The New Frontier of Customer Experience

Why fantastic in-store experiences matter more than ever – and how you can deliver them.

In such a fast-changing competitive

landscape, it has never been harder

for brick-and-mortar retailers to

compete. Competition has never been

fiercer and customers have never had

so much choice, or information at

their fingertips. The ease and comfort

of shopping online, as well as the low

prices this can offer, means customers

are more demanding and more willing

to walk away to a competitor than

ever before.

When customers come into your

stores, they’re looking for great

service and fantastic experiences.

Recent studies show when customers

have a bad in-store experience, such

as a lengthy wait time in a poorly

organised queue, 26 percent will

abandon their purchase and leave

the store1; and the damage continues

after they leave the store.

Brick-and-mortar retailers need to

unlock the potential of their biggest

assets – beautiful stores, engaging in-

store experiences, and enthusiastic staff

who have the expertise to make each

and every customer feel important.

The New Frontier of Customer Experience:

Why fantastic in-store experiences matter more than ever – and how you can deliver them.By Imogen Wethered

1http://www.pierhouse.co.uk/wp-content/uploads/2015/07/PierhouseSurvey_WhyShoppersLeave.pdf 2

The Fall-Out of Negative In-Store Experiences

One of the biggest challenges retailers face is that

customers are now more than ever, more demanding

and impatient. With more options available to them,

they are more likely to walk out the door if they have an

unsatisfactory experience.

2 Qudini independent market research3 Estimated cost to individual retailers have been calculated using research data combined with an estimated 1,100/month footfall, combined with average spend figures: http://www.statista.com/statistics/412509/shopping-spend-by-location-great-britain-uk/. The cost to retailers in aggregate has been calculated by and multiplying the individual retailer costs by the number of retail outlets in the UK: http://www.retaileconomics.co.uk/library-retail-stats-and-facts.asp.4http://www.pierhouse.co.uk/wp-content/uploads/2015/07/PierhouseSurvey_WhyShoppersLeave.pdf5 https://www.zendesk.com/resources/customer-service-and-lifetime-customer-value/ 6 https://www.zendesk.com/resources/customer-service-and-lifetime-customer-value/7 https://www.omnicoreagency.com/twitter-statistics/8https://zephoria.com/top-15-valuable-facebook-statistics/

To date, queues and wait times have presented an

insurmountable challenge to retailers when looking to

convert customers in their retail stores. As it stands, even

if you provide highly sought after products at a low cost

with best-in-class customer service; customers will choose

to go elsewhere. This can cause a detrimental impact to the

bottom line of the traditional in-store retailer.

This impacts retail revenue-generating potential in four critical ways:

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1

2

3

4

Walkouts...Customers will walk out without service

Our research shows that poor in-store experience and long wait times

lead to 10% of UK customers walking out of stores2. That means

the average store loses £52,000 every year3 directly from walkouts

and poor in-store experience, with the total cost of walkouts to UK

retailers at £15 billion a year and hitting the entire economy hard –

26% of customers who walk out of a store will discontinue their purchase completely4, costing the UK economy £3.4 billion a year.

Lost Loyalty...They often won’t return

After walking out on a retailer, most customers won’t return – 55% of customers have switched to another company5 after a poor

experience. Causing UK retailers to miss out on £8.1 billion of sales

that just one more visit would have brought in.

Word of mouth...Most will tell their friends

According to Zendesk, 54% of customers share bad experiences with more than five people6.

If 60% of those who listen to them visited the retailer in question one

more time, this would amount to another £14.7 billion of revenue.

Social media...Many will share their experience on social media

With 317 million monthly active users on Twitter7 and 1.86 billion

monthly active users on Facebook8, social media can compound

the issue of poor customer experience, with a significant impact on

revenue, reputation and more.

10%

of UK customers

walk out of stores

55%

of customers have switched

to another company

4x

Poor in-store experiences cost retailers £168 billion a yearIn summary, poor in-store experiences can have a negative impact on customer retention and can lead to

negative social media reviews, customer walkouts and propensity to purchase products from competitor stores.

To negate this, retailers need to invest in their stores and look at enhancing the customer journey.

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9 http://www.v12data.com/blog/90-percent-social-media-users-reach-out-retailers-why-social-media-your-secret-weapon/

The true costs of long wait times and poor experiences soon start to stack up – so what can retailers do about it?

Social Media and “the Twitter Effect”

The popularity of social media channels has grown exponentially over the

last decade. With this in mind, customers use them as a crucial touchpoint

to engage with retailers on a real-time basis for customer service, with

Twitter being the main platform for this.

Qudini conducted independent research in September 2016, providing an

analysis of the main customer complaint topics on or related to the search

term “Bad store experience” across a sample of 150 tweets on Twitter.

The results showed that 36% used social media to share a poor customer service experience,9 whilst also identifying the top two

complaints shared on Twitter:

22.9% 14.3%

This is what we call the ‘Twitter effect;’ the social media platform

amplifies the impact of long queues in stores, creating massive

headaches for retailers. If each negative post is seen by 200

people, 30% of whom would otherwise have visited the store

in question the lost revenue opportunity for an average store would amount to £451,000 a year – £130.7 billion for UK retailers as a whole.

Rude or inefficient staff

at the number one spot

with 22.9%

Wait times, accounting for

14.3% of complaints, coming

a close second

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The Transition to Technology; Why Retailers are Investing in Customer Experience Technology in Stores

10 www.pwc.com/gx/en/retail-consumer/publications/assets/total-retail-global-report.pdf 11 http://www.retaileconomics.co.uk/library-retail-stats-and-facts.asp 12 https://www.accenture.com/gb-en/insight-digital-disconnect-customer-engagement 13 https://www.pwc.com/gx/en/retail-consumer/publications/assets/total-retail-global-report.pdf

Although 86% of customers now use multiple channels to make a purchase10, 88% of retail transactions are still completed in-store11.

It’s now more important than ever to

create a memorable experience from

the moment customers walk in to

stores. Customers are looking for more

than just products to buy. Only the

best retailers can give them unique,

engaging, tailored experiences across

multiple channels.

“Customers are voting with their feet as they shop more online, and for multi-channel retailers that means the need for an increasingly focused, curated and engaging brick-and-mortar store experience that creates maximum conversion – no matter what channel ultimately records the purchase.” – PwC Total Retail Global report, 201613

Better in-store experiences can beat lower online prices

With store operating costs high,

retailers can’t compete with online

prices – however price isn’t the only

factor in buying decisions. In fact, 47%

of consumers surveyed indicated they

are willing to pay a premium for a

better customer experience12.

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The shift from transaction-based to service-based retail

has led physical retailers to evolve their store experiences

to encourage more customers to complete their purchase

journey in-store.

Retailers are using innovative technology to deliver

outstanding in-store experiences; driving online sales,

improving conversions and increasing spend by transforming

their brick-and-mortar stores into hubs for exciting brand

experiences and service interactions. We’re seeing retailers

rethink their stores in a variety of ways, for example:

• Offering additional services and events in-store

(including ones that customers can pre-book),

therefore creating more opportunities to build lasting

relationships with customers

• Creating more immersive, memorable experiences in store

that enable customers to see products in action

• Using a concierge or host to engage customers and help

orchestrate their in-store experience from the moment

they walk in

Transform In-Store Experiences...

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Improve immediate in-store sales

On average, customers reporting the best in-store experiences spend 140% more than customers reporting a

poor experience14

Drive online sales and conversion and higher spend

Customers who engage through multiple channels generate

three times the volume of sales and more than twice the margin of store-only customers15

Build long-term loyalty to support business growth

A 5% increase in customer retention produces more than

a 25% increase in profit16

Differentiate from competitors

Consumer Intelligence Consultancy, Walker, have estimated

that by 2020 customer experience will become the number

one differentiator between brands, succeeding both price

and product17

Increase word-of-mouth marketing and brand advocacy

77% of of customers are more likely to buy products

recommended to them by family or friends.18 Through

excellent customer experience, word of mouth and social

media can be utilized to benefit your business

Transform Business Results

Retailers are reimagining their in-store customer experience to help them:

14 http://www.mycustomer.com/community/blogs/connieharrington/the-link-between-customer-experience-and-revenue15 https://www.accenture.com/t00010101T000000__w__/gb-en/_acnmedia/PDF-10/Accenture-Strategy-GCPR-Digital-Profitabilty.pdf#zoom=50 16 http://www.bain.com/Images/BB_Prescription_cutting_costs.pdf 17 http://www.gartner.com/smarterwithgartner/test/18 http://www.nielsen.com/uk/en/insights/news/2015/how-shoppers-look-watch-and-listen-for-new-products.html

What retailers do Why retailers do it

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The fact is, great customer experiences drive revenue

growth. Research has shown that retailers who

deliver the best in-store experiences will outperform

their competitors by a huge margin.

Forrester analysed companies’ revenue growth over

a five-year period. The results speak for themselves.

Forrester’s customer experience ‘leaders’ achieved 17% growth. The poorest customer

experience performers, on the other hand, grew by

just three percent.

Better Experience, Better Revenue

17%

growth by Forrester’scustomer experience leaders

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In this retail revolution, we work closely with retailers to transform their in-store

experiences to boost sales, streamline operations and create lasting, valuable

customer relationships.

Our enterprise Customer Experience Management solutions enable you to easily

manage and connect with your customers across multiple journeys and channels,

all within a single platform, using:

We are Qudini

Walk-in & Queue Management

Multi-Channel Appointment Bookings

Click & Collect Management

Request Assistance

Collection & RepairManagement

Workshop & Event Bookings

10

62% 10%

reduction

in walkouts

within O2 UK

store conversion increase, as a

result of online appointment

bookings for one our new

enterprise customers

Increased customer browsing

and spend whilst customers

wait for service for John Lewis

40%

satisfaction

improvements

for House of Fraser

Buy and Collect

By thinking about customer journeys as a series of service experiences, rather than a

series of financial transactions, and using technology to improve those experiences,

forward-thinking retailers are starting to achieve some phenomenal results.

View our case studies online: qudini.com/customers

Rethinking Customer Engagement

Let’s design your customer experienceIf you’d like to discuss how enhanced in-store experiences could open up new possibilities for your business, get in touch at imogen@qudini.com?

“It’s been fantastic working with Qudini. We found them incredibly agile. They’ve been very receptive to our needs, and we’re really really comfortable that what we’ve got now is absolutely perfect for our stores.”– Bridget Lea, General Manager, O2

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