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Resurrecting Retail—Part Two: Becoming a Customer-Centric Organization

Resurrecting Retail—Part Two | 1


While change is never easy, it is always necessary.

Change is constant, so being adaptable and instilling trust requires a dynamic enterprise centered around a common goal. Author, professional speaker, and entrepreneur Mark Sanborn said, “Your success in life isn’t based on your ability to change. It is based on your ability to change faster than your competition, customers, and business.”

The modern consumer demands that organizations evolve to meet their needs or become irrelevant. Consideration for how to do so efficiently, effectively and most importantly, perpetually, to ensure continued growth and relevance should be a priority as consumer behavior evolves, and the speed of business and technology accelerates.

In the first edition of this two-part point of view, we discussed the reasons, challenges, and implications of becoming a truly customer-centric retail organization to ultimately ‘reinvent’ a brand’s customer experiences. Implementing the strategic and cultural shift necessary to becoming consumer-centric and ultimately offering valuable, seamless experiences no matter the channel is key to relevance and growth. In this second part, we outline key steps to achieving this goal, focusing on an organization’s purpose, understanding customers, paying acute attention to the experience, rethinking the organization, and aligning metrics.

Define (or Update) Your Purpose

Becoming customer-centric is a strategic endeavor requiring planning and action for change. It is the foundation for improving the customer experience. Start by identifying and defining your reason for existing or your purpose.

Moving towards customer-centricity does not have to be an ‘all or nothing’ proposition. Incremental changes to improve customer experiences can yield positive results and build momentum for initiating additional improvements. Marketing, merchandising, and sales departments are good places to look at first since these three groups are primarily

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responsible for consumer-facing activities. Simply aligning these departments strategically with a collective vision can result in better prioritization, communication, and results.

Understand Your Current Customers

Creating meaningful experiences that drive purchasing behavior starts with a keen understanding of your current customers and those you want to attract and retain. Strive to enhance—and invest in—this capability and you will see returns.

Appreciate that analytics, cloud, machine learning, artificial intelligence (AI), and concepts such as the internet of things (IoT) will continue to advance and enhance data gathering and analysis further for continued actionable insights, including anticipating needs. Investing in the proper technology—along with ensuring the processes and roles are in place to use it effectively—is key to understanding human interactions and purchasing behavior to inform and complement the customer experience.

Business and consumer data stored in multiple areas or locked away where only a few have access needs to be liberated and shared across the organization for review and analysis to garner insights necessary to act. Typical retailer limitations, highlighted in our point of view, “Future-Proofing Retail,” include the lack of a cohesive view of the customer across departments, unknown attribution and economic indicators, and inability to process and reconcile transactions (data) between siloed channels. This is especially frustrating for customers who recognize the brand and expect seamless operations regardless of the channel.

Working with what you already have can garner insights as well. Very often, traditionally siloed organizations have siloed data as well. Investigate data you have or can gain access to across different functional areas; assess and share relevant data and review collectively to inform actionable insights—then continually monitor and analyze information that is determined to be the most valuable to building customer relationships and understanding customer journeys. Sifting through what you already have can be educational and empowering towards striving to adapt to customer expectations.

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As with any relationship, communication matters. Therefore, the frequency and consistency of seeking and receiving feedback from your customers, at every stage in the customer journey, should become foundational across all departments in your evolution to becoming customer-centric. The aim is to use information, insights and data collectively to better understand your customers interests, behaviors, and engagement to provide them with products and services that are relevant, easy, and enjoyable to obtain.

Actively engaging and conversing with customers through efforts such as social listening and engagement, user group inquiries, surveys, voting, customer care inquiries, purchase follow-up, and similar touch-points not only provides valuable insights, but also has the potential to build community, loyalty, and advocacy for your brand. Further, the outcomes of these activities become even more powerful with data and analytics that can garner deep insights for action across all your channels and platforms.



Prioritize, Design, and Enable the Experience

No retailer has perfected completely integrated experiences across all channels. And perfection shouldn’t be the aim because overextending your organization trying to be relevant on every possible channel and platform is often a losing proposition. Significant results can be achieved

when prioritizing experiences in customers’ preferred channels. Change and prioritization are required to reimagine your organization around building relationships with your customers rather than transacting with them.

Challenges for traditional bricks-and-mortar retailers include investing in digital capabilities and e-commerce channels in line with physical stores and not at the expense of them. To remain relevant and competitive, traditional brands must holistically consider investing in new systems, migrating away from stagnant legacy systems, managing vast amounts of data from a variety of disparate sources, leveraging advanced analytics, as well as reorganizing and retraining employees on new, integrated ways of working. Taking advantage of technologies that integrate digital and physical data to empower store-level employees—and fundamentally change how these associates interact with your customers and your own brand—will enhance in-store experiences and results.

For digital natives, it is easier to operate consistently with digital-born infrastructures, integrated systems, relevant performance metrics, and a tech-savvy culture supporting

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all digital channels. Interestingly, many of these brands are realizing that physical locations are an economically viable and strategic advantage for brand building and customer acquisition which is why once digital-only companies like Amazon, Warby Parker, Casper, and Everlane are investing in physical stores. The value resides in elevated brand awareness, human interaction for high-touch services and immersive experiences complemented with advanced consumer insight through data analytics, regardless of channel. Their challenge is the opposite since they lack the experience needed to plan, design, launch, and support physical locations. Amazon’s foray into stores via the acquisition of Whole Foods and the development of Go convenience stores is a strong indicator of the future of both bricks and clicks. However, the majority of retail sales still occur in physical stores, which means the key to competing is to leverage what can be offered to engage and excite customers like uniqueness, high-touch services, curation, enjoyment and/or entertainment consistently across physical and digital channels.

Rethink the Retail Organization

Store operations and customer service should no longer be the only departments responsible for customer experiences. Remaining competitive and relevant requires retailers to rethink everything they do, why they do it, how value is derived and measured, and how resources

are used to create meaningful and relevant experiences for customers. Siloed departmental and organizational structures designed to support traditional retail models, coupled with dated processes and legacy systems, will impede an organization’s ability to operate within a customer-centric way. Customer experience is now the responsibility of everyone and every department in any customer-facing organization.

There should be a nearly equal balance between merchandising, marketing, store operations, and customer service to collectively define strategies to deliver seamless, relevant, convenient, and channel-less experiences for customers.

Finance, IT, and human resources departments must move beyond supporting roles to become powerful strategic partners for allocating resources, streamlining forecasting and reporting, as well as assessing investments to ensure they support new business requirements. Further, speed and convenience requirements necessitate an agile and responsive supply chain that can deliver on ever-evolving expectations.

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The new retail enterprise must be dynamic and agile. Equal parts strategic, creative, and analytical skills are necessary for understanding customer wants and needs and delivering on those expectations.

Other key organizational changes must include:

• Every department must have customer experience as its primary objective and work collaboratively to provide the necessary support and innovative ways to attract, engage, and retain customers.

• The C-suite must work more collaboratively, leveraging the outcomes of advanced analytics, reporting, and attribution across the enterprise.

• Skilled analytic roles, using advancements in AI and machine learning, must be in place, pulling data from a variety of sources to glean and share customer insights.

• Partnerships must be developed both inside and outside organizations to optimize capabilities and collaborate on comprehensive solutions that quickly anticipate and deliver on customer expectations.

Customer experience is now the responsibility of everyone and every department in any customer-facing organization



• Change management roles and disciplines must be permanently in place to meet the pace of business evolution and increasing demands of customers.

• New roles should be created to include developing disciplines around experiential design across bricks and clicks, storytelling, growth hacking/rapid experimentation, active observation/listening for insights, trends and feedback, and trust/transparency/security building.

Some forward-thinking companies are solidifying the importance of customer experience through the addition of a new role to the C-suite: Chief Customer Officer (CCO) or Chief Experience Officer (CXO), overseeing and ensuring that customers are the priority across the organization. This is a significant indication of the importance of ensuring a customer-centric culture—but it is just the start. Existing customer experience, events, content creation, data analytics, product design, and agile project management roles will continue to evolve and gain importance as organizations align to offer engaging, channel-less experiences.

Additionally, all existing and new roles will need to function cross-departmentally in a highly collaborative culture to better understand consumer behavior and satisfaction, informing all areas of the organization in the pursuit of improving customer journeys and experiences.

Align Metrics New organizational structures and processes require new metrics and measurements for understanding, informing, and tracking results. Establishing baselines while identifying what and how to measure will be a priority for the CCO/CXO in tandem with the executive team. Existing

methods used to measure customer satisfaction include NPS (Net Promoter Score), CSAT (Customer Satisfaction Score) and CES (Customer Effort Score). Each of these has their advantages and disadvantages but become more meaningful when leveraged with other efforts including CLV (Customer Lifetime Value), share of wallet, frequency, attribution, acquisition, retention, churn, and recovery provide insights to the status of your organizations efforts and become guides for responding accordingly and improving relationships with your customers based upon their actions and values.

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Final Word

It is paramount to understand that customer experience is the new competitive differentiator. For retailers worrying they need to suddenly become customer clairvoyant, fear not. It’s an exciting time to consider taking advantage of various opportunities to evolve towards meeting current customer expectations by initiating strategies, organizational structures, systems, processes, and tools that foster insights around customer behavior and understanding to support your growth. New technologies and new ways of thinking hold much promise for making consumer touchpoints more human, personalized, relevant, and timely. Depending upon your company’s culture, capabilities, resources, and current ways of working—knowing were to focus may seem like a daunting proposition but if you carefully consider the elements we discussed, you can plan for successful evolution—or even reinvention.


for more details contact:

Sonia Hernandez Partner | [email protected] Sarah Booth Senior Manager | [email protected] 770.882.2205

The Parker Avery Group The Parker Avery Group is a boutique strategy and management consulting firm that is a trusted advisor to leading retail brands. We combine practical industry experience with proven consulting methodology to deliver measurable results. We specialize in merchandising, supply chain and the omnichannel business model, integrating customer insights and the digital retail experience with strategy and operational improvements. Parker Avery helps clients develop enhanced business strategies, design improved processes and execute global business models. Learn more about us at:

www.ParkerAvery.com

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