05/08/2016 - 05:47

Creating smart customer experiences

05/08/2016 - 05:47

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In a world dominated by connected, or ‘smart’, technologies, it is not enough to create customer experiences; retailers need to create smart customer experiences.

In addition to its bricks and mortar stores, Myer has also introduced a virtual reality retail store.

In a world dominated by connected, or ‘smart’, technologies, it is not enough to create customer experiences; retailers need to create smart customer experiences.

The rapid pace of digitisation is reshaping the attitudes, behaviours and value systems of retail shoppers. A number of smart retail technologies, such as interactive displays, smart shopping carts, radio frequency identification, near-field communication, and augmented-reality interactive technology have been introduced in the retail sector worldwide.

The adoption of these technologies by retailers has potential benefits related to improved customer experience, cost reduction, improved firm performance and increased profitability.

This resonates with the assertion by Myer’s chief digital and data officer, Mark Cripsey, that the key to improving customer experience is enabling it through the use of technology. He underscores that digital technology enables more seamless and engaging customer experiences.

Today’s customers are more empowered and demand greater transparency in their interactions with retailers. They are no longer concerned only with ‘moments of truth’ but instead, the ‘moments that matter’ to them. Hence, retailers should be in a position to manage the entire consumer decision-making journey.

Retailers like Myer, Target, McDonald’s, and Domino’s Pizza, among others, are the frontrunners in adopting smart technologies. These firms are making an effort to come closer to customers and to improve customer experience by providing superior and personalised services. However, unless retailers identify the components and drivers of smart customer experiences, the full potential of these retail technologies will be far from being realised.

Our research among retail shoppers in Western Australia indicates that there are six important components of smart customer experiences that retailers need to track and manage over the entire customer decision-making journey.

These are, in order of importance:

• a customer’s ‘felt involvement’;

 • stimulation;

• perceived enjoyment;

 • perceived autonomy;

 • personalisation; and

• interactivity.

We found that these components of smart customer experience are instrumental in creating more stickiness to (or time spent engaging with) retail stores and smart retail technologies. Smart customer experience also affects shoppers quality of life in terms of saving on time and effort related to shopping.

Most retailers are grappling with how to engage retail shoppers with these smart retail technologies. Myer is utilising digital and connected technologies to extract information about their customers’ purchasing behaviour and predict their future purchase patterns.

In conjunction with eBay, Myer has also introduced a virtual reality retail store, which aims to revolutionise shoppers’ retail experiences.

Similarly, McDonald’s started ‘Create Your Taste’, whereby customers can customise burgers and salads using the technology interface.

Domino’s Pizza initiated ‘Pizza Mogul,’ whereby customers can customise their pizzas and even name them. These are typical examples of innovative firms engaging customers in co-creating their experiences. Thus, smart technologies play an important role in facilitating the co-creation of such experiences.

Our research among the retail shoppers in WA indicates that retailers here need to focus on some basic aspects of smart retail technologies to engage with shoppers. We call these the drivers of customers’ co-creation activities. These are aesthetics appeal (i.e. the design aspect) of smart technologies, ease-of-use of smart technologies, superior functionality and the ability of these technologies to immerse the customers in the purchase interaction.

The likelihood of customers participating in co-creating smart experiences and continuing to use smart technologies is high, if retailers focus on these drivers.

 

Dr Sanjit Roy is an assistant professor at UWA Business School, while Dr M S Balaji is an assistant professor of marketing at the University of Nottingham, Ningbo, China.

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