Forget about your digital strategy – start with your customer strategy

Duncan Murcot, Associate Director, Advisory
Duncan Murcott, Associate Director, Advisory

Digital is important, but it’s not the only thing… remember to move at the pace of your customers.

The digital age is something we’ve all embraced to some extent. Most of us are connected to our friends on social media, use apps and websites to do our banking, pay bills and shop… but truly successful organisations know that delivering excellent customer experience is not only about being digital. Excellent customer experience is about connecting and engaging with your customers across all relevant touchpoints and channels (yes – even the ‘old school’ ones), to stimulate long term profitable relationships and repeat business.

This is hot topic with CEOs. KPMG’s 2016 Global CEO Outlook study revealed a staggering 88 percent of CEOs are concerned about customer loyalty.

But is it not as simple as it sounds and there are many pitfalls making it easy to get the mix wrong. . Gap clothing, who developed the idea of ‘casual, affordable cool’ in the 60s, recently moved their business to a digitally-biased, omni-channel environment. GAP has done some clever things to improve the customer experience through digitisation, but they may have pushed the digital envelope too far.

The Gap CEO commented “If you haven’t won at the digital interface on the front end, your window in the mall store is probably not going to make a difference”. His belief was that clothes buyers are following a ‘digital first’ mantra, but evidence suggests customers have been slower to move digital than the pioneer retailer believed. As per GAP Inc.’s Investor Relations commentary, since mid-2013 GAP has invested into engaging with the digital consumer through mobile, web and social channels — even using the dating application Tinder as a communications platform – at the expense of more traditional marketing mediums such as TV advertising and visual merchandising in their windows. However, during this period (since Q1 2014) their sales have consistently declined, suggesting perhaps, they have moved before their customers have.

Does this mean a digital strategy is the wrong thing to do? Of course not… many organisations are benefitting from helping their customers with digital interactions. Successful companies use their digital strategy as a component of their customer strategy, but always start with understanding how their digital strategy fits with their customer experience, and they need to ensure their customer experience supports the way their customers want to buy (Gap’s mistake).

Gap’s performance stands in contrast with John Lewis – a leading UK retailer (Ranked number 3 in the KPMG UK Customer Experience Excellence Analysis 2015) which has delivered consistent growth through the ‘digital era’. John Lewis lives to “make the world a little bit happier, a little bit more decent”.

So what’s their secret? John Lewis has an empathetic and knowledgeable staff at the heart of its strategy, while balancing both a growing physical and online presence. John Lewis has been at the forefront of customer service evolutions, being the first to introduce ‘click and collect’, combined with investment into an omni-channel presence. However, it hasn’t lost sight of the need to evolve in other areas, having recently opened a new flexible format shop and its first airport shop. The key for John Lewis is building customer experience designed around the needs of their customers and the way they want to shop today.

There are other organisations which are building a very strong digital engagement with their customers, by focusing on how to leverage digital to improve the experience given to customers. For example, even Australian State Governments have realised the benefits to its citizen/customer base by providing a choice of simple online and physical interaction points. They have put the customer at the centre of service design, by becoming simpler, more responsive and more connected to their citizen/customer community.

There is no doubt that digital is and will become an increasingly important part of how customers want to interact. However, let’s remember it is only a part of the customer experience, and the best companies are looking to meet customer expectations by listening to and delivering what their customers want.

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