How Will Companies Deliver a Great Customer Experience after Covid?
Blurred Lines: 3 New Trends in Customer Experience
The Best of Thought Leadership (BoTL) Newsletter is for content creators who want to stay ahead of the curve. In each issue we discuss a trending topic, and we present the top 3 must-read thought leadership pieces that move the conversation forward. Think of it as a competitive landscape analysis with a POV.
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In this issue: POST-COVID TRENDS IN CUSTOMER EXPERIENCE
Shopping matters. On average, household spending accounts for 63% of GDP, so understanding human influences and how we, as consumers, are changing has become increasingly vital.
Covid-19 has drastically impacted how customers shop and what they want from the shopping experience. Online shopping has, by necessity, replaced much person-to-person contact. At this stage, most businesses agree that it’s about being digital first, and that Covid has accelerated many of the trends in customer experience that were already underway, such as mass customization, importance of purpose and contactless commerce—and that they are here to stay. A sense of community and a safe environment are also more important than ever.
What will post-Covid customers be like?
How will companies deliver on their expectations?
BoTL found that future prospects for customer experience are blurry, as the new expectations and the technologies enabling them create a new shopping world in which the bright lines dividing shoppers, sellers and employees disappear. Sometimes it works for all involved, sometimes it doesn’t.
Here are the top 3 not-so-obvious trends and developments we gleaned from current thought leadership about customer experience:
TREND 1
BLURRED LINES: OLD VS. YOUNG
Older consumers are becoming more like younger ones.
TOP TL piece:
KPMG, 2021
Covid-19 has brought about new customer behaviors and attitudes, and thus new ways to segment customers. Some of the new, Covid-related segments include The Wayfinders (concerned youth who fear missing out on what they want their life to be today and in the future),The Frazzled (stressed families struggling to juggle work, childcare and financial obligations) and The Enlightened (secure older adults who use their experience to help others navigate these challenging times).
Using advanced statistical techniques and machine learning, data scientists analyze multiple data streams to better understand their customers, including their new Covid-related needs. They can drill down to the level of an individual customer, allowing them to create a segment of one, and thus offer highly personalized customer experience. This leads to so-called mass individualization, the blurring of the lines between one and all.
And yet, Covid may have made the biggest impact when it comes to the most basic customer segmentation—by age. That’s one of the conclusions of the third edition of KPMG’s “Me, my life, my wallet” report.
Millennials (17-36) no longer stand out. The distinctiveness of millennial values such as wanting to improve the world and being digital natives has been eroded through the rapid adoption of technology across all age groups and a growing and more widespread concern for environmental, economic and social issues.
Covid-19 has accelerated the sharing of economic, environmental, social and technological values across demographics. They now have more in common than ever before, says KPMG. Generations now see more eye-to-eye on the following:
Adoption of digital technology. Covid-19 has rapidly accelerated the adoption of digital technology among older customers. Eighty-one percent of The Silent Generation(age 75 and above) now use a smartphone, compared with 61% pre-Covid-19. Boomers are reducing their use of cash but are also becoming more aware of the risks of online activity, worrying about cybercrime and sharing their data. Millennials continue to be the generation that is the most focused on technology for its own sake
Concern about economic and social disparity. Perhaps the most significant change in older generational values has been the rapid rise in concern about economic and social disparity. In fact, it now concerns some three-quarters of the over-75s, compared with 40% pre-Covid-19. Boomers share worries with the younger generations about the economy, political stability and climate change, have a higher concern about their future finances and are saving more as a protective measure.
Ethical concerns. Ninety-two percent of the silent generation (age 75 and above) are willing to pay more for an ethical retailer or a brand that gives back to society, compared with 91% of millennials and 84% of boomers. Gen Z (7 to 16) concerns about climate change and social disparity are now equally shared by the older generations.
TREND 2
BLURRED LINES: EMPLOYEE VS. CUSTOMER
Happy customers don’t always make for happy employees.
Top TL piece
The Experience Equation: How Happy Employees And Customers Accelerate Growth
Forbes Insights and Salesforce, 2020
Kudos to Forbes Insights and Salesforce for exposing cracks in the idea of the so-called total experience, which aims to blur customer (CX) and employee experience (EX) into a virtuous cycle of reinforcement, in which better EX leads to better CX and vice versa.
Half of that equation is definitely true, finds Forbes. Better EX indeed leads to better CX, but the equation does not work so well in the opposite direction:
70% of executives surveyed by Forbes agree that improved EX leads directly to improved CX.
But only 33% say that improved CX leads to improved EX.
In fact, just the opposite may be true—fast revenue growth (tied to improved CX) may be a negative for EX. A majority of executives (52%) disagree that fast revenue growth leads to improved EX. While it’s attractive to think that revenue growth will make employees happier, there’s a limit to how hard a company can press the accelerator before nerves fray and workers get tired, says Forbes.
How to prevent the vicious cycle of high EX leads to improved CX which leads to revenue growth which leads to lower EX?
Incentivize employees and fully invest them in the success of the company, and make fulfilling customers’ expectations easier. At Shaw Industries, a flooring manufacturer, employees had to work especially hard whenever customers asked for something out of the ordinary, because processes were complicated and designed for standardized consumer requirements. The company focused on making it easier for workers to satisfy extraordinary customer requests.
Make sure that the EX and CX executives are on the same page and work together. Currently, they are not and do not. EX executives believe that senior management needs to instill a vision for change, and CX executives want organizations redesigned to focus on high EX/CX.
Make EX and CX equal priorities. That’s not yet the case. Almost two-thirds (65%) say CX will stand among their top five priorities. Only 47% say the same for EX.
Making the EX/CX equation work is all the more important for the post-Covid world, as the pandemic may have interwoven them even more tightly. To stay successful, companies should equally emphasize the care and compassion they show to both employees and customers.
TREND 3
BLURRED LINES: SELLER VS. CREATOR
Social commerce creates a community, but can you trust everyone?
Top TL
Poshmark’s Tracy Sun on stitching e-commerce with social media
The Decoder podcast with Nilay Patel, 2021
Poshmark feels like a community, with online friends opening up their closets while chatting with friends. But it’s really a store. A fashion reseller company, Poshmark is part of social commerce, an emerging trend in the U.S. that combines both social media and e-commerce. Other similar online platform marketplaces combined with social content creation are Facebook, Etsy, Tik Tok’s Depop, Instagram, eBay and Pinterest, to name just a few. They fill a customer need:
“…people just like to connect, right, like you go to the local farmers market and you like to know who grows your lettuce, or you like to speak to the shopkeeper at a store to find out how to style things. And with the rise of e-commerce, what’s happened is a lot of that human connection gets stripped out.…But what Poshmark does is it brings back a lot of that really intimate human connection that happens around shopping and combines it with e-commerce,” says Tracy Sun, a Poshmark cofounder and SVP of new markets.
To create a commerce site with a human touch, Poshmark combines the creator of social content, such as posh stories, and the seller. This in turn blurs the lines of the customer experience, by merging what feels like socializing and shopping into one activity.
Consumers should stay wide awake when shopping on commercial sites, and be mindful that such sites are focused on creating a good selling experience for the sellers at least as much as a good experience for buyers.
After all, the sellers are their primary customers and most vital asset. In the case of Poshmark that means that the site does not publicly share negative reviews about sellers but only positive reviews, which it refers to as “love notes.” The site handles all issues that may arise with the sellers internally. So, while it’s a safe community, customers should bear in mind that the reviews aren’t a hundred percent freewheeling.