Today’s retailers continue to lose ground to other types of expenditures besides shopping as consumers turn to experiences over things. In response, stores are rolling out new bells and whistles in the form of tech-based tools, hoping to compete.
Unfortunately, too often their efforts are misplaced.
A new study by IBM called “The Experience Revolution: Digital Disappointment – Why Some Consumers Aren’t Fans” polled 600 executives and 6,000 consumers to learn about the variety of digital offerings out there and the types of tech consumers really want. Then, the company cross referenced the two, and the exercise illustrated a huge disconnect.
For instance, consumers indicated the single factor that would encourage them to adopt a stores’ digital tool is if it saved them time. Conversely, retailers listed time saving as the fifth most pressing consumer desire out of nine attributes. Improved sense of control topped the retailers’ list, while it hovered near the bottom of the consumer list at No. 7.
“Despite the common refrain that companies need to be customer centric, they are still struggling to put this approach into practice,” the report noted. “To win with digital CX [consumer experience], we believe companies must think big to create experiences that solve fundamental customer problems.”
And IBM revealed what happens when companies provide things that aren’t relevant: satisfaction rates are low. Seventy percent of respondents who have encountered a digital tool or display expressed disappointment and an unwillingness to adopt it long-term. Interactive displays, voice controlled robots or computers and virtual reality were among the most disappointing experiences according to roughly 70 percent of consumers polled. Pickup of online orders resulted in the highest level of satisfaction at 32 percent, followed by mobile pay at 29 percent.
Part of this problem is that even when the digital tools solve an issue, companies need to do a better job of promoting the benefits. And the findings seem to bear that out. The top reason why respondents said they were disappointed in their experiences is that the tools didn’t work as expected.
Further, age is a much bigger factor in consumers’ feelings about their digital experiences than retailers realize. While only 38 percent of executives think age factors into how their tech tools are received, the survey shows marked differences in Millennials, Gen X and Baby Boomers. For instance, while 24 percent of Millennials use stores’ apps to locate items, only 8 percent of Boomers report doing so.
This shouldn’t come as a surprise given that the younger generation has been dubbed digital natives. In fact, for every type of service the survey queried for—including buy online, pickup in store, price comparisons and sale alerts—Millennials outpaced the other generations in terms of their awareness of and regular use of the digital experience.
Indifference was a big reason why Boomers don’t use these services—reaching 70 to 80 percent in some cases. “Despite the fact that 39 percent said they were eager to see what companies do with digital CX, they, themselves, were not inclined to experiment with new ways to gather information, ask for assistance, place an order or make a purchase,” IBM said.
Dodging digital disappointment
With this data in mind, IBM outlines four ways in which retailers can focus on developing digital experiences that resonate with consumers.
1. Rather than designing what you would like, learn your consumers’ pain points and solve for them.
If you don’t, shoppers will never use it “if they don’t perceive it to be faster, easier or more convenient than traditional channels,” the report said.
2. Find out what will really motivate your consumers to change their behaviors.
The answer here is data analysis. By example, the report recounts how a telecommunications company determined what percentage of its users would need an incentive to use its new online customer service tools. It did so by analyzing recorded calls (unstructured data) as well as billing information (structured data). Similarly, for retailers, taking a look at structured and unstructured data could inform them of which consumers are likely to adopt each tool.
3. Focus on utility and simplicity.
Think about the ease of using the Uber app, which solves a problem and clearly shows users where their cars are en route to their location. That type of simple interface could help retailers too, but they also need to test their tools constantly to make sure they’re meeting expectations.
4. Promote the tools’ benefits.
Stores can’t simply wait for consumers to flock to their new digital experience. They’ll need to lure them in with promises of time savings, discounts or other perks. Retailers will also need to keep their different market segments in mind since it may take a different marketing angle for GenXers versus Boomers.
“The lesson here is that even though we are well into the digital age, and the pace of change is accelerating, eager adoption of digital CX by all should not be assumed,” the report said. “Companies that simply launch new digital points of engagement and expect customers to flock to them are putting their investment at risk, especially if there are significant numbers of customers who aren’t inclined to shift to digital on their own.”