New Social Trends and Digital Technologies Have Raised the Stakes for Customer Experience

New technologies powered by “always on” Wi-Fi connections, social networking platforms and the Internet of Things have given consumers the power to dictate the terms of their relationships with retailers. Their behaviors, preferences and, most importantly, shopping habits are changing rapidly as they access a seemingly ever-expanding array of channels to connect with their peers, your competitors, your suppliers and — if you're lucky — you.

No matter where they are or what time of day, consumers can choose what to buy, when to buy it, who to buy it from and at what price. This throws all of yesterday’s thinking about customer engagement, retention and brand loyalty strategies up in the air. With so much information at their fingertips, consumers have become especially fickle, finding, comparing and evaluating purchases in a matter of minutes.

This convergence of the brick-and-mortar store and digital world doesn’t mean you simply need an upgraded web presence, a smartphone app and a chief Twitter officer. This means the old operating model you have for customer relationships is no longer valid. Today’s customers need new ways of engaging, and the retailers out in front are building customer centricity designed around a ubiquitous engagement and a unified organization and infrastructure.

A Ubiquitous Engagement Model
A ubiquitous engagement model follows customers’ journeys at each touchpoint as they shop across channels to meet their heightened expectations for a personalized, seamless experience. Creating a ubiquitous engagement model starts with defining a future-state vision for digital business and identifying each touchpoint along the customer engagement journey. The end goal is to create a digital experience that:

• offers customer-driven in-store and online formats that make shopping fun and efficient;
• provides a seamless transition between channels and enhances cross-channel commerce capabilities, such as buy online, pick up in-store, buy in-store with mobile coupon, or buy online, return in-store; and
• enables the development and maintenance of strong customer relationships by showing that you know your customer and you want them to return.

To align with heightened customer expectations and deliver a seamless shopping experience, retailers must adopt an outside-in approach focused on what the customer wants and implement customer-facing processes at each touchpoint. Since many processes today are mapped from an inside-out perspective, an investment in change management will help retail employees understand the value of the new processes and adopt this new outside-in perspective for a truly customer-centric operating model.

A Unified Organization and Infrastructure
A unified organization and infrastructure explicitly identifies executive champions to oversee the coordination of all channels, and is aligned across channels to ensure omnichannel initiatives receive the right priority. Customer-centric retailers have developed an operating model to govern the digital ecosystem, prioritize and approve digital initiatives backed by a business case, and provide program management for the design, build and integration of digital applications.

And while front-end digital user interfaces garner most of the attention due to their “cool” factor, much of the effort for omnichannel solutions has to do with back-end systems, data, integration, application, and device and network security. A unified customer-centric technology platform provides an infrastructure in which common tools, capabilities and data are transparent, shared and not duplicated. It provides the digital fabric for back-end services that allow a retailer to:

• create a digital consumer engagement with standardized connections to the back end and efficient and flexible push notifications;
• improve security with user authentication, data protection and malware detection; and
• streamline operations with management and enforcement of application versions, issue tracking with UX and enterprise master data management.

As digital transformation continues to take hold, a growing number of retailers are beginning to rethink the role of in-house IT. Traditionally, retailers viewed outsourcing as a less expensive way to handle IT responsibilities. However, more recently, retailers that lack the skill sets to bring all the different technologies to the platform level are viewing outsourcing as a way to procure infrastructure-as-a-service or software-as-a-service to manage IT functions and build a digital fabric.

Lowe’s is one retailer that has seen the boon of adopting both the ubiquitous engagement model and the unified organization and infrastructure. In-store employees carry mobile devices that support them as they use a guided selling approach to engage with shoppers. Because access to information via an associate’s mobile device is critical to the creation of a seamless and personal customer journey, Lowe’s has had to create a collaborative environment between its stores and IT. This way it can monitor device performance and measure the correlation to business outcomes, such as abandonments, conversions and revenue. Its unified organization strategy is the backbone of its digital transformation.

Tomorrow’s retail winners will be those that can redefine their customer strategy, understand how to re-engage with their target customers and translate that strategy into a coherent, integrated, seamless omnichannel operation. These retailers will have a clear understanding of their customers’ wants and intentions, and will architect an operating model that leverages all the possible connection points to share ideas relevant to their customers’ conversations in an effort to build brand relevance and long-term loyalty.

Not every consumer is changing today, but all consumers will change tomorrow. And, in retail, tomorrow will come faster than you expect.

Michael Witty is a director at Information Services Group (ISG), a leading global technology research and advisory firm.