Survive And Advance: The Three Critical Components Of Transformational CX

  • February 4, 2020 at 9:04 AM EST
  • By Mike Callender, REPL Group
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The digital transformation has raised the stakes for today’s companies, as a perpetual state of technology shifts requires them to adapt and advance — or die. Retailers prove no exception, as they face two transformation-driven challenges in attempting to survive within this environment:

  • With digital age-enabled access to an abundance of information about products and services, consumers have grown empowered, with higher expectations of what brands should do for them. Nearly three-quarters of customers, in fact, say that one extraordinary experience raises their expectations of other companies, according to the most recent State of the Connected Customer report from Salesforce.
  • The second challenge is about a direct response to the raised expectations, as an influx of smaller, more nimble companies address the demand through disruptive products and services, to take away market share from slower-to-adapt, less tech-savvy brands.

By introducing something new — and something of value — the disruptors increase the expectations of consumers even further. Thus, the two challenges feed off of each other, triggering a ceaseless cycle of accelerated, competitive pressure within the industry. Economically, retailers are already feeling some heat: While it’s true that sales continue to rise, return on assets – described by Deloitte in its 2019 Retail Outlook report as “a common view of (the) profitability and efficiency of retailers” – fell to 4.77% in the second quarter of 2019, down from 5.87% a year ago, according to research from CSIMarket. Return on investment declined to 11.74% within the same time period, down from 15.46% a year ago.

“(Retail) continues to undergo constant disruption,” the Deloitte report states. “And amid the disruption, one thing remains consistent: Consumers are becoming more powerful, with expectations of ‘having it all.’

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Clearly, the establishment of a winning customer experience (CX) has emerged as an essential step in a successful transformation, as 75% of consumers expect companies to use technologies to build better experiences, according to the Salesforce research. But this is easier said than done, as 57% of marketers say that their company has the right CX strategy in place but is unable to effectively execute it, according to research from Harris Poll.

With this in mind, here are three mission-critical components of a CX strategy that will enable our retail businesses to survive — and thrive — in today’s highly competitive digital transformation age, along with best practices recommendations in implementing them:

Artificial intelligence (AI) and automation. AI brings the promise to revolutionize the CX, with the potential to “know” what customers want — even before they know what they want themselves. Given the anticipated impact of the technology, interest will soar for at least the immediate future: Global spending by retailers on AI will reach $12 billion by 2023, up from an estimated $3.6 billion this year, according to a forecast from Juniper Research. What’s more, AI is serving as an automation driver, as 40% of retail/consumer products businesses have adopted AI automation tools, and the adoption percentage will double within three years, according to research from IBM. Through the increased investment, businesses will seek to unlock efficiencies throughout back-office operations, while deploying advanced analytics to predict sales demand and automate marketing functions, according to Juniper’s forecast.

However, to maximize the advantages of AI/automation, we must consider the human side of its implications, as opposed to focusing solely upon technology. The solutions liberate employees by automating stock ordering/receiving and other mundane back-office tasks. Managers no longer need to “disappear” from the floor to bury themselves in repetitive paperwork. They and their staffers can use the extra time now to offer enhanced value to customers and help complete sales. They can accomplish this because AI has “armed” them with a deeper awareness of what the individual shopper wants, and they are better positioned to deliver our second component, which is …

Personalization. Nearly two-thirds of consumers said they feel personalization should be provided as a service standard, and 53% expect a brand to know what their buying habits, preferences and needs are, according to the Harris Poll research. Yet there is a disconnect here between the online world and brick-and-mortar stores. In the online world, personalization has emerged as the norm. When we browse something on a web site, we accept that we’ll see an ad on our Facebook feed which promotes it or a similar item. We realize Amazon will make recommendations to us based upon our purchase history — and that’s OK!

But we do not feel as comfortable with similar tactics in physical stores. If a sales rep rushes to a customer and says, “Oh, I see you bought a suit here on Sept. 2, 2017 and now I have these other suits which are very similar and I’m sure you’ll want to buy them,” then the customer may, understandably, get a bit creeped out over privacy concerns and a general sense of pushiness.

Therefore, it’s essential to train retail employees to deploy AI wisely as a personalization tool. Instead of using buying behavior/brand loyalty data to launch a forced, “fake” sales push, they should view AI-supplied information as a means to cultivate a more pleasant, helpful CX. Because they aren’t spending as much time on tedious, manual tasks (thanks to AI), they can devote those hours to developing greater expertise about the products and services they sell. Then, if a customer walks into the store and starts looking at the televisions on display, the employee combines an awareness of the customer’s prior purchase history and preferences along with this value-added expertise to educate the customer (in a sincerely helpful manner, as opposed to a forced one) about new products that will best satisfy the customer’s needs.

This ensures an engaging interaction because employees are no longer pushing — they’re listening, and creating a more positive, productive CX with what they’ve learned.

A consistent omnichannel experience. The CX transcends everything else, including the places and platforms which make it possible. Whether it happens at a store, on a web site or a mobile device — or all three in no particular order — is secondary. In listing their top unified commerce priorities, retailers rank the implementation of a “consistent brand experience across channels” at the top, as cited by 59% of surveyed companies, according to research from BRP Consulting.

But in attempting to present a consistent brand experience across channels, we shouldn’t obsess over whether the web site is offering the very same products and prices that the physical stores do. Consumers accept that there will be distinctions here, so these distinctions do not cause any troubling feelings of inconsistency across channels.

But the value of the brand must remain consistent regardless of the channel. People associate a certain standard of quality with their Nike shoes, for example. If they order a pair online that falls short of the perceived quality standard, they will think less of the brand as a whole. If we compromise this value by thinking, “Oh, it’s not an in-store experience so customers won’t care as much,” then we are compromising the brand itself. Suffice to say, that is an unacceptable, self-defeating strategy.

While we think of CX as a modern concept, it’s actually as old as the store itself, and the time-tested adage, “Give the customers what they want,” should still drive our intent here. Fortunately, due to AI, we can readily achieve the vision of Apple co-founder Steve Jobs, who famously once said of consumers, “Our job is to figure out what they’re going to want before they do.” This in turn will enable us to deliver more personalized experiences with omnichannel consistency that does not arrive at the expense of our brand values.

Yet, as indicated, to reach this state, we cannot invest exclusively in technologies while forgoing the development of informed, engaged and empowered employees.


Mike Callender, Chairman of REPL, founded the company in 2007 with Chris Love and has guided the company from startup to worldwide success. An enthusiastic, hands-on entrepreneur, he believes that everything can be made to work better. Callender has worked in retail since he was 15 and has extensive experience within the industry. Specializing in business analysis and strategy, team leadership and change management, he’s passionate about innovation and keeping ahead of the game. As chairman and product visionary at REPL, he spends time with customers understanding what they need and immerses himself in all the latest retail trends. An inspirational event speaker, Callender is dedicated to future growth through both acquisitions and the further development of international markets.

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