The Message from NRF: Retailers Still Have Work to Do on Customer Experience

2019-01-18T18:57:32+00:00January 18th, 2019|News|

At first glance, much of the substance from NRF 2019 seemed like “déjà vu” compared to the themes explored at last year’s Big Show. Customer experience was once again top of mind: a theme that pulled through in a majority of the keynotes, panels and educational sessions. Most of the keynote speakers at this year’s event agreed that the future of retail depends not so much on the goods themselves, but the overall shopping experience as a way to build stronger relationships with each customer.

Moving beyond “Awareness”

Clearly, improving the customer experience is still a leading concern for global retailers. Just because it’s been a hot topic for awhile doesn’t mean it’s been solved. With so many retail touchpoints in need of upgrades, this isn’t something that’s going to be transformed overnight. Instead, it will happen in phases. One could look at last year’s NRF and its focus on customer experience as the “Awareness” phase. Awareness is the first step toward solving a problem, and if the sessions at this year’s NRF are any indication, the retail industry has now moved into the “Evaluation” phase, examining the possible technological solutions that will help them compete – both domestically and internationally.

As expected, artificial intelligence (AI), augmented and virtual reality, and other technologies that facilitate more strategic use of customer data were all potential solutions. But before diving into the hot technology trends, retailers must take a step back and look at the fundamentals. Many e-commerce providers are still struggling with the basics particularly when it comes to cross border selling, which include frictionless checkout, order fulfillment, the right mix of payment options, shipping and easy returns.

Creating experiences instead of transactions

In its 2019 Consumer View Winter 2019 report, which was released just before the Big Show, the NRF dives into consumer trends and creative approaches that are helping retailers win the customer experience battle. Cross border e-commerce retailers should take note of the following findings:

  • Compared with 2017, 75% of shoppers surveyed say they expect free shipping for orders under $50 – an increase of 7%. This varies by age demographic: 88% of Baby Boomers expect free shipping, while only 61% of millennials and 76% of Gen Z respondents said they expect it. Further, millennials indicated that the lack of a two-day free shipping option is more likely to be a dealbreaker on an e-commerce purchase.
  • Speed and frictionless checkout are still major components of the overall customer experience. While personalization and high-touch customer service are valuable, 55% of those surveyed said “Speedy or simplified checkout” is a top expectation. Another 57% ranked “Ability to find what I want quickly and easily” as their number one need.
  • Shoppers using direct-to-consumer (DTC) subscription services are now more likely to purchase subscriptions for others as gifts than they were a year ago. More than half (56%) of consumers who currently have a product subscription service say they have also gifted one in the last year.
  • Three in 10 of consumers surveyed, and nearly half of millennials surveyed, have given a gift of experience in the past year, such as travel, dining out or entertainment. And 68% of consumers said they were “interested” in giving an experience-based gift in the future.

What does all this mean for online retailers? For one, it means the pressure is on like never before to give consumers more flexibility and control over how they discover, purchase and receive their purchases as a core part of the overall experience. It also means that retailers who provide a positive DTC experience will reap the benefits as those happy customers serve as gift-giving referral engines. And finally, brands offering tangible consumer goods for gifting will face competition for consumer dollars from more intangible offerings, such as trips and IRL experiences.

Many of these data points were fleshed out even more in this year’s NRF sessions featuring DTC brands. In one panel session attended by our Flow team, three very different DTC brands –Snowe, Burrow and Thirty Madison– talked about their approaches to differentiation and creating inventive, personal experiences for customers. While all three digital-first retailers sell different products, one theme unites them all: online retailers are asking their customers to change their habits and behaviors, when it should be the other way around. “You’re really asking a lot of the customers. You’re asking them to go to your website instead of where they usually shop,” noted the panel moderator.

This is an exponentially greater challenge for cross border online retailers. Not only are they asking customers to visit their e-commerce stores, but if brands and retailers haven’t done their research on target global markets, they may also be asking them to shop in another language, pay using a payment method they’re not familiar with, or wait too many days to receive their orders. Providing a top-notch customer experience to domestic customers is difficult – but achieving that in global markets requires far more effort, across the entire experience.

In his keynote, Jeff Gennette, CEO of Macy’s, reminded the audience that every retailer needs to be “maniacally focused on their customer journey.”  This mindset becomes even more important for retailers and brands who are expanding globally. Cross border retailers shouldn’t try to go it alone when entering new markets. Instead, brands and retailers looking to expand internationally need to find trusted technology partners who can help them make sense of the market entry requirements, automate the many manual processes, and manage the logistical and operational challenges involved in creating positive online engagement.  

This observation from NRF’s editorial team sums it up best: “The advancement of technologies and an increasingly connected world will only continue moving forward. How retailers choose to integrate and embrace new technologies will differentiate top players in the ever-dynamic retail industry.”

To find out more about how Flow can help international retailers create positive end-to-end customer experiences, contact our experts today, or download our International E-commerce Kit.

Written by
Kelly Dalton is a senior account executive at Flow. With ten years of experience in digital commerce, Kelly comes to the Flow team after serving as a senior account executive at Salesforce Commerce Cloud. Connect with Kelly on LinkedIn at https://www.linkedin.com/in/kelly-dalton-6a56339/.