ANA (Association of National Advertisers) – July 26, 2017
Success hinges on deploying the most effective digital tools
Customer experience (CX) technology is catching on fast with marketers and brand managers. Solutions range from tap-to-pay, geolocation marketing, and near-field communications to still-nascent technologies like image recognition, virtual showrooms, and voice-command speakers driven by artificial intelligence.
It would seem reasonable, then, that the growth of CX solutions is also being embraced by a burgeoning new generation of digitally savvy shoppers. Not exactly.
According to a report by the IBM Institute for Business Value, based on two surveys of 600 executives and 6, 618 consumers, a major disconnect exists between the kinds of customer experience technologies marketers deploy and the ones that customers actually like and use. Dubbed “Digital Disappointment: Why Some Customers Aren’t Fans,” the report notes that consumers are not necessarily interested in trying many gee-whiz CX programs, such as using virtual reality to explore products or interactive digital store displays. In fact, they overwhelmingly prefer digital shopping solutions that are easy, speedy, and can help them save money.
“It’s a disconnect of priorities,” says Robert Schwartz, global leader of agency services at IBM iX, the business design arm of IBM. “For brands it’s tricky, and it’s easy to get non-relevant quickly.”
IBM recommends the obvious: brands should design digital experiences to meet customer expectations, not their own. But, as is often the case, while some technologies show promise of being truly useful, others are just digital bling.
Artificial intelligence (AI), which includes personalization chatbots and virtual assistants like Amazon’s Echo, Apple’s HomePod, and Google Home, will take an ever-greater hold on consumers because of its value as an “enabler” in easing the customer experience, says Tim Rumpler, EVP at Rockfish Digital. Conversely, he believes mobile CX options, such as coupons and beacons delivered to mobile phones, are “evolutionary” developments that remain merely promising because marketers haven’t figured out how to minimize the creep factor.
“The pure digital experience is important, but you need to influence people in the real world,” says Matthew Bright, senior director of product and technical marketing at Thinfilm, which develops integrated solutions based on near-field communications short-range wireless technology. “One of the challenges brands have to come to grips with is being active, present, and useful in the places consumers are spending their time.”
The key to a successful CX program, Bright stresses, is using technology to serve consumers fast, fresh, and fun information in “micro-moments,” or within three seconds.
“The initial moment of interest in a category may come almost simultaneously with its discovery,” Bright says. “If the solution helps the consumer answer a question at the moment he’s ready to make a purchase, that’s important.”
For Grubhub, the online and mobile food-ordering company that connects consumers with local restaurants, that micro-moment can come when a customer feels hungry. To that end, the company is expanding its ordering options with a skill on Amazon’s Alexa artificial intelligence solution, which runs on the Amazon Echo smart speaker and certain mobile phones. Customers can enable the Grubhub skill with a simple voice prompt and have Alexa reorder dishes from their order history.
“We want to make it really easy for the consumer to order on our platform,” says Barbara Martin Coppola, CMO at Grubhub, which has a network of more than 55,000 restaurants. “The beauty of it is that many of our orders are reorders from people’s favorite restaurants. For techies and millennials, it’s pretty cool to use.”
Coppola also thinks virtual reality can further enhance the customer dining experience, perhaps in telling stories about food origins and preparation, for example, or by offering virtual tours of restaurants’ kitchens.
Enable Frictionless Commerce
An important CX challenge that dovetails with the IBM study is how companies overcome barriers to customer intent, says Nick Jones, EVP of global business development and innovation at Arc/Leo Burnett. Technologies that provide “frictionless commerce” will rise to the top, he notes.
“It’s about eliminating things that slow shoppers down, or that put something between them and what they want to buy,” Jones says.
Personalization is critical, he adds, which again points to deploying artificial intelligence. “We typically think of using data to develop one-to-one marketing, but it can also mean how we tailor the shopper experiences for different people and their styles and needs,” he says. “This is the essence of what I call ‘Me Commerce.'”
Image recognition may aid Me Commerce concepts. A recent example is the teaming of Kentucky Fried Chicken with the Chinese search engine Baidu to develop a “smart restaurant” in Beijing.
Here’s how it works: A kiosk identifies previous customers by their image alone, and suggests KFC favorites; new customers are scanned for expressions, gender, and age, and the AI solution suggests “appropriate” menu items.
Near-field communications, radio frequency identification, and a soupçon of AI may also provide greater frictionless interactions, a topic given wide attention with Amazon’s June acquisition of Whole Foods. The deal may provide a big boost to the Amazon Go grocery store pilot program, which detects the products shoppers take out of the store and automatically bills their Amazon account.
One CX Does Not Fit All
While many CX programs seem compelling, they don’t always appeal to everyone. One of the biggest mistakes brands make is to underestimate how generational differences determine adoption of new digital experiences, according to the IBM study.
For example, just 38 percent of executives think age makes a difference, but consumers have a vastly different view: Only about 8 percent of baby boomers locate products with a company’s mobile app while shopping, compared to 24 percent of millennials.
One company that strives to appeal to various shopping habits is clothing and accessories retailer Rebecca Minkoff, which allows customers to experience the full possibilities of its fashions through virtual reality. Shoppers can upload a full-body photo, and courtesy of an app supplied by startup Zeekit, can choose a Minkoff product from its entire catalog to see how it looks and fits in a technology-enabled mirror.
The Minkoff experiment underscores that whatever the technology at hand, customers may appreciate being given the option of using it — or not. Similarly, Grubhub customers who don’t fancy the AI method via Alexa can simply place an order by phone or online.
“Regardless of what tool is used, experiences that allow a customer to feel the benefits of speed and convenience are the places for brands to start,” IBM’s Schwartz says. “For companies developing a digital CX effort, the thing to remember is that the customer experience is the brand, and the brand is the customers’ experience.”
CX Tools in Search of Wider Use
Marketers can opt for a bevy of digital tools to improve the customer experience. These tools frequently overlap and offer many additional features for messaging and targeting.
- Beacons. Bluetooth signals send ad messages or coupons to consumers’ mobile phones when they’re near products of interest.
- Chatbot. An artificial intelligence (AI) system that can answer questions or help customers purchase a product.
- Click and collect. Enables shoppers to buy a product online and pick it up quickly in person.
- Image recognition. Identifies previous customers to optimize service and product offerings; minimizes registration time; responds to online photos with personalized offers.
- Location services. Near-field communications (NFC) product tags enable promotional information, demos, and support via mobile devices in real-time. Geolocation provides nearby couponing offers.
- Mobile apps in physical location. Pay onsite using a mobile phone for checkout; compare prices; redeem coupons or loyalty points.
- Radio-frequency identification (RFID). Identifies shoppers onsite for more personalized and quicker service; RFID tags on products improve stocking and thus product availability.
- Virtual showrooms. Shows how a product will look or be experienced via virtual reality.