Beyond transactions building a compelling retail experience

Trang 1

Beyond transactions

Building a compelling retail experience

An Economist Intelligence Unit white paper

Sponsored by SAP

Trang 2

Preface

Beyond transactions: Building a compelling retail experience is an Economist Intelligence Unit report

sponsored by SAP The Economist Intelligence Unit bears sole responsibility for this report The Economist Intelligence Unit’s editorial team conducted the interviews and wrote the report The ﬁ ndings and views expressed in this report do not necessarily reﬂ ect the views of the sponsor Dan Armstrong was the editor of the report and Sylvia Helm as the author Mike Kenny was responsible for layout and design Our thanks are due to all of the executives who responded to the survey.

October 2009

Trang 3

Trang 4

Introduction

Global recession, the accompanying fall in demand and the proliferation of shopping choices have combined in the last year to make retailing a tough business in which to succeed Shoppers can buy the same goods from any number of interchangeable sources, including competing chains and multiple web commerce sites They can use their mobile phones to scan bar codes and instantly obtain a list of stores and website where the product is available and how much it costs at each They can reject a retailer for any number of reasons: a price that may be only pennies higher than competitors, the level of convenience, the friendliness of the sales staff, even the store’s décor When products are delivered to the door at a low price with a click of the mouse, there is no reason to even leave the house

To differentiate in this environment, retailers need to provide something special—something informed

by the qualities that the customer values If it is not price, the key is customer experience Regardless

of channel, the retailer needs to provide a consistently enjoyable and convenient shopping experience, ensuring that everything—from the feel of the store or website to the return and exchange policy and the promotions extended to the customer—is carefully matched with the traits that the customer values.

In this difﬁ cult economy, retailers would be well-advised to focus on the elements within their control, especially building customer loyalty among the most valuable customers who account for the bulk of the revenues and proﬁ ts Getting these customers to keep coming back requires gathering information from customer transactions, sharing that information across customer-facing units, and ultimately measuring and taking actions based on the value of each customer.

About the survey

In September 2009, the Economist Intelligence Unit surveyed 89 executives of retail organisations on the challenges of getting customer-facing departments

to work together more consistently and effectively

Survey respondents spanned the globe, with 34% from the Asia-Paciﬁ c region, 32% from the Americas and 34% from EMEA Respondents’ annual revenue ranged from less than US$500m to more than US$10bn The level of seniority of respondents was high: 31% were C-level or board members and another 17% were VPs or heads of business units

Trang 5

4

Estimating customer lifetime value

Most retail organisations in the survey consider customer loyalty their strong suit Despite the recession, 65% say they have greatly strengthened customer relationships over the past 12 months What they have not done is ﬁ gure out a way to measure the lifetime value of their customers and use that information

to prioritise their sales and marketing efforts Regardless of industry or region, very few executives can honestly say that their companies can quantify the value of their best customers—or any customers, for that matter

Targeting the customers

As to which customer-related areas need to be improved the most, the number-one response is targeting the right customer to meet sales goals Retailers point to segmenting and proﬁ ling shoppers, reducing the cost of sales and cross-selling or upselling shoppers as areas in need of improvement They also mention enhancing their ability to drill down to the individual sales level to understand what each customer

is likely to buy, estimate how much revenue will be produced, and what to promote or cross sell each

Key ﬁ ndings

Measuring the value of customers

(% of respondents who agree minus % who disagree)

Source: Economist Intelligence Unit survey, September 2009

Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months

My organisation has an accurate way to estimate the lifetime value of customers

Disagree Agree

Trang 6

customer To do this, retailers have moved beyond traditional demographic criteria to frequency and size

of purchases, lifestyle information and the last product bought

For instance, the US women’s clothing retailer Coldwater Creek—which sells through retail stores, a web site and direct-mail catalogs—recently announced the launch of the “Onecreek” loyalty program aimed at the top 5% of the company’s active customers It offers early peeks at new merchandise, a personal shopper, free shipping on returns and a gift on the customer’s birthday Eligible customers are those who purchase three times as frequently and spend four times as much as an average customer “The program is designed to improve retention and overall spend within this very important and proﬁ table segment of our customer base,” said Dennis Pence, the company’s CEO, in a press release

Targeting resources

Survey respondents say big beneﬁ ts can be gained from integrating marketing, sales and service activities If all customer-facing service units share the results of every customer interaction, they should receive a detailed picture of shopper behavior from all angles Then resources could be prioritised based on total value of each customer over the life of the relationship Many companies, including Sony Ericsson, Bell Canada, Samsung, Apple and Amazon have distinct customer service numbers for so-called

“executive” customers—those whose spending surpasses a certain level, whether for their companies

or on their own behalf These customer service agents have information on each customer at the touch

of a button, and are empowered to offer discounts and provide extras on depending on the value of the relationship.

Source: Economist Intelligence Unit survey, September 2009

Developing and sharing a detailed picture of shopper behavior and preferences

Making each unit aware of how the others have interacted with a given shopper

Prioritising resources directed towards shoppers by total value over the life of the relationship

Top three benefits from integrating marketing, sales and service activities?

(% respondents)

Trang 7

6

How the three regions differ

The three regions surveyed—the Americas, Asia-Paciﬁ c and EMEA –all give themselves top marks for excellent customer service All pride themselves on the loyalty of their customers And all admit that their organisations cannot accurately measure the value of—or even identify, in many cases—their most proﬁ table customers The challenges faced in each region include the following.

Americas Reducing the cost of sales—necessary to keep margins low and prices competitive—is a top

priority for Americas retail organisations In the Americas, customer feedback tends to be ﬁ ltered through the less expensive e-commerce channels, rather than from direct response feedback (as is the case in the two other regions).

Asia-Paciﬁ c Asia-Paciﬁ c retail organisations get most of their customer feedback in stores, through retail

sales staff, and at the point of sale They are the lowest users of e-commerce, and call centers are used by only 17% of respondents.

EMEA Of all regions surveyed, EMEA retail organisations are the least able to gauge the lifetime value

of customers Most in need of improvement: proﬁ ling, targeting, and cross selling or up selling existing customers EMEA retailers use call centers the least and direct response (direct mail, e-mail) the most.

Trang 8

Few survey respondents say they can accurately measure the value of customers Faced with challenges they cannot control—global economic trends, rapid shifts in product demand, commoditization of the retail channel—they have to focus on what they can control, working to understand the customer and provide a pleasant and convenient retail experience Retailer organisations should consider how to:

l Do a better job of analysing the customer base and measuring the value of individual customers

l Share and act on customer information in all customer-facing units, making sure to improve the weak links.

l Differentiate customers by products purchased, services used and revenues generated

l Provide distinct service to high-value customers, building their trust, increasing their loyalty, and generating more revenues

Conclusion

Trang 9

8 Economist Intelligence Unit 2009

Appendix 1

Overall survey results

Appendix: Overall survey results

65 15 12 8

Customer service: Providing superior service to customersOperational excellence: Creating highly efficient processesProduct innovation: First to market with groundbreaking new products or services Other

In your view, which of the following best represents the core strength of your overall business? Select only one.

Each of the organisation’s customer-facing departments influences the shopper via different channels For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to 5.

Trang 10

Appendix 1

Targeting the right shoppers to achieve sales volume and revenue objectivesSegmenting and profiling shoppers

Reducing the cost of salesCross-selling or upselling shoppersMeasuring/optimising effectiveness of marketing and promotional campaignsMaximising repeat purchases and building loyalty among shoppersGathering shopper intelligence in the course of providing serviceMeasuring the satisfaction of shoppers

Generating promotions/campaignsInvolving shoppers in product/service development (eg, co-creation)Building long-term relationships with store managementEnsuring that shopper complaints are resolved quicklyCreating effective collateral

OtherDon’t know

In your view, which of your organisation’s activities are most

in need of improvement? Select up to four

(% respondents)

43 34

34 33 28 28 27 26 18

18 13 10 8

0 0

Prioritising resources directed towards shoppers by total value over the life of the relationship

Measuring the probability that shoppers will turn into buyers, and using these scores to guide sales

Establishing common definitions, assumptions and dataHelping each function find and act on ways to support the othersIntegrating tracking of shoppers from initial contact through to post-sales service

Presenting shoppers with a consistent picture of the organisationOur company sees no need to integrate our marketing, sales and service activities

OtherDon’t know/Not applicable

Which of the following would provide the biggest benefits in integrating your organisation’s marketing, sales and service activities? Select up to three

22 20

My organisation prioritises sales and marketing resources based on each customer’s lifetime value

We are currently developing a social media strategy

My organisation has more flexibility than its competitors in pricing its productsDespite the recession, my organisation has greatly strengthened customer relationships over the past 12 months

We are more engaged in developing products or services collaboratively with customers than we were 12 months agoShoppers view my organisation’s products and services more as commodities now than five years ago

Our margins are higher than the margins of most of our competitors

If there is no difference in price, my organisation can win the sale based on service, convenience, brand reputation or other intangibles

Agree Disagree Don’t know

Trang 11

Appendix 1

Global economic downturnChanging needs of shoppersSignificant demand shifts for our products/servicesEmergence of new competitors

Finding access to credit/capitalEmergence of new markets for our products and servicesFocusing on sustainability efforts

Disruptive technology developmentsAccessing key components or resources through our supply chainChanging needs of store management

OtherDon’t know

Which of the following trends have had the greatest impact on your business over the past 12 months? Select up to three.

(% respondents)

71 40

28 27 17 15 13 10 9 9

0 0

Improving online or self-service support tools for store managersMaking prices and sales terms more transparent for easy comparability by store management

Improving usability, search and navigation of store-facing websitesInvesting in self-service tools for store employees across multiple channels (web, mobile devices, e-mail)Building or supporting online communitiesOther

Don’t know/Not applicable

In which of the following ways does your organisation empower store management? Select all that apply.

(% respondents)

31

28 27

27 20

3 26

Offering additional value along with products (eg, in-store service, merchandising improvements, sustainable packaging)

Improving usability, search and navigation of shopper-facing websitesCreating educational forums for shoppers (eg, online content, in-store content, communities of interest, direct-to-consumer outreach)Building or supporting online communities of shoppers

OtherDon't know

In which of the following ways does your organisation empower shoppers? Select all that apply

(% respondents)

52 44

38 27

2 9

Point of sale feedbackIn-store sales staffOur own e-commerce site(s)Third-party e-commerce sitesPhone order interactionDirect response feedbackCall center customer service interactionsTargeted focus groups

Online social media effortsOther

Don’t know

What avenues of customer feedback is your organisation best and worst at collecting and using to improve the experience of shoppers?

Select up to three from each column.

(% respondents)

We are best at collecting and using

We are worst at collecting and using

49 20

47 17

27 29 10

30 24 15

34 4

21 19 22 21 2

35 1

1 6 11

Trang 12

Appendix 1

Putting recommendations into actionPersuading shoppers to share experiences, both positive and negativePersuading store employees to share feedback from shoppers, both positive and negative

Synthesising information from retail outlets into coherent recommendationsDistinguishing relevant from irrelevant shopper information

Monitoring the results of actions in terms of shopper behaviour and marketing metrics

Synthesising information from customer service into coherent recommendations

Dealing systematically with extremely high volumes of information from storesDemonstrating to shoppers that their comments are being addressedSynthesising information from online channels

into coherent recommendationsOther

Don’t know

My organisation’s greatest challenges in using information from store management employees and shoppers to improve the customer experience are:

Select up to three

(% respondents)

45 33

27 26 25

25

22 18 17

3

0

6

Asia-PacificWestern EuropeNorth AmericaLatin AmericaMiddle East and AfricaEastern Europe

In which region are you personally based?

(% respondents)

34 27

26 6

4 3

64

15 21

Individuals (eg, retail)Businesses or other organisations (eg, business-to-business)

An equal mix of both

Who are your organisation’s primary customers?

(% respondents)

1 Consistently and systematically 2 3 4 5 Not at all Don’t know

Empower salespeopleEmpower customer serviceCreate effective marketing campaignsRefine product development processForecast demand

Improve service to shoppersImprove retail offerings and selectionsAdjust pricing

How well is information from all sources used to accomplish the following goals?

Trang 13

Customer serviceFinanceMarketingITOperations and productionInformation and researchHuman resourcesSupply-chain managementProcurement

RiskR&DLegalOther

What are your main functional roles?

Please choose no more than three functions.

(% respondents)

50 22

22 20 18 17 13 10 9 9 7 5 2 2

0

1

Board memberCEO/President/Managing directorCFO/Treasurer/ComptrollerCIO/Technology directorOther C-level executiveSVP/VP/DirectorHead of Business UnitHead of DepartmentManagerOther

Which of the following best describes your title?

(% respondents)

2 15 5

5 5 9 8 16

31 6

Trang 14

Appendix 2

Americas survey results

Appendix: Americas survey results

64 18 11 7

Customer service: Providing superior service to customersOperational excellence: Creating highly efficient processesProduct innovation: First to market with groundbreaking new products or services Other

In your view, which of the following best represents the core strength of your overall business? Select only one.

Each of the organisation’s customer-facing departments influences the shopper via different channels For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to 5.

Trang 15

Appendix 2

Americas survey results

Targeting the right shoppers to achieve sales volume and revenue objectivesReducing the cost of sales

Measuring/optimising effectiveness of marketing and promotional campaignsGathering shopper intelligence in the course of providing service

Segmenting and profiling shoppersMaximising repeat purchases and building loyalty among shoppersCross-selling or upselling shoppers

Measuring the satisfaction of shoppersInvolving shoppers in product/service development (eg, co-creation)Generating promotions/campaigns

Creating effective collateralEnsuring that shopper complaints are resolved quicklyBuilding long-term relationships with store managementOther

Don’t know

In your view, which of your organisation’s activities are most

in need of improvement? Select up to four

(% respondents)

46 43 39 29

25 25 18 18 14 11 11 11 7

0 0

Helping each function find and act on ways to support the othersPrioritising resources directed towards shoppers by total value over the life of the relationship

Establishing common definitions, assumptions and dataIntegrating tracking of shoppers from initial contact through to post-sales service

Measuring the probability that shoppers will turn into buyers, and using these scores to guide sales

Presenting shoppers with a consistent picture of the organisationOur company sees no need to integrate our marketing, sales and service activities

OtherDon’t know/Not applicable

Which of the following would provide the biggest benefits in integrating your organisation’s marketing, sales and service activities? Select up to three

(% respondents)

39 32

32

29 25

25

25 21

My organisation prioritises sales and marketing resources based on each customer’s lifetime value

We are currently developing a social media strategy

My organisation has more flexibility than its competitors in pricing its productsDespite the recession, my organisation has greatly strengthened customer relationships over the past 12 months

We are more engaged in developing products or services collaboratively with customers than we were 12 months agoShoppers view my organisation’s products and services more as commodities now than five years ago

Our margins are higher than the margins of most of our competitors

If there is no difference in price, my organisation can win the sale based on service, convenience, brand reputation or other intangibles

Agree Disagree Don’t know

Định dạng
Số trang	30
Dung lượng	1,74 MB