In 1998, economist B. Joseph Pine II wrote that the world of retail was changing. He noted that the service economy was coming to an end, soon to be replaced with an economy based on memorable experiences and shared events. Now, over 20 years later, the "experience economy" has moved from an academic theory into a retail reality.
Today’s brands must live and operate in an experience economy. It’s not goods and services that are the differentiating factor for customers, but rather positive and memorable experiences. This fundamental shift has had major implications for the world of retail, with retailers that offer compelling experiences reaping the rewards of repeat customers and their continued loyalty.
In the digital realm, this has led to an uptake in specific digital experience (DX) platforms and behavioral analytics technologies. Instead of focusing purely on personalization or customer conversion, these tools are being used to build an understanding of customers’ behaviors. By analyzing mouse paths, heat maps and session recordings, retailers are now able to paint a picture of their customers on an individual level, creating differentiation and building better experiences.
To understand this trend, Clicktale conducted international research examining the future of DX and how today’s brands are cementing their place in the digital experience economy. Through this study, we were able to identify a number of key insights for retailers looking to survive and thrive in the age of DX.
Retailers Don’t Understand Customer Behavior
Our research found that for 67 percent of brands, the desire to understand customer behavior is a key driving force behind their DX strategies. Despite this fact, just over half of marketers feel they don’t have a strong understanding of customers across digital channels.
To address this lack of understanding, retailers are turning to innovative new DX tools and approaches to build insight and create a more memorable digital experience. For example, online fashion retailer JustFab quizzes its visitors before they enter its site, providing a tailored experience based on their responses. In deciding whether visitors will appreciate this quiz, JustFab also uses behavioral analytics to help inform when — and when not — to let shoppers straight through and onto the site. By understanding customer behavior, innovative brands like JustFab can ensure that every customer gets the experience they desire.
Retailers Aren’t Short on Data, But They Don’t Know What to Do With It
While 53 percent of those surveyed claim that you can never have too much data, less than a third feel that they can effectively convert the in-page data they collect into actionable insights. To overcome this, retailers don’t need more data — they need a new way to draw meaningful conclusions from their data. Often, this means looking beyond mass data collection tools and relying on some degree of human analysis to make sense of what's being collected. Many brands are already employing this tactic, with 44 percent using a dedicated in-house data science team to help convert their data into insights.
Cross-Channel Retail Still Isn’t Working
Retailers are better than ever at ensuring they’re reaching their customers across multiple platforms and channels, but there are still inconsistencies when it comes to DX. Nearly three-quarters of those surveyed say they’re unable to create truly seamless, integrated experiences across different digital touchpoints, while 34 percent aren’t effective at uniting data between their web and mobile platforms.
While these are all points for concern, consistency across channels isn’t the be-all-and-end-all of a "good" retail experience. As consumers increasingly shop across multiple different locations and devices, their behaviors and expectations also change. Those browsing a retailer’s website on their laptop at home will be in a different state of mind vs. those browsing on their smartphone during a busy commute. Given this fact, simply being consistent across different touchpoints isn’t enough. Instead, retailers must use their knowledge of customer behavior across these touchpoints to build a completely customized experience, one that plays to the particular context that customers are shopping in.
In addressing these three points, brands will need data, but they’ll also need a real understanding of customers’ behavior. This will be the key to DX success.
Sara Richter is chief marketing officer at Clicktale, a leading experience analytics platform.