Millennials are leading the way, but digital transformation now looks essential for retail survival with all customer age groups. High expectations, complex customer journeys, new analytics and experiential technology are redefining retail strategy.
Customers expect more
today. Much more.
7,000 consumers, seven countries, one clear message: customers’ needs are getting more complex. Retail brands must respond across digital and offline channels to win with every generation, from Millennials to Baby Boomers.
Millennials aren’t so different. They’re just quicker – at adopting new technology, exploring fresh consumer channels and evaluating retail experiences. Older consumers have learned from them. Now they’re more demanding – and more digital – too.
That’s one of the headline findings from a survey conducted in the UK, Germany, France, Spain, Sweden, Poland and South Africa – with respondents spread across the generations, from Millennials to Baby Boomers.
The prescription? Retailers must make the relationship with all their customers simple, fast, flexible, consistent and personal. Customers don’t buy products any more – they buy experiences. The need for digital transformation is accelerating regardless of the customer base.
Our research yielded significant insights for all sectors – but none more so than retail. It’s retail that blazed a trail for online customer experience, largely through the work of digital-first brands. It’s also retail that’s feeling the biggest impact of rising expectations among digital consumers.
And while offline retailers have caught up massively, the next major transition is well underway. Millennials are becoming mature spenders – and the behaviours they developed as digital natives have been picked up by the vast majority of older consumers, too. In our survey, a majority of every generation considered itself ‘pro digital’ or a ‘digital master’.
The baby boomers have closed the gap
How do you rate yourself as a user of technology?
-
Basic digital
-
Rookie digital
-
Rational digital
-
Pro digital
-
Digital master
-
None of these
18-34
35-54
55+1. Simplicity is key
Customer expectations are rising. They want to interact with retail brands when, where and how they choose. Millennials want multiple touchpoints in the customer journey to make anytime interactions easier; older age groups want seamless integration of human and machine.
In our survey, 73% agreed that “I would rather have a few solutions for contacting a company rather than lots which don’t work properly.” Yet digital techniques, tracking and analytics are starting to dominate the extended customer journey – and diverse customer needs outside the retail transaction point matter for all consumers.
The challenge for retailers is weaving these in without confusing or complicating the journey – and maintaining the simplicity of the transaction.
2. Trustworthy, fast responses...
define good customer experience for everyone. Customers across generations are evaluating retail experiences against the very best approaches from different sectors – especially online. Retailers’ big challenge is aligning digital systems (particularly in the research and post-purchase phases) with face-to-face interactions in store.
When we asked respondents to rate aspects of customer experience, “the company knowing it is me without having to ask” scored an average of 5.3 out of ten and “personalised experience” just 6.4. Having a “human experience” rated much higher, at 7.1 – and “politeness” 8.1. Great news for offline retailers – providing they have both great people in-store and aligned digital systems.
“Unfortunately, [many retailers] are missing personalised communication. People are being sent copy-paste style answers that are often not addressing the customer’s problem. This is very frustrating and drives me away.”
– German customer
3. Customers vanish after bad experiences
For bricks-and-mortar brands, if the post-purchase experience isn’t seamless with that in-store – and with today’s digital tools and data analytics, it should be – dissatisfaction can go unnoticed. And we know 70% of Baby Boomers and 52% of Millennials simply choose not to purchase again from a brand that lets them down.
Missing information from websites (cited by half the respondents to the survey) and no nearby store (35%) are big frustrations in the research phase. Slow responses post-purchase and failing to own the customer’s issues are also big frustrations. Retailers can use digital transformation to ensure each part of the retail experience is properly joined-up, as a comment from a UK respondent shows:
“The delivery missed a tray of my shopping and gave me substandard fruit. The helpline got in contact with the store and confirmed my missing shopping. Great. But then I had to drive to the supermarket and although they said they would refund me for the fruit, they never did.”
– UK customer
How do you react after
a bad customer experience?
- 70
- 60
- 50
- 40
- 30
- 20
- 10
- 0
- Not purchase with the company/move to another company
- Write a complaint to the company via email or letter
- Phone the company to complain
- Speak to family/ friends face to face
- Write a review on a third party website/ forum
- Complain to the company on their social media account
- Speak to family/ friends via other communication format e.g. text, phone call, email
- Post something to your social media account about a company
- I do nothing
4. Online sources help Millennials and older customers...
decide on products. But Millennials are more likely to be skeptical about the information they see. For retailers, that cements the crucial role online plays leading up to purchase – including third-party sources.
The top routes for interactions with retail brands – face-to-face, website and email – still dominate, according to our survey. But fewer Millennials report them in the top slots than Baby Boomers. And three times as many under-35s cite video chat as a preferred source of interaction – with similar gaps for virtual and augmented reality (VR and AR) and social media.
In other words, brands that currently rely on face-to-face alone might soon rue lack of adaptation to a more coherent digital strategy.
“I made up my mind on a make and model of washing machine and sourced the cheapest shop to buy from. Then I went to [my favourite shop] and told them which one I wanted, but that another shop was R1,000 cheaper. They called to confirm – and met the other shop’s price!”
– South African customer
5. The human touch is still important
Our research shows digital transformation is essential for any retail experience now. But it must be perfectly aligned with “human” interactions – either in store, or even when the “human” is an online chatbot answering queries or offering post-purchase support.
The older audience is keen to have person-to-person interactions over technology, though far from exclusively; Millennials want the best of both worlds – whatever is least hassle.
“As a customer at a hardware store, I bought custom mixed paint, ordered a shower door and copied a set of keys and much more. It was a great customer experience. Staff were not only friendly but also thoughtful, listening to my issues and developing smart solutions.”
– German consumer
Shopping around?: Key Take-Aways
Increasing expectations - The research across markets and generations told us categorically that all consumers are becoming more sophisticated and demanding along the customer journey.
Consistent and connected - But it also showed that it’s not enough for retailers to offer clear pre-purchase information, high-quality in-store experiences and attentive after-sales support. Yes, those all have to be simple and highly available. But they also have to be consistent and connected.
Human and machine - Most clearly, the research shows retailers that it’s now all generations who want this consistent, joined-up experience that spans human and machine; offline and online touch-points.
Digital transformation is the key - That’s why digital transformation sits at the heart of the new retail experience. Having a consistent view of the customer beyond the store or the online shopping cart is now critical to success. Ensuring that customers can interact how, where and when they want with the retail experience – and for it to be a uniformly positive experience – is the key to success.
The digital shopper is all of us.
