigsaw also ignored it. These retailers have all suggested that they would prefer to spread discounts over the entire holiday shopping season rather than focusing on a single day

.

The jury is still out. Black Friday 2015 was an enormous success for online retailers this year, but the message is far more mixed from the High Street. I’m sure it will be taking place again in 2016, but it will be interesting to see how those retailers with both an in-store and online offer manage to promote the event.

 

See how 10 top UK retailers performed on Black Friday

 

 


Budding young artists help Webhelp say Merry Christmas!

With the festive season now fast approaching, we asked budding young artists from local primary schools near our UK Head office in Larbert to help us design our 2015 Christmas card.

Whilst the standard was exceptionally high, there could only be one winner unfortunately, which after careful consideration by our panel of judges was chosen as five year old Juliet Donaldson from St Bernadette’s primary, Larbert. Juliet won a prize of £50 worth of vouchers in recognition of all her hard work in designing the card, with Webhelp also making a £500 donation to Juliet's school.

With so many amazing up entries to choose from we also awarded two runner up prizes. These went to Tom Green, aged nine from St Bernadette’s and also Zac Ross, aged seven from Larbert Village primary school – both received a £20 voucher as a thank you for all there efforts.

You can view JulietÂ’s winning design below, along with both of our runners up.

 

     

Webhelp UK has also chosen to make a further donation of £1000 to one of its official charity partners, Strathcarron Hospice, in Falkirk to help with the continued provision of specialist care, comfort and support for those affected by terminal illness.