The growth of online retail in the UK shows no sign of slowing down. In turn, this is putting greater pressure on retailers’ and logistics providers’ delivery and customer communication capabilities, as consumers demand more proactive and frictionless brand interactions. Today’s online shoppers expect to receive regular order status notifications and to reschedule deliveries with ease over their preferred communication channels. Businesses associated with poor delivery and ineffective customer communications risk long-term damage to their brand, as consumers will simply take their business elsewhere.
Looking at the bigger picture, both retailers and logistics providers are investing heavily in digital transformation projects at the moment, with research from Gartner indicating that global retail sector spending on technology will reach almost $203.6 billion in 2019. The end-goal of much of this investment is to improve customer experience (CX). Businesses should be looking to provide a seamless, two-way experience using the consumer’s channel of choice; whether this be SMS, voice, email, webchat or newer channels such as WhatsApp Business or Apple Business Chat. Simply put, consumers should be able to interact with a business at their own convenience, in the same way they would with family and friends.
However, CIOs know that putting all of this into place is easier said than done, with recent research revealing that 99 per cent of retail and logistics CIOs feel under pressure to improve CX; specifically, there are three key areas currently stopping them from meeting the expectations of their business and its customers.
1. Legacy systems and siloed data
Although legacy systems sit at the heart of several core retail operations, they can often stifle CX transformation projects. Almost half (47 per cent) of retail and logistics CIOs have identified legacy systems as the biggest barrier to delivering a frictionless CX.
The issue of legacy IT is closely linked to the problem of siloed data, with different departments within the business using varying processes, programmes and platforms. By failing to connect these elements, retailers typically find attempts to improve CX become increasingly expensive and time-consuming. It’s therefore no surprise to see that nearly half (47 per cent) of retail and logistics CIOs said that having data spread across multiple systems impacts their ability to deliver a frictionless customer experience across communication channels.
2. Time-intensive development processes
Over two-thirds of retail and logistics CIOs (80 per cent) have identified that their current development approach hinders their ability to change or create new customer journeys in a fast and agile manner.
This problem can occur due to an over-reliance on bespoke integrations between communications channels and back-office systems, a highly technical and programming-intensive task, which requires the expertise of specialist developers. This approach can take time, especially if a skills gap opens up, for example if the original developer who created the system is unavailable or has left the business.
3. Inability to automate customer journeys end-to-end
Although automation is a fundamental component that enables businesses to deliver proactive and seamless customer experiences, only 18 per cent of retail and logistics CIOs are currently able to automate customer journeys end-to-end. Without automation, companies are unable to react with the speed and convenience required by today’s consumer. More than three quarters (79 per cent) of retail and logistics CIOs fear an inability to automate customer journeys end-to-end will lead their organisation to fall behind competitors. Yet, while this is widely understood, most companies are still only touching the tip of the iceberg as far as automation is concerned. The same issues preventing CIOs from creating a frictionless CX across multiple channels are also hindering automation initiatives – namely data spread across siloed systems and legacy technology.
A platform for success
Ultimately, retail and logistics CIOs need to avoid the trap of taking what Forrester refers to as a “find and fix” approach to improving communications with customers. Although this may work in the short-term, businesses must adopt a more strategic approach if they want to get to the root cause of the longer-term issues they are dealing with.
The pressure retail and logistics CIOs find themselves under is inevitably going to rise as customers become more and more demanding. It is for this reason that a platform approach to CX – namely, Communications Platform as a Service (CPaaS) – is growing in popularity among CIOs, with IDC estimating that the CPaaS market will be worth $10.9 billion by 2022.
CPaaS sits across the company’s various legacy systems, acting as the bridge between back-office systems and customer communications channels. This removes the costs associated with ripping and replacing existing systems as well as improving business agility. Using low-code development, visual composition and ‘drag-and-drop’ functionality, centralised communications platforms enable companies to construct, amend and optimise customer journeys in real-time.
Hermes, for example, has now adopted a platform orientated approach to enable greater customer journey automation. System and channel integrations are now centralised, allowing Hermes to leverage investments in existing technology, utilise system data and create end-to-end customer journeys. This has enabled the company to improve the parcel delivery experience and build customer journeys up to ten times quicker than before. By overcoming problems created by legacy systems and siloed data, speeding up the development process and enabling greater levels of automation, a platform approach to customer communications puts retailers and logistics providers in a position to not only meet, but exceed, consumers’ growing expectations.
Sudarshan Dharmapuri, Senior Vice President, IMImobile