Enhancing customer experience in the digital age

Digital adoption accelerated at an unexpectedly rapid pace amid the COVID-19 pandemic. How can retailers leverage these changes to position themselves for success?

The COVID-19 crisis led to a dramatic increase in e-commerce activity, with consumers moving to digital channels in unprecedented numbers. For many organizations, those unanticipated shifts highlighted an urgent need to elevate the customer experience and streamline it across channels. Organizations that leverage data, promote their values, and create a compelling omnichannel customer journey will be well positioned to succeed in a changing future.

In a recent Financial Times webinar, consumer industries correspondent Judith Evans spoke with Prama Bhatt, chief digital officer of Ulta Beauty; Kevin Neher, co-leader of McKinsey’s Global Customer Experience Practice; and Naveen Seshadri, global chief digital officer for Foot Locker, about how companies are navigating disruption and planning for the future. Here are a few key takeaways from the session.

Omnichannel is here to stay

As consumers return to physical stores, it’s more important than ever for retailers to create a seamless experience across the physical and digital worlds. Each channel plays a distinct and critical role in the customer journey. Consumers have clear ideas about where and how they want to shop and where they want to get services—and organizations that work across silos to provide that seamless experience will thrive.

The shock to brand loyalty continues

During the pandemic, consumers demonstrated a heightened interest in exploring beyond their favorite products, with up to 75 percent of consumers trying new categories and 40 percent switching to new brands. A key factor in the erosion of brand loyalty is the growing importance of sustainability and purpose, as consumers increasingly turn to companies that share their values. And it’s not just a consumer trend—employees are equally concerned about social responsibility. To win the loyalty of these values-conscious constituents, organizations will need to embed these values into everything they do, from operations to employee recruitment.

Predictive analytics fuels customer engagement

Organizations have access to more data to guide decision making than ever before. However, more data creates new challenges: Which data is most relevant? And how can that data be used most effectively to build customer engagement? The answers to these questions will shape the future of customer experience. Customer surveys, which have long served a foundational role in data collection, are losing effectiveness as response rates decline. Companies need to leverage more productive sources of information, such as operational and financial data. They can also prioritize a variety of testing models to help them predict what will resonate with customers and make better decisions for the future.

Personalization promotes customer loyalty

Today, 71 percent of consumers expect companies to deliver personalized interactions—and 76 percent will switch if they don’t like their experience. This means retailers are increasingly thinking about ways to personalize the entire customer journey. To create a seamless experience that speaks to each customer as an individual, organizations need to combine different sets of data to take a holistic view. Through enhanced search capabilities and machine-learning tools, companies can incorporate data insights into personalization efforts at every step of the customer journey.