The day started with a computer crash. Being under warranty, the obvious decision was to take it to the retailer’s customer service centre. On reaching, I am told it would take a minimum of two weeks to ascertain the issue, followed by repair that will take longer. In the age of instant gratification, such experiences will only drive a customer away from the brand/retailer.
We are right in the middle of achieving a series of technological advancements. Autonomous vehicles on roads to drones delivering goods, robots used in the grocery stores and artificial intelligence (AI)-driven chatbots enhancing customer engagement in the brick-and-mortar retail environment. The obvious question is if these advancements are happening, why is customer service in certain pockets regressing.
“AI has the opportunity to transform everything to bring customer experience to the forefront,” stated Xavier Anglada, managing director for Accenture Digital in the Middle East and Turkey. “However, to do so, retailers must do a lot of homework. And it’s an immensely data intensive business. That’s, however, not the real issue. The challenge is that currently data is used for functions like stock forecasting and improving processes, but not really to upscale, improve and transform the customer experience.”
Among several surveys that Accenture undertakes, one analysed 11 industry groups, in which customers ranked retail at the bottom in its ability to continually transform customer experience.
“That’s quite strange,” observed Anglada, “especially since today consumers are quite savvy at interacting with AI-driven virtual assistants such as Apple Siri, Google Home and Amazon Echo. The survey indicated that around 44% of consumers are comfortable interacting with these virtual assistants; 33% use their assistants at least once a day; and 86% like the experience. Having that said, it is easier to leverage such technologies by companies designed digitally. These companies are sitting on a very structured layer of data – from data warehousing, data marsh to insights, actions and delivering the ultimate experience. The traditional ones are seen to lag; they know about stock, fulfilment, suppliers but not very much about the customer. A lot of traditional retailers have not leveraged such insights to understand what customers want.”
A good example is, if a laptop needs repair, what is the service level agreement (SLA). How long is the customer expected to wait in the event of a crash? Is there a replacement laptop to offer the customer in the meantime?
“Huge capital expenditures are made to develop new retail concepts and shopping malls in this region. The rentals have been increasing, but the labour processes remain unchanged, while the cost to serve has increased,” Anglada observed. “By applying advanced analytics, retailers can not only improve customer experience but also optimise back-end processes and service delivery model. The cost to serve can, thus, decrease, making it possible for traditional retailers to compete with digital pure players. The need of the hour is smart use of data. Business transformation with the application of technologies like AI is no longer an option. Retailers who are catching up are already becoming more and more visible versus those who are not.”
Digital players realised sooner than the traditional ones that by leveraging data, they can reach the customers faster and offer a better experience. They can be more relevant, providing more targeted offers aligned to pricing. Taking away the human component, on the other hand, is often discussed as one of the concerns of using advanced technologies like AI and robotics. “Today, it’s no longer about taking human jobs away but making the interactions more meaningful, especially in the brick-and-mortar spaces. It is more about empowering people with the right tools,” Anglada pointed out.
“Today less than 20% of retailers, globally, have deployed AI or use advanced analytics and machine learning in their environment,” he continued. “Having worked with many of them, we often feel their real struggle is to determine the starting point of the digital transformation journey. Only 50% of retailers in this region and globally – mainly traditional ones – have a centralised data warehouse, where they collect all the available information. These retailers still maintain separate data sources that are critical to making integrated decisions. Only 5% have a data lake for structured data. This, in an age where a retailer can understand a lot about the consumer’s buying behaviour through their internet searches, social media interactions or geolocation applications. The likes of Amazon.ae and noon.com, on the other hand, are designed differently with a data-driven focus.”
Once the traditional retailers can embark on their data-driven journey, the information gathered through data can be efficiently presented by the human capital. It’s only then that brands will be able to have better conversations with customers.
“From our perspective, digital transformation initiatives must be customer focused,” Anglada stressed. “The back-end processes will have to be a result of what customers want. For example, when a brand unveils a new version of a laptop, a renewal or exchange programme could be offered to the customer based on their needs. And those needs must be ascertained by leveraging data, which, in turn, requires an integrated supply chain, payments and insurance partners. The ecosystem needs to be integrated, with a single view of the customer, to ensure a delightful customer experience. At the core of everything is data, and thus, the retail transformation has to be data-centric.”