The Impact of Customer Experience on a Buyer's Online Journey
The release of the Apple Card this summer was big news, the way anything released by Apple is big news.
There definitely were some intriguing details — no fees, tight integration with a mobile wallet, the beefed-up privacy and security features, and a metal card. But behind the big news was an intriguing story about the importance of delivering a top-notch customer experience.
Apple, a company known for obsessive attention to customer centricity and providing an addictive experience at its 500-plus retail stores, turned to Goldman Sachs to power underwriting and originations for the Apple Card. Goldman, revered within banking circles for its investment banking prowess, has been trying to break into retail banking ever since the Great Recession.
To heighten its consumer appeal, in 2016, Goldman launched Marcus, a sub-brand that leverages technology and exemplary customer experience to offer simple, digitally native banking products. In just three years, Marcus has added 4 million customers in the U.S. and U.K., and has been consistently doubling its deposits, most recently surpassing $50 billion.
For Goldman, Marcus was a way for an established, dare I say stodgy, financial institution to embrace the customer focus of upstart enterprises that understand that consumers are in charge in 2019, and that any business that wants to succeed needs to serve them the way they want to be served, when they want to be served, and in the channels they want to be served in.
Nowhere is this transformation more evident than in retail, where legacy behemoths are scrambling to optimize their e-commerce operations. In an industry dominated by Amazon.com, retailers are battling sky-high expectations from consumers who have become used to one-click purchases followed by one-day shipping for everything. This raises the question: How do retailers compete with Amazon? Enter customer experience.
A common theme across retailers that have successfully built a strong base of repeat customers is the ability to evaluate and refine the buyer’s experience at every touchpoint — not just at the point of purchase. Retailers that focus solely on conversion can end up missing the signs of inefficiencies within the technology stack.
Let me illustrate what I mean using retail tech vendors, including some of Signifyd’s strategic partners and some others.
Consider how a buyer’s online browsing experience is disrupted when competitors’ display ads pop up. That could result in customers being redirected to third-party websites, dropping off his or her original journey. Such interruptions are called “customer journey hijacking.” Firms like Boston-based Namogoo prevent customer journey hijacking by suppressing unauthorized ad injections, preserving the customer experience and brand perception.
Once a shopper has arrived at a purchase decision, it's critical to avoid drop off. Depending on the value of the merchandise, merchants may choose to offer financing through Bread or Affirm to reduce friction and maximize cart conversion.
Once the customer actually clicks the buy button, a multitude of opportunities to elevate the customer experience opens up.
Start with the many toll gates constructed by merchants using legacy payment processor rules. These gates rely on archaic rules, such as Address Verification System (AVS) and Card Verification Code (CVC) checks, distance between billing and delivery addresses and static blacklists, to name a few. While merchants deploy such filters with the best intent (i.e., to weed out fraudulent customers), they inevitably lead to legitimate customers being declined.
A 2018 Global Ecommerce Study conducted by Pitney Bowes called out some sobering facts: 36 percent of consumers shop somewhere else after just one poor experience, and 25 percent of consumers never purchase from that retailer again. Additionally, 60 percent of millennials share their negative post-purchase experience with others. It's critical that merchants pay extra attention to these “moments of truth” within the customer journey.
Once orders have cleared payment processor checks and the customer’s card has been authorized, there are a few additional hoops that the order has to go through before being cleared for shipping.
Merchants will often rely on a manual fraud review team to sift through suspicious orders and validate order details. While this serves as a good tertiary check to minimize the merchant’s exposure to fraud, it's at the expense of customer experience. Validation may require email verification, a phone call or other authentication methods that introduce friction and unnecessary delays.
With Amazon’s announcement earlier this year that it would begin free, one-day shipping to over 100 million Prime members, it’s time for merchants to revisit manual processes that delay order fulfillment and consider automating them.
At the end of the customer journey, merchants have relied on a number of solutions that promise “seamless returns/refunds,” including return labels in the original shipment, the ability to buy online and return in-store, and faster refunds, to name a few. Automation has played a role in returns, too, with companies like Return Magic and Optoro that use artificial intelligence to make merchants’ return operations more efficient and less costly, which allows for more liberal return policies.
The key to ensuring a sublime customer experience across a buyer’s entire online journey requires a two-pronged approach: picking the right solutions within the technology stack and fiercely protecting the customer experience. Merchants that leverage this approach will maximize their returns in the long run by building a base of loyal, repeat customers who spend consistently and who ultimately serve as vocal brand advocates.
Vid Sukumar is director of partnerships at Signifyd, the world’s largest provider of guaranteed fraud protection.
Vid Sukumar is Director of Partnerships at Signifyd, the world’s largest provider of guaranteed fraud protection. Prior to Signifyd, Vid led enterprise customer experience programs within Medallia's Financial Services vertical and business transformation programs at some of the world’s largest financial institutions in Ernst & Young's (EY) Risk Advisory practice.