From the first availability of e-commerce through its ubiquity, Customer Experience (CX) has been the determinant factor of online retail success. Amazon understood this as far back as 1997 when it invented the “Buy Now” button for frictionless, one-click online purchases. More recently, Best Buy implemented a customer-first experience by following its successful Total Tech Support program with a new home health initiative, providing accessible mobile products and connected devices to aging consumers. By increasing access to emergency care through technology, Morgan Stanley estimates Best Buy could generate up to $46 billion in revenue over the next 10 to 20 years.
Traditional brick-and-mortar retail businesses have evolved into a hybrid of on- and offline Sales funnel with success dependent on a superior and personalized customer experience. As stated in CleverTap’s recent e-commerce app industry benchmarks study, 10% of all retail revenues are generated through e-commerce, and the industry is expected to grow at a CAGR of 11.1% from 2018 to 2025. Yet, a troubling 96% of all e-commerce app users churn within 90 days, primarily due to missed opportunities for addressing customer experience. In essence, online retail is spending time, resources, and money to generate customers, only to have them churn.
Customer Lifetime Value (CLTV) is heavily dependent on a unified CX that encompasses all user interactions across multiple channels, going above and beyond to provide a seamless experience. As customer expectations have evolved, the hurdles to maximize CX have grown with them.
Today, companies looking to provide customers with a unified experience are forced to use a variety of loosely integrated point solutions—from audience analytics and automated behavioral segmentation to multi-channel conversations and advanced measurement/tracking. Yet even with these efforts the effect is limited, leaving a shortfall that must be addressed as organizations look to deepen customer engagement and loyalty.
To address these issues, four key factors have emerged as the primary forces driving the future of how organizations create and maintain a connected customer experience:
1. Data Science
The advent of Artificial Intelligence and Machine Learning has had a profound effect on Data Analytics. Marketers no longer depend on spreadsheets; AI and ML facilitate e-commerce by segmenting customers using a wide array of variables.
By identifying and addressing behavioral patterns, it’s possible to significantly increase conversion rates. For example, bookmarks and wish lists can be analyzed for signs of imminent purchase, enabling retailers to respond with bundled discounts, sales, personalized promotions, and other enticements to complete a purchase.
Viewed differently, analytics also allow companies to identify shoppers who will buy even without offering any incentives, enabling Marketing resources to be deployed where they’re needed most.
2. Predictive/Prescriptive Modeling
Another application of advanced Data Analytics is the ability to accurately predict, group, and address users based on their likely future actions. This capability is especially important for e-commerce apps.
42% of all app users uninstall a downloaded app within the first 30 days. Knowing which users are at risk can greatly improve retention tactics. Similarly, knowing which customers are likely to purchase in the next 15 days allows merchants to intervene proactively with messages and offers, increasing conversion rates and improving CLTV.
3. Blurring of Physical and Digital
Effectively combining digital and physical realms involves much more than scheduling an online purchase for in-store pickup. Headless e-commerce technology, for example, makes buying experiences possible from smartphones, voice-enabled assistants like Alexa, kiosks, VR/AR, and even refrigerator doors. And this has huge implications for CX.
Now, profiles and preferences must be collected, analyzed, and addressed from a greater number of sources than ever before. This sea change applies to analytics in particular, but also to broader Marketing management. Funding decisions, for example, must be made with the entire spectrum of CX touchpoints in mind, since every aspect contributes to CLTV.
4. Lifecycle Marketing
In today’s real-time existence, it’s critical to understand, create, and influence favorable customer journeys at every stage. It starts with seeing e-commerce from your customer’s point of view. One size no longer fits all—and poor or insufficient segmentation produces ineffective, perhaps even counterproductive, messaging.
In addition, customer journeys aren’t linear; shoppers move back and forth from purchase to inquiry, loyalty to fickleness. In the past marketers focused purely on acquisition, but non-linear Marketing now puts the emphasis on retention.
Accurately addressing each stage requires a complete command of data and a unified analytics dashboard. Cobbling together data from silos simply doesn’t work since you can’t pivot as a customer’s mindset, life stage, and shopping habits evolve.
Also useful for understanding is a journey map that represents brand experiences from the customer’s perspective. Built from analytics tools, the customer service team, customer research, and other sources, the journey map is used to identify opportunities to empathize with customers and improve the CX.
As technology and consumers continue to change, e-commerce companies must stay vigilant. No one can afford to fall behind the curve. By keeping pace with these and other CX influences, however, it’s possible for merchants to keep customers—and their business fortunes—solidly on their side.