How to Adapt to Changing Customer Behaviours

White Paper

Customers have more choices today than ever before. More information, more touch points, and more options are changing the way they purchase. This puts the customer firmly in the driver’s seat throughout the shopping process. To remain competitive in today’s business world, organisations must adapt to these changing customer behaviours, and deliver an agile, personalised experience across all channels or touch points. Download this whitepaper to learn how to adapt to changing customer behaviour.

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What Agile Commerce is All About

Agile Commerce is all about engaging with your customers in a consistent and relevant way, over whatever device or touch point your customer wants to engage with you.

And where it used to be ‘respectable’ to be available in many touch points (have an app, be on Facebook), or to even have linked some of them, for example by offering ‘reserve online, pick up in store' type services, these days the winners will be the ones who provide a coherent and relevant story across all touch points. Converting a consumer from a browser to a buyer no longer happens on a single channel, it happens across a multi-channel journey. And at each step of the way during this multi-channel journey organizations will have to make sure that:

  • They deliver what their customer is after at that stage of their user journey, whether this is information or transactional capability.
  • The touch point is easy to access and easy to use.
  • The information they provide is accurate, consistent and relevant.
  • They provide enough arguments that will make the consumer want to use their touch point next in their multichannel journey.

In the near future, our whole environment and every electronic device around us will be connected through the Internet, with the Internet becoming a regular omnipresent commodity just like electricity is today.

Also, the Internet led to an explosion of customer touch points. No other channel has created so many different touch points in such a short time including:

  • Email
  • Websites
  • Mobile apps and mobile web
  • Call centers
  • Kiosks
  • Search engines like Google, Bing or Yahoo
  • Social networks like Facebook, Twitter or Google+
  • Game Consoles
  • Electronic shelf labels

With the Internet expanding into cars, kitchen appliances, TV sets and other access points, this number will grow rather than shrink in the coming years. Yet, none of these new touch points are a new channel. They are all riding on the back of the existing Internet channel.

In fact, it would be a fatal mistake for any company to treat them as new channels or silos. With hind-sight introducing ecommerce as a new channel or new business unit only caused the problems many organizations are facing today. These touch points add a different kind of representation of the very same data that the website already presents but they don’t add any new business processes. In fact they are most effective when they are re-using what the web has already established.

Agile commerce also postulates that companies must tear down the walls they have built between their channels over years. Conversion is not a single channel concept anymore and neither are customer acquisition, retention or satisfaction.

Information and data must flow freely between channels and business units. Customers don’t care if a product can’t be ordered in one channel from another channel, just because organization dictates it belongs to another channel and therefore to another business unit. Customers shop with your brand, not with your channels.

Each touch point can fulfill certain customer needs as part of a multi-channel customer journey and as organizations roll out these touch points they need to be clear about what these roles are. Channel presence on its own is no longer that relevant, it is what organizations provide at these touch points that matters.

The Internet enablement of life is a fact and it is not until this realization has really sunk into an organization that it can be truly effective with an agile commerce strategy

A growing need to enable, support and manage this new agile commerce experience however will drive a significant change in the IT landscape of retailers, brands as well as manufacturers, especially where it concerns the customer interaction elements – the touch points. Consistent delivery of content gathered from across multiple channels and re-distributed across others and centrally orchestrated and personalized user experiences, again driven by data gathered from all channels, are the new standards of the very near future.

How Consumer Behaviors Have Changed

It used to be that the majority of consumers shopped and purchased products not using more than two or three channels. That behavior has changed.

Individuals increasingly use the Internet – both on their PCs and mobile devices – to research product information, make purchases, and rate their experiences.

For example:

  • They conduct product searches using engines like Google, Bing or Yahoo.
  • Consumers watch product tutorials or see demonstrations embedded in videos on sites such as YouTube and Hulu.
  • They visit retailers’ sites to read product reviews and compare prices.
  • They turn to online social networks – Facebook, Twitter, and blogs – to gather product information and rate their shopping experiences.
  • They visit a store to evaluate products and then in the comfort of their home, place the order from their PC or mobile phone.

In addition, consumers interchangeably use a variety of devices – such as PCs, smartphones, and tablets – to interact. One day they may connect to a website via their PC, the next via their smartphone or iPad. The range of devices is expected to grow as individuals increasingly turn to tablet and notebook devices, as well as stream the Internet through their TVs, cars, and home appliances.

Consumers also interchangeably use different channels to make purchases. “They might conduct research online before going into the store, or stand in the store reading online reviews through their smartphones. They might come into the store to see a product in person, but then go home and order it online. Or they might place an in-store order against an extended assortment, but have it delivered at home. They might even place an online order with you while standing inside a competitor’s store,” writes Kasey Lobaugh, principal, Deloitte Consulting.

As the pace of technology has increased, so have consumers’ expectations for a fast, seamless experience, whether they’re in a store, dialing into a call center, or interacting at a company’s website. In addition, they expect a similar brand experience as they jump from one channel to the next. For example, if one sales promotion is shown at the company’s website, consumers presume that same promotion will be available in the store.

The Benefits of an Agile Commerce Strategy

The primary goal of implementing a true cross-channel strategy is to increase revenue and customer loyalty. And when organizations do it right, they’ll see a fast return on their investments.

A cross-channel commerce platform can affect sales and profitability, as well decrease expenditures.

Increasing Sales and Profitability

Improved customer satisfaction leads to greater retention and sales. By offering multiple touch points, customers are more likely to re-engage with the brand. In terms of revenue, a recent study by Forrester Research reveals that multi-channel customers are worth five to six times more than single-channel customers

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Furthermore, satisfied customers are loyal customers. A superior experience across multiple channels – including personalization and advanced service options – will not only improve communications with customers, it will also enhance their perception of the brand and its offerings, increasing the likelihood of repeat business.

Retailers can create customized shopping experiences in their stores. For example, they can enable customers to read product reviews and information right at a POS online terminal or through their mobile devices. Retailers can also guide them through the shopping experience, offering customer reviews, recommendations and customer service.

In addition, a single commerce platform enables businesses to identify new sales opportunities. Being able to see customer behaviors across all touch points allows the organization to identify gaps or areas for improvement, emerging revenue areas, and cross-sell and up-sell opportunities.

Decreasing Expenditures

Inventory is another area that benefits by having a cross-channel strategy. When enterprises can view stock levels across all channels, they are able to improve churn, reduce waste and better control the supply chain. In addition, businesses can optimize inventory and merchandising decisions based on cross-channel demand.

Moving to a single commerce platform across all channels also reduces technology and IT support costs. By integrating call center, mobile, Internet and in-store customer touch points, a unified e-commerce platform lowers the overall cost of ownership versus single application deployments for each channel.

In addition to the benefits of improving sales and decreasing costs, there is a significant “soft” or less tangible advantage: agility. Having insights across the organization allows the business to flexibly respond to changes in the market, and improve its own time to market with new products or at emerging touch points.

Some possibilities to realize an agile commerce strategy

Implementing a single commerce platform across all channels opens the door to new interactions and experiences for your customers. Here are some possibilities:

  • Consumers can make their purchases using any type of payment, whether they’re buying online or in the store, and they can make returns or exchanges either at the store or via an online form.
  • They can see if the item is in stock at their nearest store, then use “click and collect” options—buy online and pick up at the store.
  • Order and delivery status alerts are sent automatically to the customer’s mobile phone after an order is placed.
  • In the store, shoppers use point-of-sale (POS) terminals to order items and have them sent to their homes. They can even buy products that are out of stock at the store, but available online.
  • When the consumer reviews a product online (it doesn’t have to be in his shopping cart), he gets a personalized recommendation for other complementary products.
  • When scanned, a mobile barcode on a print catalog takes the customer to a special product landing page for additional information or to buy the product.
  • A consumer can click a personalized text message on her smartphone to digitally redeem a promotional offer online or at the POS terminal.
  • A call center agent can see a customer’s entire shopping and communications history to quickly resolve problems or offer suggestions for other products
  • At the store, an individual can use her mobile phone to scan a near-field communications (NFC) tag on an item that she might want to buy and, for example, get laundry instructions for clothing or product recommendations.
  • Fans of the company’s Facebook page can receive a special offer for a newly launched product, which can be redeemed in the stores or online. Or they might automatically be offered a product from the brand they like on Facebook when visiting an online marketplace.

Concerns and Challenges of Implementing an Agile Commerce Strategy

It’s critical for businesses to not only recognize these shifting consumer behaviors, but also adapt their commerce strategies to meet new customer expectations. Not doing so runs the risk of losing customers or missing new revenue opportunities.

Many organizations have developed strategies that address mobile, social, online, and in-store customer experiences. However, they are often disjointed and separate efforts. For example, individual business units often conceptualize and create a customer touch point or channel – such as a Facebook Fan page – and as an afterthought, integrate it into the enterprise technology environment, rather than using a common commerce platform across all touch points.

Also, there are often different approaches to front- and backend business processes and technologies, including supply chain, inventory management, customer engagement, and sales. It can be difficult to integrate all these processes across the enterprise, let alone try to glean accurate customer insights from them.

Companies that forget to consider their customers’ needs, or that don’t have the ability to track, measure, and analyze customer behaviors across touch points, will lose significant business opportunities like:

  • Increasing brand loyalty and sales. With an agile commerce strategy organizations could influence customers in their buying journey on every touch point, keep the customer dialog alive and enable individuals to easily move among touch points, staying with their brand regardless of the channel. A consistent experience across multiple touch points—including personalization, advanced service options, integrated call centers, and interaction via new touch points such as smartphones, iPads or any other Internet-enabled device—would improve communications with customers and lead to additional sales.
  • Enhancing the shopping experience. Consumers today have many choices. A company that offers a superior customer experience across relevant touch points, empowers store personnel and leads with innovative Point of Sale concepts like click&collect, POS terminals or mobile shopping assistants is most likely to win the business

Despite knowing these business opportunities, many organizations have concerns about implementing an agile commerce strategy. At the top of their list are disparate systems, lack of time and resources as well as lack of optimized content.

However, there are agile commerce solutions available today that minimize operational expenditures and that can be easily implemented across the enterprise.

Another source of anxiety is around the allocation of staff resources. The implementation of any new technology requires staff restructuring. But in the case of an agile commerce strategy, there are many opportunities for greater efficiencies. By implementing a single commerce platform across the organization, IT departments can streamline processes and tasks, freeing IT employees to focus on further process and system optimization.

Business executives may also fear that a move to an agile commerce strategy will sacrifice in-store sales to online and other channels. However, the risks of store sales being cannibalized by other channel efforts are quite low and outweighed by the positive multiplication effects of an agile commerce strategy. Cross-promotion across touch points can actually increase revenue opportunities. In fact, consumers may be more inclined to make in-store purchases of products they have reviewed online first. A January 2011 study by ECC Commerce has found that 33.5% of retail store sales are first based on information searches on retailers’ websites – meaning that the Internet is complementing and encouraging traditional store sales.

Some organizations have expressed a concern that crosschannel commerce is overhyped, and are uncertain whether there will be an ongoing need for such a strategy. Brian Walker, principal analyst at Forrester Research, Inc., puts this concern to rest. He writes: “In the near future, we won't be surprised to find customers waving [near field communications]-enabled smartphones across interactive display ads and products so they can transact immediately on their mobile phones, add an item to their online cart or walk into a store or branch with the resulting offer – following a map on their phone.”3 This is just one example of how a successful connection of touch points might look.

Finally, there are businesses that would prefer to take a “wait and see” approach before adopting an agile commerce strategy. But as Walker explains, agile commerce strategies are a reality: “It’s time for organizations to leave their channeloriented ways behind, and enter the era of agile commerce – optimizing their people, processes and technology to serve today’s empowered, ever-connected customers across this rapidly evolving set of customer touch points.”

How to Prepare for Agile Commerce

It’s critical to move forward now. New customer touch points, such as shopping via TV, will be realized in the next few years.

The first step: Organizations must understand their customers and how they use different touch points. Armed with an integrated view of customers, companies can personalize promotions, pricing, merchandising, and engagement programs, which will drive up customer loyalty and satisfaction

Other actions that should be kept in mind when considering a cross-channel strategy include:

  • Be able to support unified business processes and data management.
  • Sync business and customer intelligence (CRM, Web analytics, business intelligence applications, data warehouses) to drive relevant customer interactions.
  • Ensure that front- and back-end systems talk to each other across all channels.
  • View the customer relationship across all touch points, including Web, mobile apps, email, call center, stores, tablets, social media, and interactive advertising.
  • Review and potentially restructure team models and consider new job roles.
  • Use point-of-sale data for demand planning
  • Use assortment goals and merchandise planning across all channels.
  • Give customers choices to make purchases, exchanges, and returns via the channel of their choice.
  • Deploy buy-anywhere, fulfill-anywhere methods for uniform customer fulfillment.

To tie all this together, organizations should implement a crosschannel platform to create a true agile commerce environment. “e-Business executives will need to invest in systems that can deliver highly dynamic, personalized content to customers, such as leading e-commerce platforms,” writes Walker.

An effective platform will unify efforts across all channels. The right solution is flexible, expanding to fit the organization’s needs and market changes. It should easily adapt to business processes, and integrate seamlessly into existing IT infrastructure.

Organizations that deploy a cross-channel commerce platform can take advantage of all its benefits – including increased revenue opportunities, lower operational costs, availability on all existing and emerging touch points and, the most critical, an optimized customer experience. As Walker explains, “The customer is now at the center, and delivering relevant content, commerce and service are the keys to delivering on the new reality.”

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